COSTS - injunction - mixed success by parties - plaintiff pay 50% of the first defendant's costs to be taxed on the standard basis in default of agreement
The parties were given leave to file submissions as to the costs order to be made as a result. The plaintiff relies on submissions dated 5 February 2026 and 13 February 2026. The first defendant relies on submissions dated 30 January 2026 and 13 February 2026.
These reasons deal with costs. They follow from the principal ruling and use the same definitions.
On 21 November 2024, the plaintiff (the Contractor) filed an originating motion and summons. The plaintiff sought permanent injunctions, relevantly restraining the first defendant (the Principal) from having recourse to three bank guarantees. On 22 November 2024, his Honour Judge Wise granted the injunctions sought, on an interim basis, with a timetable allowing for further materials to be filed in relation to the summons.
The return of that summons came on before me for hearing, on 15 July and 23 July 2025.
On 19 December 2025 I handed down the principal ruling. I lifted the interim injunction in relation to Guarantee 1 and Guarantee 2 (which together had a value of $203,106). I did not lift the injunction in relation to Guarantee 3 (which had a value of $20,570).
The power to award costs is in the discretion of the Court.
With regards to applications for interlocutory injunctions, the usual order is that costs follow the event if a plaintiff is unsuccessful in its application, and to reserve costs for trial if the injunction is granted: Artcraft Pty Ltd v Passingham[2022] VSC 20 [31], per J Dixon J.
Here, both parties have enjoyed mixed success, and I consider it appropriate to apportion costs in order to do substantial justice between the parties.
The general rule is that costs should follow the event. Absent disqualifying conduct, the successful party should recover its costs even where it has not succeeded on all heads of claim.
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> The Rules of Court permit significant flexibility in determining questions of costs. In particular, the Court is entitled to examine the realities of the case and will attempt to do 'substantial justice' as between the parties on matters of costs.
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> Where there is a multiplicity of issues and mixed success has been enjoyed by the parties, a Court may take a pragmatic approach in framing the order for costs, taking into consideration the success (or lack of success) of the parties on an issues basis. Generally, if such an order is made, it is reflected in the successful party being awarded a proportion of its costs but not the full amount.
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> A Court may, when fixing costs in a claim where there has been mixed success, take into account complications which it considers will arise in the taxation of costs, as part of its consideration of the overall interests of justice.
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> Where a Court determines to make an order apportioning costs, then it does so primarily as 'a matter of impression and evaluation', rather than with arithmetical precision, having considered the importance of the matters upon which the parties have been successful or unsuccessful, the time occupied and the ambit of the submissions made, as well as any other relevant matter.
[5]
As stated in GT Corporation Pty Ltd v Amare Safety Pty Ltd (No 3) [2008] VSC 296, at [59] at item 9:
[6]
The court may, in its discretion, make an order that is a single order, fixing what proportion of a party's costs should be paid by another party, thus obviating cross orders or particular orders as to particular costs: (citations omitted).
[7]
The plaintiff was largely unsuccessful in its application. It sought to obtain orders restraining the first defendant from calling upon three bank guarantees. Ultimately, it only succeeded in restraining the first defendant on calling upon Guarantee 3, which was worth about 10% of the value of all three guarantees. On that basis, the first defendant submits that it should be awarded 90% of its costs of the application on the standard basis, to be payable forthwith.
However, as against that, I accept that the plaintiff needed to issue the summons, and incur costs, in order to obtain the restraint in relation to Guarantee 3.
The plaintiff submits that it is not possible to determine at this stage where the costs of the application should fall, and wants an order that costs be in the cause. It submits that the first defendant may not be similarly successful at trial in resisting an order being made with respect to bank guarantees 1 and 2, after there has been a full examination of the evidence.
This misunderstands the position. The trial will be principally directed to the remaining claims pleaded by the plaintiff, which primarily relate to contractual claims seeking payment from the first defendant, and to seeking declarations that certain contractual certificates are void. These claims will be determined independently of whether the first defendant was entitled to call upon the bank guarantees.
The plaintiff submits that the costs incurred by the parties in respect of the plaintiff's application would have necessarily been incurred in preparing for the trial. It submits that it would be unjust to award costs to the first defendant at this stage in those circumstances. However, I consider that most of the costs incurred in relation to this application were not relevant to what is involved in preparing for trial on the remaining issues.
In all the circumstances, I am satisfied that the appropriate exercise of my discretion as to costs is to order that the plaintiff pay 50% of the first defendant's costs of the summons, to be taxed on the standard basis, in default of agreement.
I will not order costs payable immediately, as sought by the first defendant.
The first defendant, in seeking that, relied to the plaintiff's evidence that if the first defendant was ordered to have recourse to any of the bank guarantees that the plaintiff would 'likely be wound up' (Hanvey affidavit, affirmed 7 March 2025, [31]).
However, even if the plaintiff is likely to be wound up (noting that the evidence relied on is now nearly a year old), this does not justify ordering costs being paid immediately.
Interlocutory costs orders are not ordinarily payable immediately, and nothing about this matter justifies departing from the usual course.
I will make orders that:
[8]
The plaintiff pay 50% of the first defendant's costs of the summons dated 21 November 2024, to be taxed on the standard basis, in default of agreement.
[9]
I certify that these 6 pages are a true copy of the reasons for ruling of Her Honour Judge Marks, delivered on 24 February 2026.