Ruane and Bachmann-Ruane and Ors (No. 2)

This case concerned an application for costs made by the first respondent wife against the second respondent law firm and third respondent counsel in discrete proceedings before the Family Court of Australia. The wife sought an order that the second and third respondents pay her costs of the discrete application on an indemnity basis. The core of the dispute involved a challenge to the Court's accrued jurisdiction, which the wife ultimately succeeded on.

The legal issues before the Court were whether an order for costs should be made pursuant to section 117(2) of the *Family Law Act 1975* (Cth), and if so, whether those costs should be awarded on an indemnity basis. The Court was required to consider the wife's arguments that she was wholly successful, that the respondents' challenge to jurisdiction was ill-founded, and that there was a disparity in financial resources between the parties, with the second respondent being in a better financial position. The Court also had to determine if the circumstances justified an award of indemnity costs, which are considered an exception to the general rule regarding costs.

Justice Murphy found that while the wife was successful in the discrete proceedings, the challenge to the Court's jurisdiction, though unsuccessful, was neither capricious nor ill-founded, and the Court was required to satisfy itself of its jurisdiction. The Court rejected the wife's submission that the respondents' challenge was vexatious or for an improper purpose. However, the Court considered the disparity in financial resources between the wife and the insurers behind the second and third respondents to be a significant factor, alongside the wife's lack of success in her claim for indemnity costs. Consequently, the Court ordered that the second and third respondents pay the wife's costs of and incidental to the proceedings, but not on an indemnity basis.