Dunstan v Rickwood (No 2)

This matter concerned an appeal from a decision of the Family Court of Australia regarding costs in property adjustment proceedings under the *Property (Relationships) Act 1984* (NSW). The dispute arose between the parties, Dunstan and Rickwood, following the breakdown of their de facto relationship.

The primary legal issues before the Court of Appeal were whether the trial judge erred in their approach to awarding costs, specifically concerning the application of a "starting position" that each party should bear their own costs in such proceedings. The court was also required to determine whether the respondent had acted unreasonably to warrant an award of indemnity costs, and whether any offers made by the parties complied with the rules for offers of compromise or constituted a valid *Calderbank* letter.

The Court of Appeal held that the discretion conferred by s 98 of the *Civil Procedure Act 2005* (NSW) and UCPR 42.1 could not be confined by adopting a "starting position" principle that each party should pay its own costs. Instead, the court affirmed the general principle that costs should follow the event. Furthermore, the court found that the offers made by the parties did not meet the requirements for an offer of compromise or a *Calderbank* letter, and that the respondent had not acted so unreasonably as to justify an award of indemnity costs.

Consequently, the Court of Appeal ordered that the appellant pay the respondent's costs of the trial from August 2004.