Rupell and Rupell

In the Family Court of Australia, Mrs Rupell (the applicant wife) sought an order that Mr Rupell (the respondent husband) pay her costs of and incidental to the proceedings, including the costs of a specific costs application. The husband sought the dismissal of the wife's costs application and that the wife pay his costs of that application. The court was required to determine whether circumstances justified making an order for costs other than the usual rule that each party bears their own costs, and if so, what order should be made.

The court considered the wife's application for costs filed after the time permitted by the rules, dispensing with compliance. It then examined the husband's response, which sought dismissal of the wife's application and an order for his costs. The central legal issues revolved around the interpretation and application of section 117 of the *Family Law Act 1975* (Cth), particularly subsections (2) and (2A), which allow for costs orders in circumstances the court deems just, having regard to factors such as offers of settlement and the financial circumstances of the parties. The court also considered the common law principles relating to offers of settlement.

Justice Watts applied the principles regarding offers of settlement, noting that the purpose of considering such offers is to encourage their serious consideration and avoid unnecessary litigation. The court found that the wife's offer of 22 December 2005, when properly interpreted, resulted in her receiving $53,000 less than what was ordered in the final property settlement. Conversely, the husband's offer in January 2004, if accepted, would have resulted in the wife receiving a better outcome than she ultimately achieved. The court also considered the financial circumstances of both parties, noting the husband's limited liquid funds to meet a costs order due to substantial property settlement obligations. Despite the wife's offer being closer to the final award than the husband's initial offer, the court concluded that the husband's January 2004 offer, which would have placed the wife in a significantly better financial position, counterbalanced the weight of the wife's later offer.

Ultimately, the court dismissed the wife's application for costs, finding it was not just to make a costs order in her favour. The court ordered that any party may apply to relist the matter for further submissions regarding the costs of the costs application itself, with such an application being at the risk of the applying party as to costs.