Derek Larsen as Trustee for the Larsen Superannuation Fund & Anor v Tastec Pty Ltd ACN 051516682

Costs of the proceedings on remitter

1. The defendants submitted that the plaintiffs' claim was wholly unsuccessful and that the correct exercise of the costs discretion in those circumstances is to order the plaintiffs to pay the defendants' costs of the remitter. The defendants cited McHugh J in Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [66]: By far the most important factor which courts have viewed as guiding the exercise of the costs discretion is the result of the litigation. A successful litigant is generally entitled to an award of costs. That principle was reaffirmed in Northern Territory v Sangare [2019] HCA 19; 265 CLR 164 (per Kiefel CJ, Bell, Gageler, Keane and Nettle JJ) at [24] - [25].
2. The defendants submitted that there were no disentitling factors to be considered.
3. I agree with the defendants' submissions. The plaintiff was wholly unsuccessful on the remitter and the defendants are entitled to an award of costs in their favour on the ordinary basis.

Costs of the proceedings before SJ Gibb DCJ

1. The Court of Appeal set out the history of the costs orders made by the District Court at first instance in the Court of Appeal decision at [161] - [164]: 161. The Larsens also sought to set aside the primary judge's order as to costs and in lieu thereof an order that the respondents pay the costs below. The orders of the primary judge dismissing the proceedings, dated 17 December 2021, included an order that the Larsens jointly and severally pay the respondents' joint and several costs in respect of the whole proceedings (Order 6), and a further order granting leave to the parties to apply within 14 days for a variation of the costs order (Order 7). Although it was not included with the appeal books, at the conclusion of the appeal hearing it emerged that her Honour made further orders as to costs on 4 March 2022, following an application that the respondents made for indemnity costs. A copy of her Honour's further orders, together with her Honour's reasons on the application, were provided to the Court after the hearing. 162. On 4 March 2022, her Honour revoked Order 6 of the orders made on 17 December 2021 and substituted an order that the Larsens jointly and severally pay the respondents' joint and several costs in respect of the whole of the proceedings: (1) on the ordinary basis up until 7.10pm on 22 July 2021; and (2) on the indemnity basis as and from 7.10pm on that date (save for the costs of the respondents' motion of 30 December 2021, which the Larsens were to pay on the ordinary basis). 163. In making those orders, her Honour concluded that by a Calderbank letter the respondents had made a genuine offer of compromise which sought to bring a commercial solution to a building dispute where the responsible builder was not joined to the proceedings; and were thwarted when they pressed for a settlement conference. Her Honour also found that the offer was a sensible and a reasonable proposal to bring the proceedings to an end, and that the Larsens' joint and several rejection of it was not reasonable. 164. In circumstances where the question of relief under the ACL remains outstanding, I consider it necessary to set aside the order that her Honour made as to costs below, and for that issue to be considered afresh following resolution of the outstanding issue, including as to indemnity costs.
2. The defendants argued that there is no practical difference in the outcome of these proceedings between the First DCJ judgment and the Second DCJ judgment. In neither case was any award of damages given (or any relief), as sought by the plaintiffs.
3. The defendants submitted, to summarise and paraphrase, that, even if the plaintiffs' damages claim had been determined at first instance in accordance with the Court of Appeal Judgment, there would have been no award of damages or any other relief and the circumstances of the offer of settlement, and the rejection of a settlement conference, would still have supported the decision by Gibb DCJ to order costs on the indemnity basis from 7:10pm on 22 July 2021 (except for the cost of a motion of 30 December 2021).
4. I accept the defendants' arguments.
5. No basis has been advanced on behalf of the plaintiffs for any different outcome and I am not aware of the existence of any such basis.
6. The appropriate order in respect of the costs of the proceedings at first instance are the orders made by Gibb DCJ. The Court of Appeal set those orders aside so that the costs in the District Court could be considered afresh on the remitter because, if relief had been granted on the remitter, the costs orders at first instance may no longer have been appropriate. As the plaintiffs have been unsuccessful in obtaining an award of damages or any other relief under the ACL on the remitter, the orders on costs made at first instance remain the appropriate orders.

Orders

1. The following orders will issue: 1. The plaintiffs are to pay the defendants' costs of the remitter on the ordinary basis. 2. The plaintiffs are to pay the costs of the District Court proceedings before Gibb DCJ on the ordinary basis up until 7:10pm on 22 July 2021 and on the indemnity basis as and from 7:10pm on that date (save for the costs of the defendants' motion of 30 December 2021 which the plaintiffs are to pay on the ordinary basis).

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