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Category: Procedural rulings

Parties: Brendan Curtis Lyon (Plaintiff)
Professional Standards Council of New South Wales (First Defendant)
Chartered Accountants Australia and New Zealand (Second Defendant)

Representation: Counsel:
M Robinson SC / A Poljak / D Gray (Plaintiff)
R Harvey (First Defendant)
J Giles SC / S Puttick (Second Defendant)
Solicitors:
Blair Arthur & Associates (Plaintiff)
Crown Solicitors Office (First Defendant)
Maddocks (Second Defendant)

File Number(s): 2025/00269769

Publication restriction: Nil

JUDGMENT EX TEMPORE (REVISED)

Introduction

1. This is an application for an order under Uniform Civil Procedure Rules 2005 (NSW) r 42.4(1) to limit the costs which may be awarded against the Plaintiff to $5,000.

2. The proceedings were commenced by a Summons filed on 14 July 2025. By that Summons, which was subsequently amended, the Plaintiff seeks to challenge the validity of the Professional Standards Scheme for Chartered Accountants Australia and New Zealand, the Second Defendant. The First Defendant is the Professional Standards Council of New South Wales which approved the Scheme and thereby gave it force on 28 February 2025.

3. The Scheme was approved under the provisions of the Professional Standards Act 1994 (NSW) (which I will refer to as “the Statute”). The long title of the Statute is as follows:

An Act to provide for the limitation of liability of members of occupational associations in certain circumstances and to facilitate improvement in the standards of services provided by those members.

4. The objects of the Statute are set out in s 3, which provides as follows:

3 Objects of this Act

The objects of this Act are as follows:

(a) to enable the creation of schemes to limit the civil liability of professionals and others,

(b) to facilitate the improvement of occupational standards of professionals and others,

(c) to protect the consumers of the services provided by professionals and others,

(d) to constitute the Professional Standards Council to supervise the preparation and application of schemes and to assist in the improvement of occupational standards and protection of consumers.

5. Part 2 of the Statute provides for the making of schemes. Under s 7(1), an occupational association may prepare a scheme. Under s 7(3), the Council may, on application of an occupational association, approve a scheme prepared under s 7.

6. Section 8 provides for public notification of schemes before they are approved by the Council.

7. Section 9 provides that any person may make a comment or submission to the Council concerning a scheme of which notice has been published under s 8.

8. Section 10 provides as follows:

10 Consideration of comments, submissions and other matters

(1) Before approving a scheme, the Council must consider the following:

(a) all comments and submissions made to it in accordance with section 9,

(b) the position of persons who may be affected by limiting the occupational liability of members of the occupational association concerned,

(c) the nature and level of claims relating to occupational liability made against members of the occupational association concerned,

(d) the risk management strategies of the occupational association concerned,

(e) the means by which those strategies are intended to be implemented,

(f) the cost and availability of insurance against occupational liability for members of the occupational association concerned,

(g) the standards (referred to in section 27) determined by the occupational association concerned in relation to insurance policies.

9. An observation about s 10 is that all the matters to be taken into account in mandatory terms by the Council relate to the liability of persons the subject of a scheme, the management of the risk of liability and insurance against liability. The only matter which does not fall into that category is the matter in s 10(1)(a), namely all comments and submissions made in accordance with s 9.

10. Section 11 contemplates that the Council may conduct public hearings concerning a scheme if the Council thinks it is appropriate.

11. Section 12 provides that the Council may submit a scheme approved by it to the Minister and, under s 13, the Minister may make it a legislative instrument by publication in the NSW Government Gazette.

12. Section 15 provides for challenges to schemes which relevantly is in the following terms:

15 Challenges to schemes

(1) A person who is or is reasonably likely to be affected by a scheme published as referred to in section 13 (including a person who is or is reasonably likely to be affected by a scheme that operates as a scheme of another jurisdiction) may apply to the Supreme Court for an order that the scheme is void for want of compliance with this Act.

(2) The Court may, on the making of the application or at any time before the scheme commences, order that the commencement of the scheme is stayed until further order of the Court.

(3) The Court, in relation to an application, may:

(a) make an order that a scheme is void for want of compliance with this Act, or

(b) decline to make such an order, or

(c) give directions as to the things that are required to be done in order that a scheme, the commencement of which is stayed under this section, may commence, or

(d) make any other order it thinks fit.

(4) The Court may not make an order that an interstate scheme is void for want of compliance with this Act on the ground that the scheme fails to comply with Division 2, but may do so on the ground that the scheme fails to comply with the provisions of the corresponding law of the jurisdiction in which it was prepared that relate to the contents of schemes prepared in that jurisdiction.

(5) This section does not prevent a scheme from being challenged or called into question otherwise than under this section.

(6) In this section, a reference to a scheme includes, in the case of an interstate scheme, a reference to an instrument amending that scheme.

13. The contents of schemes are addressed in Division 2 of Part 2 in which ss 21, 22 and 23 contemplate a limitation on the liability of people the subject of schemes.

14. The real work of the Statute can be found in s 28 which provides as follows:

28 Limit of occupational liability by schemes

(1) To the extent provided by this Act and the provisions of the scheme, a scheme limits the occupational liability, in respect of a cause of action founded on an act or omission occurring during the period when the scheme is in force, of any person to whom the scheme applied at the time when the act or omission occurred.

(2) The applicable limitation of liability is the limitation specified by the scheme as in force at the time at which the act or omission giving rise to the cause of action concerned occurred.

(3) A limitation of liability that, in accordance with this section, applies in respect of an act or omission continues to apply to every cause of action founded on it, irrespective of when the cause arises or proceedings are instituted in respect of it, and even if the scheme has been amended or has, in accordance with section 32, ceased to be in force.

(4) A person to whom a scheme applies cannot choose not to be subject to the scheme, except in accordance with provisions included in the scheme under section 17 (2).

15. The effect of that provision is that a liability which someone might otherwise have to compensate is limited in the circumstances described.

16. Under Part 6 of the Statute, the Council is constituted. Section 39 provides as follows:

39 Constitution of the Council

There is constituted by this Act a body corporate with the corporate name of the Professional Standards Council.

17. The functions of the Council are set out in s 43. Interestingly, none of those functions is described as approving schemes, although given the role of approval given to the Council in Part 2, there can be no doubt that despite the omission from s 43 approval of schemes is a role which the Council plays.

18. There is no controversy between the parties that the Statute is a significant piece of legislation. It is significant for the immediate consumers of services provided by professionals. It is significant for the professionals who provide those services. It is significant for insurers who play a very important and valuable role in our society and it is significant for society more broadly which benefits from the availability of professional services which are provided ethically, professionally and efficiently having regard to cost, quality and the availability of compensation should something go wrong.

The Professional Standards Scheme

19. The particular Scheme relevant to this case is one which applies to accountants. A scheme applying to accountants was first approved in 1997 shortly after the enactment of the Statute. Most recently, the subject Scheme was approved in February 2025 and it operates for a period of five years. The Scheme is in evidence. I do not need to say much about it for current purposes other than to say that it operates to limit the liability of the persons the subject of the Scheme.

20. The evidence shows that approximately 30,000 people currently have the benefit of the Scheme. The benefits of the scheme are set out in a list in paragraph 35 of the Affidavit of Shaun Michael Temby dated 24 June 2026, who is the solicitor acting for the Second Defendant, based on instructions from Vanessa Chapman, General Counsel of the Second Defendant. As itemised in that list, the benefits include the requirement that the accountants hold professional indemnity insurance, the imposition of professional conduct obligations including continuing professional development, promotion of high ethical and professional standards, supervision of members through self-reporting and monitoring activities, a complaints process and disciplinary framework, benefits to insurers from a cap on liability and reduced premiums to members.

21. Another benefit from the Scheme which is not referred to in the Second Defendant’s list is that the Scheme may operate to limit the liability of the persons who are the subject of the Scheme.

22. In relation to the benefits to insurers, paragraph 35(b) of Mr Temby’s Affidavit is in the following terms:

“35. I am informed by Ms Chapman and believe that the matters set out below accurately reflect CA ANZ’s position as to some of the key benefits of the Scheme, CA ANZ’s disciplinary framework and the various activities undertaken by CA ANZ.

…

(b) The Scheme also provides a number of benefits to third parties more generally, including the insurance market because it enables insurers to price policies knowing that liability is subject to statutory caps (subject to the policyholder complying with the relevant requirements), as a result of which, scheme participants can often receive more favourable professional indemnity insurance terms (the benefit of which is capable of being passed on to consumers in the costs of services they provide to their clients).”

23. Points to emphasise about the Scheme are as follows. First, the Scheme can have a direct and significant impact on a consumer’s right to compensation. Secondly, whether that is so in a particular case or class of cases depends upon the terms of the Scheme. Thirdly, the Scheme is prepared by the occupational association relevant to the people who would otherwise be liable to compensate. It is not prepared by an independent body. Fourthly, the Scheme has to be approved. Fifthly, the Council is a body established to approve schemes. Sixthly, the procedure for approval includes public notification, an opportunity to make submissions which is not limited as to who may make those submissions and an obligation on the Council to consider those submissions.

24. In the application before me various submissions were made about the extent to which the operation of the Statute has previously been considered by the Court. There have been a number of cases where the liability of a defendant who is a member of a similar scheme of solicitors has been reduced by virtue of the operation of the Statute which include: Michelangelo Alfredo Mascarello & Anor v Registrar-General of New South Wales [2018] NSWSC 284 at [343]-[346] (Sackar J); GEMI 169 Pty Ltd v Suria Global (L) Pty Ltd; Shamoon v F & L Violi Pty Ltd (No 9) [2025] NSWSC 975 at [482]-[484] (Peden J); CPF Group Pty Ltd v Everest Index International Pty Ltd (Receivers and Managers Appointed) [2026] NSWSC 416 at [260]-[286] (Wright J). In Centaur Litigation Limited (in liq*) v Strong* [2018] FCA 1715 (Farrell J) an issue about pleading the Statute and an accountant’s scheme was decided by the Court. In Council of the City of Broken Hill v Redenbach Group Pty Ltd t/as Redenbach Legal [2026] NSWSC 262 at [311]-[317] (Peden J) the meaning of the terms “occupational liability” and “damages” was considered and in DC Rd DC Pty Ltd v Zhang [2026] FCA 16 at [437]-[443] (Jackman J) the meaning of the terms “damages” and “breach of trust” was considered.

25. However, there is no dispute that the process of approval of schemes has never been considered by the Court nor has the Court ever been asked to consider the validity of a particular scheme.

26. By the Amended Summons, the Plaintiff seeks to challenge the validity of the Scheme of the Second Defendant in relation to which he has specified seven grounds. I am not going to go over them all now. For current purposes, it is sufficient to say that the Plaintiff contends that the approval of the Scheme in February 2025 was other than in compliance with the Statute. The case will require, according to the Plaintiff, consideration of the information before the Council and the manner in which the Council exercised its functions. The Plaintiff contends that the Council failed to consider matters which the Council was required by the Statute to consider. A number of examples have been mentioned in argument. One relates to the Scheme covering what have been referred to as affiliate members in circumstances where they are people who, to put it succinctly, are not accountants. There is also another example relating to information about claims experience that was provided to the Council at the time the Scheme was submitted for approval and whether that information was adequate having regard to the requirements of the matters to be considered by the Council under s 10.

27. I have referred above to s 15 and the express provision for challenges to a scheme being made under that section. The Plaintiff relies on s 15 but also on s 69 of the Supreme Court Act 1970 (NSW). There has been some debate, mostly provoked by me, about whether or not s 15 is capable of applying to the Plaintiff having regard to the words of limitation about who may make an application under that provision (“a person who is or is reasonable likely to be affected by a scheme”). It is not part of this application for me to decide that issue. It will be a matter for determination at the final hearing. What can be said is that there has not been any application by the Defendants to have the question of the Plaintiff’s standing determined as a preliminary question and there has not been any application to have the proceedings dismissed as not having reasonable prospects of success or as being an abuse of process. I do not make a criticism of the Defendants for taking that course but the observation is apposite.

28. The relief sought in the Amended Summons includes:

“1. An order pursuant to section 15 of the Professional Standards Act 1994 (NSW) (the Act) or alternatively, section 69 of the Supreme Court Act 1970 (NSW) that the Professional Standards Scheme approved by the First Respondent on 28 February 2025 (the Scheme), on the application of the second respondent, is void and is set aside or quashed.

2. A declaration that the decision made by the first respondent on 28 February 2025 to approve an application from the second respondent for the Scheme pursuant to section 7(3) of the Act is void and of no effect and/or is set aside.”

29. In addition, the Plaintiff’s Amended Summons seeks:

“7. In the alternative to the costs order, an order pursuant to rule 42.4 of the Uniform Civil Procedure Rules 2005 (NSW) limiting the costs which may be awarded against the Applicant to $5,000.00.”

30. The Plaintiff says that he has no personal pecuniary interest in these proceedings and says in paragraph 10 of his Affidavit dated 21 July 2026 that he brings the proceedings because he believes it is in the public interest. The evidence shows that he has an academic interest in the subject matter of the case. Whilst the Plaintiff used to be an accountant up until about 2020, he has not been an accountant subsequently.

31. There is some evidence about the Plaintiff’s personal circumstances. He has a wife and two infant children. Apart from the unincumbered family home in regional New South Wales, his assets are estimated at approximately $70,000, including savings of $20,000. He works on a part-time basis at the University of Wollongong and is currently a candidate for a PhD. There is some uncertainty about his employment beyond the end of 2026. From his employment at the University, he earns an income which cannot be described as high. Having regard to society more broadly, the Plaintiff's income is average. He is the sole source of income for the family. He has a significant debt but, in circumstances where the debt appears to be unsecured, it would appear to be a private arrangement.

32. In January 2026, the Plaintiff commenced a crowdfunding campaign which has not been well supported in the context of the costs of these proceedings. It has raised about $4,000. The Plaintiff's solicitors and counsel are acting in the proceedings on a contingent basis.

33. I am satisfied that the proceedings are very unlikely to continue if the order sought in the application is not made.

34. In paragraphs 11 and 15 of his Affidavit dated 29 May 2026, the Plaintiff says the following:

“11 Absent a protective costs order, I do not believe I could continue with these proceedings, given the potentially devastating impact of an adverse costs order on me and my young family.

…

15 An adverse cost order in the range of $69,300 to $166,320 would be financially devastating in context of my financial circumstances, need to support my young family and uncertain employment situation.”

35. That evidence was given based on the Plaintiff’s solicitors estimates of the Plaintiff’s potential costs exposure, which estimates are materially lower than the estimates subsequently given by the solicitors acting for the Second Defendant.

36. More recently, in paragraph 7 of his Affidavit dated 21 July 2026, the Plaintiff says:

“7 Having considered the costs estimate in the Temby affidavit, an adverse costs order of that magnitude would be financially ruinous. With two infant children and impaired earning capacity, I am not able to expose myself and my family to a costs risk of that magnitude. If a protective costs order is not made, I will be forced to discontinue these proceedings.”

37. The Plaintiff refers to the Affidavit of Mr Temby dated 24 June 2026 which sets out the costs to date of the Second Defendant, being the party which is active in resisting the Plaintiff’s application, as well as an estimate of the future costs likely to be incurred by the Second Defendant in defending the proceedings up until the conclusion of a final hearing. Mr Temby says at paragraph 28 of his Affidavit that the Second Defendant’s legal fees and disbursements for the proceedings between 16 July 2025 and 22 May 2026 total $114,340.10 excluding GST. At paragraph 29, Mr Temby estimates the Second Defendant’s legal fees and disbursements for the period between 23 May 2026 to 12 June 2026 to be approximately $26,845 to $31,845 excluding GST. Having regard to the costs incurred to date, the rates of counsel and the solicitors working on the matter, the outstanding work to be done in order to prepare the matter for final hearing and the estimated length of time for the final hearing, Mr Temby estimates in paragraph 32 of his Affidavit that the Second Defendant’s total legal fees and disbursements in defending the proceedings are likely to range between $409,005.10 to $463,605.10 excluding GST. These figures can be taken to be no more than a rough estimate noting the general unpredictability of litigation.

38. The Second Defendant is a not-for-profit organisation but the evidence shows that it is well resourced. As at 30 June 2025 the Second Defendant had 142,122 members. There is no suggestion that they are not able to fund the defence of these proceedings. There is no suggestion that the Second Defendant's attitude to defending these proceedings, including the costs incurred to date and to be incurred, would be any different whether the orders sought will be made. In particular, there is nothing to suggest that the Second Defendant would have taken a different approach to the litigation if the application for the order had been made before today.

Legal principles

39. UCPR 42.4(1) provides:

42.4 Power to order maximum costs

(1) The court may by order, of its own motion or on the application of a party, specify the maximum costs that may be recovered by one party from another.

40. The Court has a discretion whether to make an order under UCPR 42.4: Lord v Craig (2026) 119 NSWLR 33; [2026] NSWSC 17 at [208] (Meek J). The Court must undertake an evaluative exercise: Lord v Craig at [209].

41. A number of factors which the Court might take into account in exercising that discretion and making that evaluation have been identified by the Court of Appeal in Delta Electricity v Blue Mountains Conservation Society Inc [2010] NSWCA 263 (Basten and Macfarlan JJA), including the protection of the purpose of open standing (see below), the likely final costs order and the public interest in proceedings (at [197], [198] and [203]). At [191] Basten JA also refers to Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (2009) 170 LGERA 22; [2009] NSWLEC 165 where Preston CJ says the following at [21]:

“Ensuring proportionality of costs does not always have the effect of achieving access to justice. The subject matter of a dispute may be important, complex and of high value. By the criterion of proportionality of costs alone, significant expenditure of legal costs to litigate such a dispute could be justified. Yet the financial resources of one or more of the parties may be insufficient to meet an adverse costs order of such magnitude. The fear of exposure to significant legal costs to which an unsuccessful party may be subjected may deter a party from asserting, or continuing to assert, its rights in litigation.”

42. Meek J sets out a useful and convenient summary of how the Court should exercise its power under r 42.4 in Lord v Craig at [103]-[104] as follows (citations omitted):

“103 Nonetheless in NSW, conceptually and in respect of quantum, it is clear that the exercise of the power:

(1) is of a discretionary kind, both as to the making of the order and the amount of any sum fixed with the two stages being difficult to separate;

(2) involves consideration of the future litigation from the perspective of each of the parties to the litigation or affected parties which needs to be addressed separately, and the likely consequences balanced;

(3) will depend upon the total mix of factors relevant to the discretion and the weight given to such factors;

(4) involves not merely an evaluative judgment, but one which will encompass a range of possibilities, rather than a binary choice;

(5) has no set range and indeed costs may be capped at “nil”, subject to any statutory exceptions; and

(6) is (if UCPR r 42.4 is used) expressly subject to some limits – specifically amounts referable to certain conduct of parties is excluded including amounts that a party has been ordered to pay another party by reason of failures to comply with the rules, amendments, indulgences leading to extensions of time or otherwise caused a party to incur unnecessary costs inconsistent with the just, quick and cheap mandate.

104 Considerations that may be taken into account include (in part by analogy to other cost powers) the extent of costs actually incurred, the circumstances of the time at which they were incurred, whether they were reasonable in those circumstances and what would have been a reasonable amount to have been incurred.”

43. Like the other provisions in the rule, the Court must exercise the discretion having regard to the overriding purpose set out in s 56(1) of the Civil Procedure Act 2005 (NSW) as follows:

56 Overriding purpose

(1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

Consideration

44. As to the public interest element of the litigation, it is evident there is public interest in this litigation. Having regard to the list of benefits identified in paragraph 35 of Mr Temby’s Affidavit, it is clear that the Scheme in this litigation (and other schemes like it involving other occupational associations) potentially affect the provision of services by members of occupational associations in a multifaceted way.

45. The issues raised in this litigation has the potential to have implications beyond the particular scheme which is the subject of the case. Without overstating it, an important matter identified in the Amended Summons is the process by which the Council approves schemes. To some extent this litigation raises a question about the functions and the role of the Council in approving schemes. Between the preparation of a scheme by an occupational association and the Minister notifying the scheme in the Gazette, the only entity which is concerned with the making of the scheme is the Council. The approval of schemes underpins a statutory cap on liability in accordance with s 28 of the Statute. It also underpins the assessing of risks by insurance companies, as well as the maintenance of professional standards.

46. Some of the cases address the question of what is referred to as "open standing". As identified above, open standing has been said to be a material consideration when considering an application for an order like that sought by the Plaintiff today. The reasons why it is material is that where there is open standing, it demonstrates a policy of access to the Court in relation to the subject matter of the Statute which may be promoted by an order capping the liability of a plaintiff, which might thereby remove a financial disincentive to access being realised.

47. The Professional Standards Statute does not provide for open standing. Section 15 addresses challenges, but it is not available to everybody, only to “a person who is or is reasonably likely to be affected by a scheme". A challenger need not be affected but he or she must be reasonably likely to be affected. The Statute does not explain what is meant by “affected”, but in the context of s 15 there would be a reasonable argument that it means adversely affected. That is because affectation is the gateway to challenge a scheme.

48. I am not construing s 15 nor making a final decision today, but for current purposes it is important to note that the Statute does not provide for open standing. However, there is some indication in the Statute of public interest in the validity of schemes, particularly by reference to the process of approval which I have described above, and the obligation on the Council to consider submissions. The provision for challenging schemes under s 15(1) can be seen as not exclusive. If there is some other mechanism for challenging schemes, s 15(5) contemplates that a scheme may be challenged by someone who is not affected or reasonably likely to be affected by the scheme.

49. The Statute does not demonstrate a policy of access to the Court to challenge a scheme in the same way as a statute which provides for open standing, such as some environmental legislation. It does however recognise that the Court may have a role in a challenge to a scheme which has been prepared by an occupational association and approved by the Council.

50. Another matter which is sometimes referred to as relevant to an application like this is the significance of the case, which is in some ways similar to the question of a public interest but is in other ways different. There is no doubt that this is a significant case. Counsel for the Second Defendant described it as "important" and with respect I agree. The Professional Standards Scheme is an important part of the legal landscape in New South Wales. I do not think that an interest in that part of the legal landscape is accurately described as esoteric.

51. Another relevant consideration is the merits of the case and whether it is likely to succeed. It is not possible on an application like this for the Court to form a view about prospects nor is it appropriate. Some of the authorities which address this issue refer to the question about whether the claim is arguable.

52. I am satisfied that the claims are arguable in this case. I have not read all the evidence that the Plaintiff hopes to put before the Court at a final hearing because not all of it was adduced into evidence on this application nor am I forming or expressing a view on prospects but, having regard to the grounds, the Plaintiff’s case is arguable. I have already observed that there has not been any application to have the case summarily dismissed, whether for want of reasonable costs or as an abuse of process. I am satisfied on the Affidavits from the Plaintiff that the case is brought bona fide and I have observed that the lawyers acting for the Plaintiff are acting on the basis that they will not get paid if the Plaintiff does not win.

53. In that respect, this is not a case where there is a claim for damages. There will not be a pecuniary recovery.

54. If the matter proceeds, consideration needs to be given to the likely costs order that will be made. Counsel for the Second Defendant submits that the starting point is that costs usually follow the event as specified in UCPR 42.2. There is some disagreement about that but, with respect, I agree with counsel for the Second Defendant in the sense that, were an order to be made under UCPR 42.4, there would be a departure from the usual position.

55. However, UCPR 42.4 does contemplate that there will be cases where there is an exception, and indeed even apart from UCPR 42.4, UCPR 42.2 provides that costs will follow the event unless the Court otherwise orders. The significance of that in this case is that even if the order were not to be made today and the case were to proceed, there would be an argument, best informed by the outcome of the case, the more detailed focus on the issues and the evidence, and ultimately the merits at the final hearing, that there ought not be costs awarded against the Plaintiff in any event having regard to the public interest aspect of the case. I approach the application on the assumption that that is unlikely having regard to the usual position and the principle behind the usual position being not to punish the unsuccessful party but to compensate the successful party.

56. It is submitted that the order which is sought today will only be material in the future if the Plaintiff fails and would, but for the order, be ordered to pay the Defendants’ costs. In other words, the order will only have work to do after the Plaintiff’s case is shown to be without merit and has been dismissed. The position is more nuanced than that. If the order is not made and the litigation is abandoned then the materiality of not making the order operates immediately on this application.

57. The evidence is that the Second Defendant is likely to incur costs of about $400,000 as outlined above. The Plaintiff submits that the Second Defendant’s costs estimate is excessive. I am not sure that that is right given the importance of the issue, and I would not make an order limiting the costs which might be ordered against the Plaintiff for reasons of disproportionality. But the fact that the Second Defendant estimates it will incur costs of that magnitude underscores the importance of the issues raised by the case, and as I have found, the magnitude of the Second Defendant's likely costs will be prohibitive unless the order is made today which the Plaintiff seeks.

58. I do not think the order will encourage the Plaintiff to run the case inefficiently. The Plaintiff has already put on its evidence. He will still be subject to his obligations under s 56(3) of the Civil Procedure Act 2005. His lawyers are not getting paid for their time. I do not consider that the risk of encouraging inefficient litigation is significant in this case.

59. The Second Defendant's Written Submissions address the question of the delay in the application being made, although nothing was said about it orally. I do not consider delay to be a significant issue in this case. It was foreshadowed in the Amended Summons and, in theory, the order could actually be made at the end of the case. The Second Defendant submits that to foreshadow is one thing but actually to apply is another and they are right to make that submission. However, there is no suggestion that the Defendants would have done anything differently had the order been applied for earlier and made, and having regard to the importance of the issues in the case it is hard to conceive that they would have. They are not prejudiced by any delay.

60. In terms of the complexity of the issues, the principle ought not be confused. The fact that a simple case may be an appropriate case for making an order limiting the cost does not mean that a complex case is not a case where that order ought to be made. I do not have sufficient insight into the way the Plaintiff is going to put the case to be able to form too much of an assessment as to the complexity that is likely to arise. The Plaintiff says it is simple and the Defendants say it is complex. They both agree that a final hearing of these proceedings will take about two days. Given the importance of the Scheme, I think both sides are to be commended for that estimate. I do not consider there is a complexity issue in the case which weighs against making a protective costs order.

61. I have considered carefully the position of the Second Defendant who stands to be prejudiced by the order. I assume that the costs spent defending the case will be passed by the Second Defendant onto its membership. The membership is large which means the expense will be diluted. However, I do not think that is a reason to ignore the position of the Second Defendant. All the members are entitled, in the ordinary course, to be compensated for cost that has been incurred by the Second Defendant in defending litigation and I am conscious that the order I will make will prejudice them. It is a consideration which I have taken into account.

62. However, to some extent there may be a benefit to the members of the Second Defendant in having this issue addressed now that the issue has been raised by the Plaintiff. I do not want to overstate that and I certainly accept the submissions made by the Second Defendant in relation to that. But having regard to the role that a valid scheme has in relation to the insurance market as explained in paragraph 35(b) of Mr Temby’s Affidavit and having regard to the fact that the insurers never deal with certainties but only risks, the prejudice to the members of the Second Defendant in relation to having to defend these proceedings without the prospect of a costs order is tempered by the fact that the continuation of the proceedings will produce finality on a question which would otherwise be asked but not answered.

63. In Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd, Preston CJ said at [36]:

“These factors may, in appropriate cases, provide guidance but they should not be elevated to become fixed criteria governing the exercise of the discretionary power to make a maximum costs order. All of the factors will not be relevant in all of the cases. Some factors may take on different importance depending on the circumstances. For example, the complexity or simplicity of the factual or legal issues may take on different significance depending on the nature and subject matter of the proceedings and the aspect of access to justice that is relevant, such as achieving proportionality of costs or alleviating the deterrent effect of the fear of an adverse costs order. Some of the factors have the potential for misdirecting the court from considering the critical issue of access to justice. Examples are whether there is any private interest in the proceedings or whether the plaintiff’s counsel is acting pro bono. In the end, the critical question for the court is whether or not making a maximum costs order facilitates or impedes access to justice in the particular case.”

64. The critical issue is access to justice and the critical question for the Court is whether the making of the order will facilitate or impede access to justice in the particular case. As I said at the outset, it is the question of discretion and requires an evaluation.

65. I regard it as a bona fide claim in which the lawyers acting for the Plaintiff are acting on a contingent basis. The Plaintiff has no private interest. I consider that there is a public interest in the process by which the Council approves schemes and to some extent the litigation will contribute to a proper understanding of that process under the Statute in circumstances where the Court has never considered it previously. There is no dispute that the issue in the case is significant, or to use the Second Defendant’s word, "important".

66. I have reached the view that it is undesirable for the case to be abandoned in all the circumstances and an order limiting the costs against the Plaintiff is necessary for the resolution of the issues in the case other than by having the case abandoned. I have had regard to the position of the Defendants and the members of the Second Defendant, but on balance the view I have reached is that the order sought would be fair and just.

67. The Plaintiff seeks a costs cap of $5,000. I do not think that is the right limit. It is not appropriate for the Plaintiff to be free of all costs concerned. The risk of costs may provide a safeguard against extravagance and it promotes a sensible approach to the conduct of the litigation harmoniously with the requirements of s 56(3).

68. I consider the appropriate figure to be $25,000. The reason for that is that, first, the Plaintiff has that cash, and secondly, there has been some money generated from the crowdfunding.

Orders

69. The orders of the Court are as follows:

70. An order pursuant to UCPR 42.4(1) limiting the costs which may be awarded against the applicant to $25,000.

71. Costs reserved.

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