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The parties’ submissions

The plaintiff’s submissions

6. In his written submissions filed on 22 January 2026, the plaintiff noted that the following costs orders have been made at interlocutory stages in this matter: (a) An application in proceeding was brought by the plaintiff on 1 May 2023 to stay this matter, pending the outcome of the defendant’s application for special leave to appeal his criminal conviction. On 19 May 2023, the application was granted by the Registrar and costs were reserved. On 8 December 2023, Curtin AJ ordered that the costs of this application were to be costs in the cause: Kovalenko (a pseudonym) v Wallace (a pseudonym) [2023] ACTSC 375 (Kovalenko (No 1)) at [19]. (b) An application in proceeding dated 12 September 2023 was brought by the defendant seeking various orders, including to dismiss the proceedings; alternatively, to stay the proceedings; and for advance rulings on the admissibility of evidence in the civil hearing. On 8 December 2023, Curtin AJ also dismissed this application and ordered that the defendant pay the plaintiff’s costs of the application: Kovalenko (No 1) at [22].

7. The plaintiff sought costs for the two applications mentioned at [6], as well as costs of the substantive hearing on a party/party basis.

8. In written submissions filed on 30 March 2026, the defendant submitted that costs should not follow the event in this matter. In support of this contention, the defendant relied on the following submissions: (a) The defendant noted he has filed a notice of appeal regarding the findings in this matter, and costs should not be awarded prior to the determination of the appeal as this would be a “premature and potentially unjust”. (b) The defendant argued that the matter involved a “24-month interlocutory period where the Plaintiff’s solicitors consistently obfuscated and delayed the discovery process”, and therefore the plaintiff should “not be awarded costs for work that was artificially inflated by their own lack of cooperation”. (c) The plaintiff’s settlement offer was not a “genuine compromise” and was “illusory”, as the damages the plaintiff was ultimately awarded “precisely aligned” with this offer. The defendant therefore submits that this does not “trigger” indemnity costs. (d) The defendant states that the length of the hearing in this matter was “unnecessary” as he was “forced to meticulously challenge a multitude of false claims in sworn evidence”.

9. The defendant also sought a stay of execution on the costs order for this matter until his appeal is determined. In this respect, the defendant alleged that the plaintiff’s solicitors have denied him “the basic right to transparency regarding the Plaintiff’s legal fees”, as the plaintiff’s solicitors would not provide him with an itemised bill of costs.

10. In reply, the plaintiff submitted that the delay in the proceedings was primarily due to the temporary stay that was in place whilst criminal proceedings were on foot. The plaintiff also noted that the offer of settlement was initiated by the plaintiff and should not operate against the plaintiff in the exercise of the discretion as to costs. The plaintiff further noted that there would be no right of enforcement for costs until costs were agreed or assessed. The plaintiff confirmed that the defendant would be entitled to appeal against any costs decision or seek a stay of enforcement once costs were assessed, but submitted that there is no need for such an order at this stage. Determination

11. In Petersons v Pitches [2024] ACTSC 298, McWilliam J made the following comments regarding the award of costs (at [8] – [10]): Costs are in the discretion of the Court: r 1721(1) of the Court Procedures Rules 2006 (ACT). Such discretion is a very wide one, though it must be exercised judicially, in accordance with established principle and the statutory context: Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 (Oshlack) at [35], [36]. The fundamental purpose of the discretion is to compensate the successful party, not to punish the unsuccessful party: EMI Songs Australia Pty Ltd v Larrikin Music Publishing Pty Ltd [2011] FCAFC 92 at [9]. A substantially successful party is entitled to recover its costs from the opposing party, because it is just and reasonable that the party who has caused the other party to incur costs should reimburse that party for the liability incurred: Oshlack at [135]; Latoudis v Casey (1990) 170 CLR 534 at 543 per Mason CJ, at 562-3 per Toohey J, at 566-7 per McHugh J.

12. As the plaintiff was wholly successful in his claim, costs should be awarded in his favour on a party/party basis. None of the matters raised by the defendant provide any basis for ordering otherwise: (a) The existence of an appeal does not constitute a basis to decline to make a costs order in the plaintiff’s favour. Any concerns about an inability of the defendant to recover costs paid in the event that an appeal is successful can only constitute a basis for staying the enforcement of a costs order. Such a concern could not justify the Court refusing to make a costs order. (b) The delay in the proceedings was predominantly caused by the temporary stay that was in place whilst the criminal proceedings continued. Whilst this order was made on the plaintiff’s application, the order ensured that the defendant had a fair trial. If a stay had not been ordered, evidence provided by the defendant in the civil proceedings might have been used against him in the criminal trial. (c) The fact that the plaintiff’s offer at mediation was not accepted by the defendant is not a matter that ought in any way operate against the plaintiff in the exercise of the Court’s discretion as to costs. The plaintiff does not seek indemnity costs. (d) The length of the hearing of the present proceedings was entirely in the hands of the defendant. As the plaintiff submitted, the defendant was convicted of the conduct which founded the plaintiff’s claim in a judge alone criminal trial. The defendant’s appeals against his convictions were each dismissed. Despite this, the defendant chose to put the plaintiff to proof as to each element of his claim.

13. Accordingly, the plaintiff is entitled to the whole of his costs of the proceedings, including the interlocutory applications. I will make an order that the defendant pay the plaintiff’s costs as agreed or as assessed. This process will provide the defendant the transparency that he seeks concerning the plaintiff’s legal fees.

14. As noted above, the defendant also sought a stay of the execution of this costs order. The defendant did not file an application seeking these orders, as is required by Rule 2013 of the Court Procedures Rules. In any event, there is no evidentiary basis to make such an order at the present time. As the plaintiff noted, the defendant will have no right to enforce a costs order until costs are agreed or assessed. Accordingly, the defendant’s application for a stay must be dismissed.

Orders

15. The orders of the Court are: (1) The defendant is to pay the plaintiff’s costs as agreed or as assessed. (2) The defendant’s application for a stay of the execution of this costs order is dismissed.

I certify that the preceding fifteen [15] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Justice Baker. Associate: Date: