Indemnity Costs Mostly Survive Appeal: Husband Wins $7,200 Correction but Still Pays Wife’s $164,700 Appeal Costs!

In Rockford & Burnell [2026] FedCFamC1A 99, Strum J mostly dismissed the husband’s appeal from an indemnity costs order requiring him to pay the wife’s costs of the financial proceedings. The husband had been ordered to pay $171,900 on an indemnity basis, principally because of his litigation conduct, false evidence, non-disclosure, collateral pressure on the wife and her solicitor, and unreasonable rejection of offers. The appeal succeeded only on a small mathematical correction, reducing the amount to $164,700. Because the husband’s success was minor and the wife conceded the error once identified, he was still ordered to pay the wife’s appeal costs, with the $7,200 overpayment set off against those costs.

🧩 Facts and Issues

Facts:

The original property proceedings ran over six trial days and produced final property orders under s 79. The wife later sought costs. The primary judge ordered the husband to pay the wife’s costs on an indemnity basis, fixed at $171,900.

The primary judge’s reasons relied heavily on findings made in the property judgment, including that the husband:

• gave deliberately false and misleading evidence;
• failed to make adequate disclosure;
• engaged in coercive and controlling behaviour;
• caused the wife significant anxiety and pressure;
• pursued allegations against the wife’s solicitor;
• threatened collateral legal action;
• was belligerent about children’s school fees and financial support; and
• prolonged the proceedings through groundless contentions and unnecessary complexity.

The husband appealed the costs order. He alleged bias, failure to consider one of his settlement offers, factual errors, calculation errors, and an improper exercise of discretion. His earlier appeal from the substantive property judgment had been deemed abandoned, so the findings in that judgment remained undisturbed.

Issues:

1. Did the primary judge’s adverse findings create a reasonable apprehension of bias in the later costs judgment?
2. Did the primary judge fail to consider a material settlement offer made by the husband on 25 November 2021?
3. Were factual errors in the costs judgment material?
4. Was the indemnity costs order plainly wrong?
5. Should the mathematical error of $7,200 affect the costs of the appeal?

⚖️ Applicable Law – Legislation, Regulations, Rules

Family Law Act 1975 (Cth)

• s 117 — applicable costs provision because the proceedings were finally determined before commencement of the 2024 amendments.
• s 79 — underlying property adjustment proceedings.
• s 102NA — relevant background, because the husband had been prohibited from personally cross-examining the wife and was represented under the Family Violence and Cross-Examination of Parties Scheme.

Federal Circuit and Family Court of Australia Act 2021 (Cth)

• s 26 — appellate jurisdiction from Division 2.
• s 36 — appellate powers and short-form reasons where no general principle arises.

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)

• Schedule 3 — party/party costs schedule used in fixing appeal costs.

📌 Precedents Relied On

• House v The King — appellate intervention in discretionary decisions requires identifiable error or a plainly unjust result.
• Ebner v Official Trustee in Bankruptcy — apprehended bias test.
• Johnson & Johnson — the fair-minded observer is assumed to understand ordinary judicial practice.
• Sunshine Pty Ltd v ASIC — adverse findings at one stage do not prevent the same judge dealing with a later consequential stage.
• Penfold v Penfold — s 117 costs orders require justifying circumstances, but the discretion is broad.
• Fitzgerald v Fish — a single factor may justify a family law costs order.
• Whisprun Pty Ltd v Dixon — reasons need not mention every fact or argument.
• Housing Commission v Tatmar Pastoral — a judge need not decide or itemise every argument in a discretionary decision.
• AMS v AIF — appellate courts avoid overly pernickety analysis of discretionary reasons.

🧠 Analysis

Issue

Did the husband establish appealable error in the indemnity costs order, or was the appeal largely an impermissible attempt to re-argue findings already made in the abandoned property appeal?

Rule

Costs under the former s 117 are discretionary. The starting point is that each party bears their own costs, but the Court may depart from that position where there are justifying circumstances. Relevant matters include financial circumstances, conduct of the parties, compliance with orders, offers of settlement, success or failure in the proceedings, and any other relevant matter.

An indemnity costs order is available where the conduct of a party justifies a stronger costs response. On appeal, the question is not whether the appeal judge would have made the same order. The question is whether the primary judge made a House v The King error.

Adverse findings in a substantive judgment do not, by themselves, establish bias in a later costs decision. It is ordinary judicial practice for the same judge to determine costs by reference to findings already made in the principal judgment.

Application

1. Bias ground failed

The husband argued that the costs judgment and transcript showed bias. Strum J rejected that.

The costs application necessarily required the primary judge to consider findings already made in the property judgment. Those findings were strongly adverse to the husband, but that did not mean the judge was biased. It is normal for a trial judge to determine costs after trial by reference to findings made in the principal reasons.

The husband relied on transcript passages where the primary judge reminded him that he had not persuaded her at trial on allegations of non-disclosure by the wife. Strum J held there was nothing in those exchanges that could cause a fair-minded lay observer to apprehend bias. The husband had not objected during the costs hearing, and in any event, the complaint had no substance.

2. The husband could not use the costs appeal to attack the abandoned property appeal

This was an important feature of the appeal. The husband had appealed the substantive property judgment, but that appeal was deemed abandoned. Therefore, the findings in the property judgment remained standing.

Strum J criticised the husband’s attempt to use the costs appeal as a collateral attack on those findings. The costs judge was entitled to rely on the property findings, including findings about dishonesty, non-disclosure, coercive conduct, school fee obstruction, and pressure placed on the wife and her lawyers.

3. Failure to mention the 25 November 2021 offer was not material

The husband argued the primary judge failed to consider a settlement offer he made on 25 November 2021. The offer had been before the primary judge and was discussed during the costs hearing, but it was not specifically referred to in the costs judgment.

Strum J held that omission was not material. A judge is not required to mention every fact, document or argument. More importantly, the offer would not have changed the outcome. On the analysis before the appeal court, even if the offer were assessed favourably to the husband, the wife would still have received substantially less than she ultimately received at trial.

The decisive factor in the costs order was not simply offers. It was the husband’s egregious litigation conduct, which the primary judge found had significantly increased the wife’s costs.

4. Some factual errors existed, but they were immaterial

The husband complained that the primary judge referred to the wife having taken “enforcement action” about financial support. Strum J accepted there was no evidence of enforcement action in that precise sense, but the error was not material.

The underlying findings remained: the husband had behaved belligerently and obstructively about child support and school fees, refused to pay arrears until orders were made, challenged school fee invoices on incorrect grounds, and caused the wife unnecessary involvement with schools, the Child Support Agency, solicitors and the Court.

Another statement about the wife’s income from her medical practice was also accepted as not entirely correct, but again it was immaterial because the property judgment had correctly recorded the relevant details, and the error did not affect the costs discretion.

5. The indemnity costs order was justified

The indemnity costs order survived because the primary judge’s reasons clearly identified justifying circumstances. The husband’s conduct was described as egregious and included:

• repeated failures to comply with orders;
• failures regarding valuations and disclosure;
• false allegations against the wife’s solicitor;
• attempts to restrain the solicitor from acting;
• accessing private solicitor-client emails;
• threatening collateral litigation;
• threatening to remove property fixtures;
• giving deliberately false evidence; and
• prolonging the proceedings through groundless contentions.

Those findings supported a conclusion that the usual rule should be displaced and that indemnity costs were warranted. The resulting order was not plainly wrong, nor incongruent with the findings.

6. The only successful point was a $7,200 calculation error

The wife’s counsel properly conceded a calculation error in the costs amount. The correct figure was $164,700, not $171,900. Specifically, one component of the order had to be reduced from $35,202 to $28,002.

That meant the husband had overpaid by $7,200. The appeal was allowed only to that limited extent.

7. Husband still had to pay the wife’s appeal costs

Although the husband had some success, it was minor — about 4% of the costs order. Strum J described it as de minimis.

The husband had not properly particularised the calculation error. It was the wife’s lawyers who identified and conceded it. Even after the concession, the husband did not seek to fix the issue under the slip rule.

Because the husband was overwhelmingly unsuccessful, he was ordered to pay the wife’s appeal costs of $23,193.56. The $7,200 overpayment was offset, leaving a net amount payable by the husband to the wife of $15,993.56.

Conclusion

The appeal was allowed only in part to correct the mathematical error. The costs order was reduced from $171,900 to $164,700.

Otherwise, the appeal was dismissed. The indemnity costs order stood. The husband was ordered to pay the wife’s appeal costs fixed at $23,193.56, offset by the $7,200 overpayment, resulting in a net payment of $15,993.56 to the wife.

🧠 Take-Home Lesson

This case is a warning that costs appeals are not a back door to re-litigate the substantive case. If the property appeal is abandoned, the findings in the property judgment stand. A party cannot then attack those findings indirectly through a costs appeal.

It also shows that small success on appeal does not necessarily protect a party from costs. The husband corrected a $7,200 arithmetic error, but he lost everything else. Because the error could have been fixed by the slip rule, and because the wife conceded it once identified, the husband’s minor success did not justify depriving the wife of her appeal costs.

The broader lesson is simple: litigation conduct matters. False evidence, non-disclosure, collateral pressure, abusive communications, and unreasonable rejection of settlement offers can turn an ordinary family law costs dispute into an indemnity costs order.