Australia, June 3 -- New South Wales Land and Environment Court issued text of the following judgement on May 5:
1. I delivered judgment in these proceedings on 26 March 2025, see ASCF Funding Solutions Pty Ltd v SL Property Maintenance Pty Ltd [2025] NSWSC 262. The Summons was dismissed. The parties were given an opportunity to make short written submissions about costs and agreed for the matter to be determined on the papers.
2. Section 98(1) of the Civil Procedure Act 2005 (NSW) provides:
(1) Subject to rules of court and to this or any other Act-
(a) costs are in the discretion of the court, and
(b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and
(c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.
3. Rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) provides:
Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.
4. It follows that the Defendant is entitled to an order for costs unless it appears to the Court that some other order should be made.
5. The Plaintiff contends that given the way the case was conducted and the Defendant's failure in respect of some of its arguments, the appropriate order as to costs is that the Plaintiff should pay two thirds of the Defendant's costs on the ordinary basis as agreed or assessed.
6. The Defendant contends that there should be no departure from the general rule, and seeks an order that the Plaintiff is to pay the Defendant's costs of the proceedings on the ordinary basis up to and including 3 February 2025 and on an indemnity basis from 4 February 2025 onwards. The basis for the application for indemnity costs is a Calderbank letter dated 3 February 2025.
Arguments why the Defendant should receive less than 100% of its costs
7. The Plaintiff submits that there should be a departure from the usual position because the Defendant ran every conceivable argument and did not focus its case. In particular, it submits that the Defendant ran two arguments which unnecessarily increased the costs of the proceedings. It contends that there should be a reduction in the costs awarded to the Defendant as the successful party because the Defendant has "unfairly, improperly or unnecessarily increased the costs": Windsurfing International Inc v Petit (1987) AIPC 90-441 at 37,861-37,862.
8. The relevant principles have been stated on many occasions. Nixon J recently expressed them in In the matter of Keybridge Capital Limited (No 3) [2025] NSWSC 423 as follows:
[11] Generally, a successful party should have the whole of its costs of the proceedings, including costs on an issue on which it has failed. However, in an appropriate case, a costs order may be formulated to reflect the degree of success on distinct issues. Relevant circumstances in which apportionment across different issues has been said to be appropriate include where a successful party has, in respect of one or more issues, unfairly, improperly or unnecessarily increased costs; where the bulk of the time has been taken on an issue on which the unsuccessful party has succeeded; or where a particular issue or group of issues is clearly dominant or separable: see Access Training Group Ltd v Jane [2024] NSWCA 204 at [190]-[191] (Ward P, Payne JA agreeing).
His Honour also cited Michael Hill Jeweller (Australia) Pty Ltd v Gispac Pty Ltd (No 2) [2024] NSWCA 274 at [20] and Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38].
9. The Plaintiff relied on Kumaran v Employsure Pty Ltd (No 2) [2022] NSWCA 247 at [12]-[14], which is in the following terms:
[12] The relevant question is whether there is any reason why costs should not follow the event of Mr Kumaran's and ELMO's ultimate success in defending the claim by Employsure. That question directs attention to whether there should be a special costs order reflective of Employsure's success on individual issues. In Calvo v Ellimark Pty Ltd (No 2) [2016] NSWCA 197 at [8]-[10], the Court (Ward, Gleeson, Leeming JJA) said:
[8] Where a plaintiff is ultimately unsuccessful, but a defendant is unsuccessful on some - perhaps the majority - of matters raised by way of defence, there is recurringly a question whether costs should follow the event, or whether there should be a special costs order reflective of the plaintiff's success on individual issues. In each case, it is very much a matter of impression, based upon matters such as the severability of the issues, the reasonableness of reliance upon the issues, and the extent to which the issues incurred expending additional costs and time.
[9] ..., the mere fact that a defence was reasonably arguable does not preclude a court from making a special costs order departing from the starting point of costs following the event. Ultimately, as Hodgson JA explained in Commonwealth of Australia v Gretton [2008] NSWCA 117 at [121]:
underlying the general rule that costs follow the event, and the qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the court considers to be the responsibility of each party for the incurring of the costs.
[10] In making that assessment of fairness, regard may be had to the extent to which an issue contributed to the cost of the trial, and the extent to which it was arguable. However, the discretion as to costs is not circumscribed by the binary question whether or not an unsuccessful defence was reasonably arguable. The ultimate question - what is the appropriate order to achieve fairness - may in an appropriate case require a more nuanced analysis.
[13] Whilst Mr Kumaran and ELMO failed on the competition issue which involved contested evidence, including cross-examination of experts, and also failed on the protectable interest issue, they ultimately succeeded on the enforceable restraint issue.
[14] The competition issue was a discrete issue, which the primary judge described as "an important issue indeed and it occupied a good deal of time at the hearing": primary judgment at [337]. Some reduction in costs should be made for Mr Kumaran and ELMO's failure on this issue. Dealing with the matter broadly, on the limited materials available to this Court, a reduction in the successful parties' costs of 35 per cent is appropriate.
*Rest of the document can be viewed at: (hhttps://www.caselaw.nsw.gov.au/decision/1969f449ad16d9df7f547a32)
Disclaimer: Curated by HT Syndication.
