SAFAR & MALOUF

In the Family Court of Australia, Ms Safar (the applicant) and Mr Malouf (the respondent) were involved in a property settlement dispute that had proceeded to arbitration. Following the arbitrator's award, Ms Safar sought orders to vary the award and for costs. The core of the dispute revolved around whether Ms Safar had achieved a better outcome in the arbitration than she had offered in a prior settlement proposal, and consequently, whether she was entitled to an order for costs against Mr Malouf.

The court was required to determine two primary legal issues. Firstly, whether a costs order should be made in favour of the applicant pursuant to section 117(2) of the *Family Law Act 1975* (Cth), having regard to the applicant's settlement offer and the outcome of the arbitration. Secondly, the court needed to consider the applicant's application to vary the arbitral award to allow a portion of the payment ordered to the respondent to be held in trust pending the determination of costs.

Justice Wilson found that the applicant was entitled to costs. This was based on the applicant's written offer to settle made on 20 November 2020, which the respondent failed to accept. The court determined that the arbitral award, while involving a lesser payment from the applicant to the respondent, was, when considered in its entirety, more favourable to the respondent than the applicant's settlement offer. The respondent's failure to accept the offer had unnecessarily prolonged the proceedings and incurred costs for the applicant. Consequently, the court ordered the respondent to pay the applicant's costs incurred from 20 November 2020 until the conclusion of the arbitration hearing.

In relation to the variation of the arbitral award, the court ordered that the applicant pay the respondent $144,944 of the $194,944 awarded by the arbitrator, with the remaining $50,000 to be paid into the trust account of the applicant's solicitors. This sum was to be held pending agreement or assessment of the costs ordered in favour of the applicant. The court set a deadline of 30 July 2021 for the parties to agree on costs, failing which the costs were to be assessed by a registrar by 30 September 2021.