Costello and Condi & Anor

This case concerned an application before the Family Court of Australia, brought by the Second Respondent, Ms Condi, against the Applicant, Mr Costello. The dispute arose from substantive family law proceedings concerning property. Ms Condi sought to vary an existing court order that restrained her from dealing with a specific property. The initial injunction, granted on 16 May 2012, prevented Ms Condi from selling, transferring, mortgaging, encumbering, or otherwise dealing with the property. Ms Condi's application sought to allow her to borrow $155,000, secured by a mortgage over the property, to fund her litigation expenses in defending the substantive claims.

The court was required to determine two primary issues. Firstly, whether to vary the existing injunction to permit Ms Condi to mortgage the property to secure the borrowed funds, and secondly, whether to order Mr Costello to provide security for Ms Condi's costs of the proceedings. The initial issue regarding the variation of the injunction was resolved by consent between the parties, with undertakings provided by both Mr Condi and Ms Condi to protect the First Respondent's interest in the property. The remaining issue for the court's determination was the application for security for costs.

Justice Kent's reasoning on the security for costs application focused on the principles outlined in section 117(2) and (2A) of the *Family Law Act 1975* (Cth) and relevant case law, including *Gerber & Bradley & Ors* and *Luadaka & Luadaka*. While acknowledging that Ms Condi might suffer prejudice if she were unable to recover her costs and that the parties had limited assets other than the property in question, the court ultimately found that there was no material risk that Mr Costello would be unable to pay any costs order made in Ms Condi's favour. This conclusion was based on Mr Costello's evidence of substantial assets totalling approximately $1.1 million and his stated intention to continue practising his profession in Queensland.

Consequently, the court dismissed Ms Condi's application for security for costs and associated relief. The court ordered that each party's costs of and incidental to this specific application be reserved to the trial judge, unless either party elected to have the costs determined on the papers or by way of a hearing. The variation of the injunction was made by consent, with specific terms outlined to protect the First Respondent's interest in the property in the event of a sale.