After Securing ~57.5% in Property Settlement, Then a Large Costs Claim — the Adverse Costs Order Set Aside on Appeal
After securing a favourable ~57.5% property split, the client faced a fixed-sum costs order of about $57,000 from the other side. Our appeal went straight to the procedural-fairness defect; the order was set aside and the costs liability structurally restructured and narrowed — protecting the favourable result to the very end.
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Following the breakdown of a marriage, the most challenging aspect is often not the divorce itself, but how to fairly resolve the financial and practical consequences of a shared life. This case represents a complex and extended family law dispute spanning multiple stages—from separation and parenting arrangements to property settlement, and ultimately, a contested costs proceeding.
Acting for the wife, our firm adopted a stage-specific strategy throughout the lifecycle of the matter. At the outset, our focus was on stabilising parenting arrangements and preserving day-to-day certainty. In the middle stage, we concentrated on achieving a substantively fair property division. In the final stage, we defended against a substantial costs claim brought by the husband and successfully challenged an adverse costs order on appeal.
The outcome was not only a favourable property division, but also a significant reduction in the client’s exposure to litigation costs, following the successful setting aside of a fixed-sum costs order.
Case Background
A Marriage Leading to Multi-Layered Dispute.
The parties commenced their relationship in 2005, began cohabiting in 2008, and married in 2010. They have one child. At the beginning of the relationship, both parties were employed and had comparable earning capacity. Over time, however, their roles evolved into a more traditional structure: the husband primarily focused on income generation and business activities, while the wife assumed the primary role of homemaker and parent.
During the marriage, the parties accumulated assets through a combination of property transactions, business operations, and the establishment of a self-managed superannuation fund. While certain key assets—most notably the company C Pty Ltd—were legally controlled by the husband, the reality of the marriage was that these resources functioned as part of the family’s shared financial ecosystem. This characterisation was ultimately accepted by the Court in the property proceedings.
The parties separated finally in 2020. Upon separation, the informal assumptions that had governed the use of income, business resources, and family assets ceased to operate. Matters that had previously been managed jointly—company income, sale proceeds of the matrimonial home, superannuation, and ongoing expenses—became subject to formal legal determination.
Key Challenges
The first complexity in this case did not lie in identifying assets, but in how they should be evaluated. While the asset pool itself was relatively straightforward, the husband’s company—although ultimately assigned a nil value—continued to provide him with income and fringe benefits. This required the Court to move beyond a purely static balance sheet approach and consider ongoing financial resources in a more substantive way.
The second challenge arose from the nature of the parties’ contributions. The husband relied on his initial financial position and ongoing business income, whereas the wife’s case was grounded in her role as primary carer and homemaker, as well as her re-entry into the workforce while continuing to care for the child. The task was not simply to compare contributions, but to integrate initial contributions, joint endeavour, and future needs within a coherent legal framework.
The third—and most significant—challenge emerged after the property judgment. Despite achieving a favourable percentage outcome, the wife was then faced with a substantial costs application by the husband. He argued that she had unreasonably rejected multiple settlement offers and had pursued unsuccessful procedural applications. The trial judge partially accepted this argument and made a fixed-sum costs order against the wife in the amount of approximately $57,000.
This introduced a new layer of risk: that the economic benefit achieved in the property proceedings could be materially eroded by a subsequent costs liability.
What We Did
A Multi-Stage Approach Aligned with Evolving Objectives.
Early Stage: Stabilising Parenting and Containing Procedural Risk
At the outset, we recognised that a global resolution of all issues was unlikely. The parties’ relationship had deteriorated to a point where direct negotiation was limited, and parenting and property issues were tightly interwoven.
Our priority was therefore to separate and stabilise the parenting arrangements at an early stage. By guiding the matter toward consent orders in relation to the child, we were able to establish a clear and predictable framework for parenting, allowing the subsequent property proceedings to proceed without ongoing disruption from unresolved parenting disputes.
This approach reduced procedural complexity and created a more focused environment for the financial issues to be determined.Mid-Stage: Reframing the Company as a Financial Resource
A central issue in the property proceedings was the treatment of C Pty Ltd. While the company was ultimately assigned a nil value on the evidence, it continued to generate income and provide fringe benefits to the husband.
Rather than attempting to artificially elevate its valuation, our approach was to reposition the issue. We argued that even if the company had no current distributable value, it remained a significant ongoing financial resource available exclusively to the husband post-separation.
The Court accepted this characterisation. This was critical in shaping the s 75(2) adjustment, as it ensured that the husband’s future earning capacity and access to benefits were properly taken into account.Contributions and Future Needs: Limiting the Weight of Initial Assets
The husband placed considerable emphasis on his initial contribution, particularly the equity in a property brought into the relationship. Our strategy was not to deny the existence of this contribution, but to contextualise it.
We demonstrated that the initial asset had been absorbed into the parties’ joint financial trajectory and had ultimately become part of the broader matrimonial asset pool through subsequent transactions and shared use. The Court accepted that, while relevant, this contribution did not justify a disproportionate outcome. It was ultimately reflected as a modest 5% adjustment in the husband’s favour on contributions.
In contrast, we consistently emphasised the wife’s ongoing responsibility for the child, her lower income, and the husband’s superior earning capacity and continued access to company-derived benefits. The Court applied a 12.5% adjustment in the wife’s favour under s 75(2), resulting in an overall division of 57.5% to the wife and 42.5% to the husband.Costs Appeal Strategy: Shifting the Focus to Procedural Fairness
Following the costs order at first instance, our analysis identified that the key issue was not merely the quantum of the award, but the manner in which it had been determined.
The trial judge had adopted a fixed gross sum approach. While such an approach is not inherently impermissible, it had not been clearly foreshadowed during the costs hearing. The parties had conducted the hearing on the basis that costs, if awarded, would be assessed or agreed on a recognised basis (such as party/party or indemnity), rather than determined by way of an immediate lump sum.
Crucially, neither party had been afforded an opportunity to make submissions on whether a fixed sum was appropriate, how it should be calculated, or what the appropriate quantum should be. This absence of procedural opportunity formed the foundation of our appeal.
We therefore deliberately reframed the issue. Rather than advancing a purely outcome-based argument that the amount was excessive, we challenged the legitimacy of the decision-making process itself. We argued that the adoption of a fixed sum, without prior notice and without allowing submissions on that approach, constituted a denial of procedural fairness and an improper exercise of discretion.
By shifting the focus from “how much” to “how the decision was made,” we elevated the appeal to a question of legal principle. This reframing was instrumental in the success of the appeal.Appeal Outcome: Restructuring, Not Eliminating, Costs Liability
On appeal, the Court accepted that the original costs order was affected by procedural error and set it aside. The Court then re-exercised the discretion.
The result was not the complete elimination of costs liability. The Court recognised that the husband’s settlement offers remained relevant. However, the approach to costs was fundamentally restructured.
Instead of a single fixed sum, the Court confined the wife’s liability to a defined category of costs, assessed on a party/party basis, and limited both in scope and in temporal application. This transformed what had been a concentrated and inflexible financial burden into a more proportionate and controlled liability framework.
The Outcome
Achieving Both Substantive and Procedural Success.
The client ultimately achieved a dual-layered outcome.
At the property level, she secured a 57.5% share of the asset pool, reflecting both her contributions and her future needs. At the costs level, we successfully overturned a significant fixed-sum costs order and replaced it with a more limited and structured liability.
This ensured that the economic benefit of the property outcome was not undermined by an excessive and procedurally flawed costs order.
This case illustrates that success in family law proceedings is rarely defined by a single judgment. While property division is often seen as the endpoint, the true financial outcome for a client may depend heavily on how costs, enforcement, and appellate risks are managed.
Our approach in this matter was not to focus on winning every individual step, but to maintain strategic control over the trajectory of the case as a whole. From parenting arrangements to property division, and ultimately to the costs appeal, each stage was approached with a view to preserving the client’s overall position.
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Handling team: NSLegal
Disclaimer: this case study is provided for general reference only, does not constitute legal advice, and does not guarantee similar results. To protect our client’s privacy, identifying details on this page have been de-identified. For advice on your specific circumstances, please contact our lawyers.