First Plaintiff v Defendant

2 This group proceeding was commenced by generally indorsed writ filed on 15 September 2023. Krakouer filed a statement of claim on 5 March 2024 ('SOC').

3 At a case management conference on 24 May 2024, both parties raised the prospect of pleading amendments. Krakouer said he intended to amend his writ and SOC to add all Australian Football League clubs as defendants. The defendant, the Australian Football League ('AFL'), said Krakouer's current pleading would need to be amended to cure a number of fundamental defects. Orders were made requiring the AFL to give Krakouer notice of the alleged defects in the SOC, and for Krakouer to serve a proposed amended statement of claim.

4 Krakouer provided the AFL with a proposed amended statement of claim ('PASOC') dated 13 September 2024, adding five AFL clubs ('AFL clubs') as defendants and making several significant changes to the pleadings against the AFL.

5 On 10 October 2024, the AFL gave Krakouer notice of alleged defects in the PASOC.

6 On 4 November 2024, orders were made requiring Krakouer to file and serve the PASOC and an application to join the AFL clubs as defendants; providing an opportunity for the AFL to file and serve any application it wished to make in relation to the PASOC; timetabling the filing of evidence and submissions; and listing the anticipated applications for hearing on 11 March 2025 on an estimate of three days ('November 2024 orders').

7 On 7 November 2024, Krakouer filed and served the PASOC via email in substantially the same form as it was provided on 13 September 2024.

8 On 26 November 2024, Krakouer filed and served a summons dated 22 November 2024 seeking leave to file and serve the PASOC and to join the AFL clubs as defendants ('amendment application').

9 On 29 November 2024, the AFL filed and served a summons for the following orders:

(a) pursuant to s 33N of the Supreme Court Act 1986 (Vic) ('Act'), the proceeding no longer continue as a group proceeding;

(b) the amendment application be dismissed; and

(c) the SOC be struck out with leave to replead

10 On 11 February 2025, Krakouer advised the AFL that he no longer sought the relief set out in the amendment application; proposed to make further amendments to the SOC; and would seek an amendment to the Court's timetable to facilitate this.

11 The proceeding was listed for a case management conference at Krakouer's request on 3 March 2025. Michel Margalit, solicitor for Krakouer, affirmed an affidavit on 28 February 2025 in which she explained that after further consideration, Krakouer acknowledged that there were aspects of the PASOC that required augmentation and repleading. Margalit said that instructions had been received from Neil 'Nicky' Winmar, and that Krakouer was considering applying to have Winmar added as a second plaintiff to the proceeding. Margalit said new counsel had recently been engaged to undertake the task of reviewing and repleading the SOC. Margalit said:

[Krakouer] recognises that there has been delay and wasted costs occasioned by [Krakouer's] conduct in seeking to join the proposed defendants and indulgences have been afforded to [Krakouer]. [Krakouer] is again conscious that by this course he is requesting a further indulgence. In recognition of that fact, [Krakouer] agrees to pay the [AFL] and proposed defendants' costs of [Krakouer's] Summons to the extent that any of those costs are wasted by reason of any amended summons filed by [Krakouer] on 24 April 2025.

12 Following the case management conference on 3 March 2025, orders were made providing for Krakouer to serve a further proposed amended pleading and amended summons by 24 April 2025; ordering that Krakouer pay any wasted costs of the AFL clubs by reason of amendment of his summons; and reserving the AFL's costs.

13 Krakouer provided a further proposed amended statement of claim on 24 April 2025 ('ASOC'), which sought to join Winmar as a second plaintiff, and did not persist with the earlier application to join the AFL clubs as defendants. The ASOC amended the SOC substantially. For efficiency and clarity, it was presented as an entirely fresh document rather than a repleading of the SOC.

14 On 14 May 2025, the AFL consented to Winmar being joined as a second plaintiff and to the filing of the ASOC, but sought to reserve its rights in relation to the proposed pleading, including in respect of strike out and declassing.

15 On 9 September 2025, the AFL filed a summons applying for the following orders:

1. [Krakouer] pay the [AFL's] costs thrown away in relation to the amendments in [Krakouer's ASOC], and the summonses of it dated 29 November 2024 and of [Krakouer] dated 22 November 2024.
2. The [AFL's] costs thrown away be taxable immediately.
3. [Krakouer] pay the [AFL's] costs of this summons.

16 Krakouer submits that the costs of the pleading amendments and the 26 November and 29 November 2024 summonses should be in the cause, and that the AFL should pay his costs of the 9 September 2025 summons.

17 The amendments in the ASOC have resulted in the abandonment of significant allegations in the SOC and PASOC. Work done by the AFL in connection with those now abandoned allegations is wasted. The abandonment of each prior iteration of the statement of claim was made well into the preparation for argument about leave to amend and after repeated communications from the AFL about the inadequacy of Krakouer's pleadings.

18 Similarly, the AFL's 29 November 2024 summons was rendered otiose by Krakouer abandoning the pleading amendment he proposed at that time. Costs incurred by the AFL in relation to its summons have also been wasted.

19 In the present case, there are good reasons to depart from the default position that the costs of the parties' summonses should be in the proceeding and should not be taxed until completion of the proceeding.[1] Krakouer's protracted application for leave to amend his pleading is accurately described as 'an instance of a party seeking the court's indulgence to accurately formulate its pleading which, in an ideal world, it should have got right in the first place'.[2]

20 The following factors support the conclusion that a costs order in favour of the AFL should be taxable immediately:

(a) Absent an order for immediate taxation, the AFL will be deprived of costs to which it is entitled for a substantial and indefinite period.

(b) The costs thrown away in relation to the abandoned allegations are discrete from all other issues that will eventually require determination and are quantifiable.

(c) The conduct of Krakouer in making then abandoning allegations was both unreasonable and involved a want of diligence.

21 The only formal pleadings in this case are the general indorsement, SOC and ASOC. The significance of the amendments and proposed amendments, and the resulting work required to be undertaken by the AFL should not be overstated. Further, it cannot be said at this stage of the proceeding that work associated with allegations that are now not formally pursued as pleadings will be wasted. An order for costs thrown away should not be made at this stage because it is not possible to determine what should be the extent of that order, or to identify on taxation the scope of any costs thrown away.

22 The Court has an unfettered discretion in relation to the costs of steps taken in a proceeding.[3]

23 The Supreme Court (General Civil Procedure) Rules 2025 (Vic) ('Rules') modify costs in some circumstances. Relevantly, in relation to pleading amendments, r 63.17 reads:

Where a pleading is amended (whether with or without leave) the costs of and occasioned by the amendment and the costs of any application for leave to make the amendment are the parties' costs in the proceeding, unless the Court otherwise orders.

Relevant to interlocutory applications r 63.20 reads:

Where an interlocutory or other application is made in a proceeding and -

(a) no order is made on the application; or

(b) the order made is silent as to costs -

the costs are the parties' costs in the proceeding, unless the Court otherwise orders.

The effect of rr 63.17 and 63.20 is to create a starting position that in the specified circumstances, the costs of the parties are costs in the proceeding. A party seeking an order departing from that starting position bears the onus of establishing why such an order should be made.[4]

24 Pleadings have not closed. The AFL is to file a defence to the ASOC by 13 November 2025. It has not previously filed a defence. Accordingly, the Rules did not require that Krakouer obtain leave to amend the pleadings against the AFL.[5] Krakouer required leave to file the ASOC because of the application to add Winmar as a second plaintiff,[6] and because the ASOC amended the group member definition and therefore had the effect of discontinuing claims made on behalf of some persons.[7]

25 The default position is that costs awarded on an interlocutory application or hearing will not be taxed until the proceeding is completed.[8] In Setka v Abbott (No 2), the Court of Appeal, discussing the circumstances that might justify departure from the default position, said:[9]

The discretion to order that the default position not apply is confined only by the principle that the discretion must be exercised judicially. But it has been held, depending upon the circumstances of the particular matter, that the default position may be upset where - (1) there is prospect of considerable delay in completion of the proceeding; (2) the issue the subject of the interlocutory order was discrete from what will finally require determinations; (3) the party against whom the substantive order was made was guilty of unsatisfactory conduct - described variously as 'unreasonable' or 'reprehensible', or as involving a want of 'competence and diligence'.

The Court of Appeal concluded that the circumstances of that case did not justify departing from the default position. In relation to the consideration of delay, it said:[10]

First, the plaintiff's change of position has brought about delay. In our view, the new arguments could have been first ventilated months ago. But the delay has not been very great, and trial - once the pleadings issues have been exhausted - will not have been much delayed.

26 The AFL clarified in submissions that it sought a costs order for work directed to matters in respect of each iteration of the pleading that were unnecessary by reason of the ASOC. The AFL submitted the costs order should cover all work done by it in relation to the pleadings from the filing of the SOC in March 2024 until the filing and service of the ASOC.

27 It is not disputed that the AFL is entitled to an award for some costs thrown away. The issues for determination are:

(a) whether the AFL's costs should be reserved at this stage for determination after the initial trial of the proceeding;

(b) if costs are to be awarded now, what the scope of the award should be; and

(c) should any costs awarded to the AFL be taxable and payable immediately?

28 There has been no determination on the merits of the competing summonses filed by the parties in November 2024. However, the significant changes to Krakouer's case represented by the ASOC are an implicit acknowledgement of the need to address at least some of the pleading defects identified by the AFL and that the AFL's strike out application would have succeeded at least in part. Krakouer chose not to persist with the application opposed by the AFL, to join the AFL clubs as defendants. Krakouer's change of course rendered the balance of the strike out application otiose. The AFL has not persisted with the application under s 33N of the Act at this stage because of the significant amendment Krakouer made to his pleadings.

29 From November 2024, the AFL was entitled to proceed on the basis of the November 2024 orders. The determination of those applications was disrupted when Krakouer abruptly changed course in February 2025. Work done by the AFL in relation to the amendment applications has been wasted. I conclude in all the circumstances that Krakouer should be ordered to pay the AFL's costs of the amendment application and the strike out application up to and including 23 April 2025, being the day before the ASOC was served.

30 The position is not so clear in relation to the pleading amendments proposed and actually made by Krakouer.

31 The claims made in this proceeding are novel and complex. It is not surprising that it has taken Krakouer a number of attempts, made in the context of complaints by the AFL about defects in the SOC and PASOC, and case management by the Court, to resolve the ASOC to a point that is sufficient to allow the case to proceed.

32 The AFL has not been required to file a defence until now.

33 Because pleadings have not closed, Krakouer was entitled to amend the SOC without leave.

34 There have been some significant changes to Krakouer's pleading between the SOC, PASOC and ASOC. However, matters that were previously pleaded or proposed but have not been retained in the ASOC may still be a relevant part of the case pursued by Krakouer and Winmar against the AFL. At this stage, the extent that work done by the AFL in responding to different iterations of Krakouer's pleadings has been wasted is unclear. Further, some of the amendments in the PASOC only indirectly impacted the AFL. An example is a novel cause of action which Krakouer pleaded in the PASOC only against the AFL clubs.

35 Taking into account all the circumstances, I conclude a more limited costs order should be made in favour of the AFL in relation to the pleadings amendments. The reasonable process of resolving the statement of claim was sent off course by the filing and service of the PASOC and the amendment application. If Krakouer had responded to the AFL's complaints that the SOC was defective by filing and serving the ASOC, I would have ordered that the costs of that process be the parties' costs in the proceeding. It is Krakouer's failed attempt to amend in the terms of the PASOC which justifies an order for costs made in favour of the AFL. I limit those costs to the period from 7 November 2024, when Krakouer filed and served the PASOC in accordance with timetabling orders, to 23 April 2025, being the day before the ASOC was served.

36 The remaining question is whether the costs awarded to the AFL should be taxable and payable immediately.

37 The circumstance of delay does not weigh heavily in favour of an order for immediate taxation. Despite having been on foot for over two years, this proceeding is in its infancy. Pleadings have not closed. The initial trial will not take place until 2027. I accept there will be significant delay in the AFL receiving the benefit of the costs order I will make. However, the delay for which Krakouer is responsible in relation to the November 2024 summonses is not great.

38 The work done for which the AFL will be awarded costs is not discrete from the matters to be determined at an initial trial. Krakouer's proposed pleading was central to both applications. It is evident from the materials that the AFL's assessment of the various pleading iterations has involved consideration of matters that are quite fundamental to the negligence claim advanced by Krakouer. It is quite conceivable that a significant part of the work undertaken by the AFL in relation to the PASOC and the applications will remain relevant to the merits of the proceeding as it progresses. The AFL effectively accepted as much in final submissions by acknowledging that identification of costs thrown away may prove difficult on immediate taxation. The difficulty in determining, at this stage, what work has been wasted, and the risk of repeating the work associated with taxation of costs at the interlocutory and final stages are matters that weigh heavily against an order for immediate taxation.

39 Krakouer's conduct in serving the PASOC, making the amendment application and opposing the strike out application was not unsatisfactory in the sense of being unreasonable or reprehensible. Krakouer was struggling to sufficiently articulate the case he wished to make in the proceeding. However, that is not entirely surprising having regard to the complexity and novelty of the claim. When it became apparent to Krakouer in early 2025 that the PASOC could not be supported and that he would need to change course, he acted quickly. At the same time Margalit conceded reasonably on Krakouer's behalf that the AFL was entitled to an award of some costs thrown away as a result. Krakouer's conduct is not such as to weigh in favour of an order for immediate taxation.

40 Having regard to all the circumstances I conclude there is not a sufficient basis for departing from r 63.20.1 of the Rules by ordering immediate taxation.

41 The AFL has enjoyed only partial success with the costs application. Various offers have been made by the parties in relation to costs before the summons was heard. I conclude in the circumstances that the parties' costs of the 9 September 2025 summons should be in the proceeding.

42 Costs orders will be made in accordance with these reasons.

[1] Supreme Court (General Civil Procedure) Rules 2025 (Vic) rr 63.17, 63.20.1 ('Rules').

[2] Edelman v Badower [2010] VSC 427, 10 [31].

[3] Supreme Court Act 1986 (Vic) s 24(1) ('Act').

[4] JC Jarol Pty Ltd & Anor v Novamex International LLC (Costs ruling) [2023] VSC 378, 15 [42]; Centraland Holdings Pty Ltd v Amal Trustees Pty Ltd [2025] VSC 656, 2 [10].

[9] [2013] VSCA 376, 7-8 [27] ('Setka'); Dale v Clayton Utz (No 3) [2013] VSC 593, 13-16 [58]-[71], 19 [80]-[82].