Malovini v Abdishou (No 2)

Before: Bennett J

Decision: (1) Set aside order 2 made on 3 October 2025.
(2) The respondents are to pay the costs of the applicant on the Notice of Motion filed on 17 June 2025 by the first defendant, including the costs associated with the final determination of costs, on the ordinary basis, as assessed or agreed, forthwith.

Catchwords: COSTS — Party/Party — Costs orders in interlocutory proceedings — Whether costs should be in the cause or successful applicant should get her costs — No issue of principle
COSTS — Party/Party — Bases of quantification — Whether applicant in motion should have costs on the ordinary or indemnity basis — No issue of principle
COSTS — Party/Party — Whether gross sum costs order should be made — No issue of principle
COSTS — Party/Party — Whether costs of interlocutory application should be ordered payable forthwith — No issue of principle

Legislation Cited: Civil Procedure Act 2005 (NSW), s 98(4)(c)
Uniform Civil Procedure Rules 2005 (NSW) r 42.1

Cases Cited: Baychek v Baychek [2010] NSWSC 987
Gabrielle v Abood (No 4) [2023] NSWCA 100
Hamod v State of New South Wales [2011] NSWCA 375
His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc (No 2) [2007] NSWCA 142
In the matter of Arada Australia Pty Ltd (No 2) [2025] NSWSC 1293
In the matter of Mosman & Co Pty Limited [2020] NSWSC 1245
In the matter of Sunny International Hardware Group Pty Ltd [2025] NSWSC 348
In the matter of Yowi Group Ltd (No 2) [2025] NSWSC 605
Keane v Keane [2025] NSWSC 1298
Malovini v Abdishou [2025] NSWSC 1157
Morton v Williams [2017] NSWSC 1506
Muscat v Qin (No 2) [2024] NSWSC 391
Pirovic v Barbieri [2021] NSWSC 1460
Rahman v Rahman (No 2) [2025] NSWCA 266
Rema Tip Top Asia Pacific Pty Ltd v Grüterich (No 2) [2018] NSWSC 899
Skytraders Pty Ltd v Meyer [2023] NSWSC 857
State of New South Wales v Gevaux [2011] NSWSC 758
The Owners – Strata Plan 93105 v Richard Crookes Constructions Pty Ltd [2025] NSWSC 935
Wang v Cai (No 2) [2021] NSWSC 1268

Category: Costs

Parties: Marcos Malvovini (Plaintiff)
Chantel Abdishou (First Defendant/Applicant on the Notice of Motion)
G8 Clyde Pty Ltd (Second Defendant)
Edgar Marcelo Robalino Rojas (First Respondent on the Notice of Motion)
Allsworth Lawyers Pty Ltd (Second Respondent on the Notice of Motion)

Representation: Counsel:
J Mack (First Defendant/Applicant)
Solicitors:
Weinberger Lawyers (First Defendant/Applicant)
Wotton Kearney (Respondents)

File Number(s): 2024/00288388

Publication restriction: Nil

JUDGMENT

Procedural background

1. On 3 October 2025, I delivered judgment on an application by Ms Chantel Abdishou to restrain Mr Edgar Marcelo Robalino Rojas and the law firm which he is the principal solicitor of, Allsworth Lawyers Pty Ltd, from acting as the legal representatives for the plaintiff in these proceedings: Malovini v Abdishou [2025] NSWSC 1157 (Primary Judgment). These reasons assume familiarity with and maintain the same abbreviations used in the Primary Judgment. The applicant was wholly successful in her application and I made the order restraining the respondents from acting in these proceedings as sought. On the issue of costs, I made the following orders:

“2. Subject to order (3), the costs of the Notice of Motion filed 17 June 2025 be costs in the cause.

3. Within 7 days of the publication of this judgment, the parties may make an application by email to my Associate to vary order (2). Further orders will be made for the filing and serving of submissions by the parties in relation to any such application.

4. Any further issue as to costs will be determined on the papers.”

2. Pursuant to order 3, the applicant made an application by email to my Chambers to vary order 2 made on 3 October 2025, being the costs order I had made. A timetable for the filing and serving of submissions and evidence on the issue of costs was set.

3. The applicant provided written submissions in chief dated 24 October 2025 and written submissions in reply dated 1 December 2025 (AS and AS-Reply, respectively), together with an affidavit of Nathan Weinberger affirmed 24 October 2025 (Weinberger affidavit) (and Exhibit NW4X) and an affidavit of Nathan Weinberger affirmed 1 December 2025 (and Exhibit NW5X). The latter affidavit only attached correspondence relating to a short extension the Court granted in relation to the timetable for submissions and evidence for this costs dispute. The respondents provided written submissions dated 21 November 2025 (RS) together with an affidavit of Edgar Marcelo Robalino Rojas sworn 21 November 2025 (Rojas affidavit) (and Exhibit MR-4).

4. In relation to the evidence of the respondents, the applicant objected to the evidence given in the Rojas affidavit at [17]-[18] (AS-Reply [6(h)]), which was under the heading “The Applicant Caused Prejudicial Delay and Failed to Provide Particulars”. I have not made any ruling in relation to that evidence, however, I record that I have not given that evidence weight in determining any of the issues before the Court.

5. Having regard to the submissions made by the parties, and the further evidence filed in support of their respective cases, I have determined that the appropriate order is for the respondents to pay the applicant’s costs of the Motion on the ordinary basis, forthwith. My reasons for this determination are set out below.

Issues to be determined

6. The costs orders propounded by the applicant, at AS [10], were as follows:

“(a) Mr Rojas and Allsworth are to pay the costs of the applicant the Motion (including the application for costs) (Applicant’s Costs) on an:

(i) an indemnity basis,

(ii) alternatively, on the ordinary basis;

(b) an order pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW) that the applicant is entitled to a specific gross sum in respect of the Applicant’s Costs of the proceedings in an amount of:

(i) $114,531.35 (being $104,119.41 plus GST) on the indemnity basis or such other amount as this Honourable Court deems appropriate; and

(ii) alternatively, $93,160.05 (being $84,690.95 plus GST) on the ordinary basis.

(c) For the avoidance of doubt, an order the Applicant’s Costs to be payable forthwith by the respondents.”

7. For their part, the respondents submitted at the conclusion of RS that the Court should decline to make the costs orders sought by the applicant and the applicant’s costs of the Motion should remain the applicant’s costs in the cause.

8. Given the respective position of the parties, the issues before the Court are:

9. Should the “costs in the cause” order be set aside and substituted with an order that the respondents pay the costs of the applicant?

10. If the respondents are to pay the costs of the applicant, should those costs be payable on the ordinary or indemnity basis?

11. Should the Court make a gross sum costs order?

12. If the respondents are to pay the costs of the applicant, should those costs be payable forthwith?

Issue 1: Should the “costs in the cause” order be set aside?

Legal principles – Costs of interlocutory proceedings

9. The legal principles to be applied when considering the issue of costs in interlocutory proceedings were set out by the Court of Appeal (Beazley, Giles, and Hodgson JJA) in His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc (No 2) [2007] NSWCA 142 (Metropolitan Petar) at [16]-[28]:

“Principles governing costs of interlocutory proceedings

[16] The general rule as to costs is that costs follow the event unless it appears to the court that some other order ought to be made as to the whole or part of the costs: see r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) (the UCPR). Rule 42.7 deals with interlocutory applications. It provides that unless the court otherwise orders:

‘The costs of any application or other step in any proceedings … are to be paid and otherwise dealt with in the same way as the general costs of the proceedings.’

[17] The Association contends that in the case of an application for an interlocutory injunction, the Court will exercise its discretion and order that costs be ‘costs in the cause’. The Association described this as the ‘usual rule’ as to costs on such an application.

[18] An order that the costs be ‘costs in the cause’ or ‘costs in the proceedings’ (the terms are interchangeable) means that the costs of the interlocutory proceedings correspond with the final order for costs in the action. Thus if, in the final proceedings, the plaintiff is successful and an order for costs of the final hearing is made in the plaintiff’s favour, the plaintiff gets the costs of the interlocutory proceedings as part of the costs of the action against the defendant, regardless of who was successful on the interlocutory application: see J T Stratford Ltd v Lindley [1969] 1 WLR 1547 at 1553 per Lord Denning MR.

[19] In Stratford v Lindley, Lord Denning observed that the House of Lords had made an order on an interlocutory application that costs be ‘costs in the cause’. His Lordship observed that the case was ‘finely balanced’ and that, on final hearing, a slight turn in the evidence might have made all the difference to the outcome. He considered (at 1554) that in those circumstances, the House ‘thought it right to make the costs of the interlocutory proceedings depend on who won or lost in the main action’. In that case, however, the matter settled prior to trial, and the question for the Court of Appeal’s consideration was what order should be made in respect of the interlocutory application when the matter had not proceeded to finality. That matter is not in issue here. However, his Lordship’s remarks indicate a circumstance in which it is appropriate to make an order of the kind which is sought by the Association in respect of the costs at first instance.

[20] In Boscolo v TCN Channel Nine Pty Limited (No 2) (New South Wales Supreme Court, Eq Div, 28 April 1994, unreported) Young J (as his Honour then was) dealt with costs in relation to an application for an interlocutory injunction. The application had been commenced ex parte but during the course of the ex parte hearing, legal representatives for the defendants arrived at Court and sought to be heard. His Honour permitted that course so that the matter became a contested application for an interlocutory injunction. In respect of costs, his Honour said:

‘Although costs are always in the discretion of the court, the usual rule that is applied in the exercise of the court’s discretion is that if a person succeeds in getting an interlocutory injunction costs should be costs in the cause …’

[21] His Honour did not explain the basis of the rule. That is not of itself unexpected, as practices grow up within particular jurisdictions which routinely deal with a particular type of application. The rationale for making an order that costs be costs in the cause is that, at the stage of granting an interlocutory injunction, the court is not in a position to adjudicate on the ultimate outcome of the proceedings. Rather, provided there is a reasonable case to be tried, the Court’s focus in deciding whether to grant the application for interlocutory relief is on other considerations and, in particular, on determining whether, on the balance of convenience, an injunction ought to be granted. Accordingly, if a plaintiff who applies for an interlocutory injunction is not ultimately successful in the proceedings, that plaintiff should not receive the costs of the application for an injunction which, when the matter is considered in overview cannot be sustained. However, as already explained, each case must depend upon its own facts.

[22] Metropolitan Petar submits that the ‘usual practice’ referred to in Boscolo and upon which the first respondents rely does not represent the entirety of the jurisprudence in this area, and that in accordance with both principle and practice of the courts at first instance the order that ought to be made is that the costs of the hearing of the Notice of Motion at first instance should be their costs in the cause. An order that costs be a party’s costs in the cause or the proceedings, for example, a plaintiff’s costs in the proceedings, means that if that party succeeds on the final hearing, then that party is awarded the costs of the interlocutory proceedings: Stratford v Lindley at 1153, but if that party loses on the final hearing, it will not be liable to pay the costs of the other party on the interlocutory hearing.

[23] In Devereaux Holdings Pty Limited v Pelsart Resources NL (No 2) (Supreme Court of New South Wales Eq Div, 24 July 1985, unreported), an earlier decision of Young J, his Honour was concerned with the question as to the costs order that should be made when an interlocutory injunction is granted but the proceedings are dismissed on final hearing. His Honour observed (at 2) that there were not any definitive rules governing that circumstance, but that the following seemed to be ‘what commonly happens’. Relevantly for present purposes, his Honour stated:

‘(a) If the material before the Judge on the interlocutory hearing discloses that there is an arguable or prima facie case and it is more or less conceded in argument that such is the case so that an interlocutory injunction is granted, then costs of the interlocutory injunction are costs in the cause, though sometimes they may be made plaintiff’s costs in the cause; (b) If in the situation set out in (a), the defendant does not concede the inevitability of an interlocutory injunction being granted, then the proper order is that the plaintiff’s costs be his costs in the cause, or even that the defendant pay the plaintiff’s costs in any event …’ (Emphasis added)

[24] Young J, in determining what costs order should be made in the matter before him, stated:

‘… I think it follows from what I have said above that the defendant being successful in the action, it should not have to pay any of the plaintiff’s costs. This is because unless there was some extraordinary factor, the appropriate order on the interlocutory motion would have been either that the costs would have been costs in the cause, or alternatively, plaintiff’s costs in the cause.’

[25] In Ausino International Pty Limited v Apex Sports Pty Limited [2006] NSWSC 1119 Campbell J (as his Honour then was) stated:

‘[55] … the present proceedings before me are brought on the basis that they are an interlocutory process. The usual order which is made as to costs concerning interlocutory processes, is that if the plaintiff is the applicant, and succeeds, then the costs of the interlocutory process become the plaintiff’s costs in the cause, while, if the plaintiff is the applicant, and loses, the usual order is that the plaintiff pay the defendant’s costs of that application.

[56] The rationale for that arises from the way that interlocutory proceedings are intended to advance the final hearing. If a plaintiff has a victory on the way to a final hearing, whether that victory is ultimately one which is fruitful will depend upon whether the plaintiff succeeds in the final hearing. However, if the plaintiff brings an interlocutory application and loses, then that interlocutory hearing is one which will, irretrievably, have cost the defendant money, and the justice of the situation is that the defendant should be indemnified for those costs, regardless of the outcome of the proceedings.’ (Emphasis added)

[26] It is unclear from the decision in Ausino International whether there has been some mutation in the ‘usual order’ over the last decade, or whether in Ausino International Campbell J’s comments were reflecting the matters to which Young J adverted in Deveraux Holdings. This in itself may reflect a trend of greater contestability of issues once a dispute engages the court process. However, it seems to me there is force in Young J’s analysis of the circumstances which justify the making of one order rather than another on an interlocutory application. It should be noted that Campbell J consistently applied that rule in the Equity Division of the Supreme Court: see Russ Australia v Benny [2006] NSWSC 1118; Glen Eight v Home Building [2005] NSWSC 907; see also the decisions of Hamilton J: Scholten v Mobilesoft Pty Ltd [1999] NSWSC 234; Ingersoll-Rand (Aust) Ltd v Industrial Rollformers Pty Ltd [2000] NSWSC 178.

[27] Applications for interlocutory injunctions are commonplace. If there is nothing to distinguish an application from the typical case that comes before the court, then the underlying jurisprudence relating to the exercise of the discretion may warrant the making of what is referred to in the legal vernacular as the “usual order”, whether that be costs in the cause or the plaintiff’s costs in the cause. The making of such an order does not displace the exercise of the court’s discretion. Rather, it is a shorthand form of giving effect to the principles that govern the court’s discretion in circumstances where there are no countervailing or different circumstances to warrant the exercise of the discretion in a different manner.

[28] We have already referred to r 42.7 of the UCPR, which is the rule that applies to costs on an interlocutory application unless some other order is made. We have also referred to the fact that if some other order is to be made, that order is made in the exercise of the court’s discretion. That discretion cannot be fettered. For the reasons we have given, the making of an order in accordance with a ‘usual rule’ does not, however, involve any fettering of discretion provided a court applies the rule in the exercise of its discretion, and not as a matter of course. It is not necessary, however, that a court explain its reasons for applying the usual rule in every case. The favourable exercise of the court’s discretion in ordering the costs to be costs in the cause, or plaintiff’s costs in the case, if otherwise unexplained, should be taken to reflect the fact that there is already an established jurisprudence as to the basis upon which the court’s discretion should be exercised in a given circumstance.”

10. The principles set out in M**etropolitan Petar were cited in State of New South Wales v Gevaux [2011] NSWSC 758 at [13]-[14] (Ward J), Rema Tip Top Asia Pacific Pty Ltd v Grüterich (No 2) [2018] NSWSC 899 at [8] (Robb J), Wang v Cai (No 2) [2021] NSWSC 1268 (Wang) at [62] (Ward CJ in Eq), and Skytraders Pty Ltd v Meyer [2023] NSWSC 857 at [2] (Richmond J).

Submissions

Applicant

11. The applicant contends that order 2, being an order for costs in the cause, ought to be set aside and in lieu thereof, it be ordered that the respondents pay the costs of the applicant, either on the ordinary or indemnity basis.

12. The primary contention of the applicant is that the circumstances of this matter are different from the “inter-partes” injunctions contemplated by cases such as Wang*.* She submitted the following in writing at AS [3], [7], [9]:

“[3] … The fundamental difference in this case, is that the injunction (a restraint against a solicitor) operates upon a non-party and as such the principles identified at J[89] by reference to Wang are not as relevant as they would be in a normal injunction application where either the restrained or restraining party will be vindicated at final hearing.

…

[7] Importantly, Mr Rojas/Allsworth Lawyers, were respondents on the Motion but are not party to the proceedings. This is an unusual feature of the costs application which sets it apart from the more routine application of the principles. The plaintiff, Mr Malovini, took no part in the Motion and it was contested only by Mr Rojas/Allsworth Lawyers who were separately represented.

…

[9] … Here, the restrained parties (Mr Rojas/Allsworth) are the only parties who sought to contest the Motion. The party to the litigation, Mr Malovini, took no part in the Motion (as above he did not appear at the hearing). As such, costs of the Motion should follow the event with the event being the success of Ms Abdishou (the applicant on the motion) in obtaining relief against the Mr Rojas/Allsworth.”

13. Having raised the issue that the respondents to the Motion are not parties to the substantive proceedings, the applicant raises associated issues which are said by her to go against the appropriateness of a “costs in the cause” costs order:

14. If the plaintiff in the substantive proceedings loses, a “costs in the cause” order will mean he will possibly be “saddle[d] with” the respondents’ costs of opposing the Motion (AS [4]).

15. If the plaintiff wins, there is no reason in principle as to why the plaintiff should be paid the costs incurred by the respondents on the Motion (AS [5]).

16. As the plaintiff is not a party to the Motion, he will not have been heard on the issue of costs, and so it is inappropriate for the Court to make an order that may impact his position (as the applicant contends a “costs in the cause order” would do so) (AS [6]).

Respondents

14. For their part, the respondents contended that the Court ought not depart from the current “costs in the cause” order, relying on the following factors:

15. The respondents were acting in accordance with the plaintiff’s instructions to oppose the Motion (RS [9.1]), noting that legal professional privilege prevents the respondents from saying more than that they acted on instructions, though the respondents submit the Court can infer that it was the plaintiff’s desire for the respondents to continue acting for him in these proceedings (RS [9.3]).

16. If the plaintiff is ultimately successful, the costs in the Motion will not form a part of any costs order made in favour of the plaintiff as the order for costs is in favour of the applicant in the cause (RS [9.2]).

17. The costs in the cause order fairly reflects the plaintiff’s interest in the outcome of the Motion, in that the Motion determined whether the plaintiff could continue to instruct the respondents or would be required to engage new lawyers (RS [9.4]).

18. If the applicant is successful in the proceedings, the costs order made in favour of the applicant would not entitle the respondents to seek their costs of the Motion from the plaintiff. To the extent that the plaintiff has paid the respondents’ costs of the Motion, that is not relevant to the Court’s exercise of discretion on costs (RS [9.5]).

Applicant – in Reply

15. In reply, the applicant referred to the submission of the respondents that the first defendant was acting on the instruction of the plaintiff, but notes, amongst other things, that solicitors are expected to independently form their own views as to their instructions, given the relevant professional conduct rules require them to not be “mere mouthpieces” of their clients (AS-Reply [6(b)]). The applicant also submitted at AS-Reply [6(c)-(g)] that in the circumstances, it was incumbent upon the respondents to get timely professional and independent advice relating to whether they should continue to act, especially as, according to the applicant, any instructions from the plaintiff to oppose the Motion would not have been made with a true understanding of the confidential information in issue (by reason of confidentiality undertakings between the applicant and respondents). The applicant submitted that the evidence in the Rojas affidavit at [10] which suggests advice from counsel was obtained by Mr Rojas should be viewed with circumspection, given the Court has no information as to what the advice was.

Consideration

16. I accept the applicant’s submission that the appropriate order is an order for the respondents to pay the applicant’s costs of the Motion, and accordingly, I will order that the “costs in the cause” order be set aside.

17. I accept that the circumstances of this case can be distinguished from the majority of cases concerning interlocutory applications where “costs in the cause” orders were considered appropriate. In interlocutory applications where “costs in the cause” orders are appropriate, typically, the parties to the interlocutory proceedings are the same parties to the substantive proceedings.

18. Here, the respondents would not be participating whatsoever in the final hearing between the plaintiff and the applicant (and the other defendant). I accept that, as a consequence, a costs order for the Motion ought to finally determine the costs consequences of the respondents’ unsuccessful opposition here and now (AS [28]-[32]). The applicant relied on Uniform Civil Procedure Rules 2005 (NSW) r 42.1. Without wading for the moment into any debate about the general application of r 42.1 to interlocutory proceedings and whether there is in truth a “usual order” for costs in proceedings of this type as I suggested there was in the Primary Judgment at [90] (see In the matter of Arada Australia Pty Ltd (No 2) [2025] NSWSC 1293 (Brereton J)), it suffices to accept the applicant’s submission that as between the respondents and the applicants in this particular application, there will be “no further vindication of rights” as between the applicants and respondents, and there is no “cause” between the respondents and the applicant (AS [31], AS-Reply [7]). This is, in my opinion, decisive. Accordingly, costs ought to follow the event.

19. I am not sure that the applicant’s submissions at AS [4]-[6] ought to be accepted as accurately describing what a “costs in the cause” order in the Motion might entail for the plaintiff. I think there is force in the respondents’ submission at RS [9.5] that if the applicant did ultimately succeed in the proceedings, this would not necessarily mean the respondents could then seek their costs from the plaintiff. Similarly, if the plaintiff succeeds in the main proceedings, it is not clear he would be “reimbursed” for costs incurred by the respondents on the Motion, at least in the absence of evidence that the respondents billed the plaintiff for work on the Motion (as was acknowledged at AS [5]). However, if anything, the fact a “costs in the cause” order would potentially cause confusion or complication in the operation of any subsequent costs orders in relation to the proceedings as a whole is an additional factor that militates in favour of the applicant simply having costs ordered in her favour.

20. I also accept the applicant’s submissions that while the plaintiff may have instructed the respondents to oppose the Motion, the respondents also had their own ethical obligations to consider, and those instructions were made on incomplete information given the confidentiality undertakings between the parties, such that the plaintiff ought not be visited with any cost consequences referable to the Motion.

Issue 2: Ordinary or indemnity costs

Legal principles – Indemnity costs

21. The legal principles to be applied when considering whether to make an order for costs on an indemnity basis were recently summarised in Muscat v Qin (No 2) [2024] NSWSC 391 by McGrath J at [25], which I referred to at [91] of the Primary Judgment and will reproduce here for convenience:

“Indemnity costs

[25] A summary of the relevant principles relating to the discretion to award costs on an indemnity basis can be found in Cappello v HomeBuilding Pty Ltd [2023] NSWCA 109, a recent decision of the Court of Appeal of this court, in which Mitchelmore JA (with whom Simpson AJA and Meagher JA agreed) at [46]–[48] stated:

46 The Court has a discretion to award costs on an ordinary or indemnity basis. Usually costs will follow the event, unless the Court considers that some other order ought to be made: Civil Procedure Act 2005 (NSW), s 98; Uniform Civil Procedure Rules 2005 (NSW), r 42.1; Collier v Country Women’s Association of New South Wales [2018] NSWCA 36 at [116] (“Collier”).

47 For an order of indemnity costs to be made, the conduct of the party against whom such costs are sought must usually exhibit some special or unusual feature: Collier at [117]. The focus is on the way the litigation was conducted: Mead v Watson [2005] NSWCA 133 at [8]-[9]. For example, the discretion may be enlivened where a party persists in what should have been seen to be a hopeless case, such as where the case was unduly prolonged by groundless contentions: Ferella at [36]; Liverpool City Council v Estephan (Executor and Administrator of the Estate of the late Jocelyn Estephan and Ors) [2009] NSWCA 161 at [93] (“Liverpool City Council”). It has also been said that indemnity costs may be awarded where the unsuccessful party’s conduct was unreasonable or delinquent: Amirbeaggi v Matrix Group Co Pty Ltd [2021] NSWCA 21 at [18].

48 The categories of circumstances in which the discretion may be exercised are not closed: Liverpool City Council at [93]. Ultimately, the question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on the ordinary basis: Liverpool City Council at [93].”

22. More recently, in In the matter of Sunny International Hardware Group Pty Ltd [2025] NSWSC 348, Black J stated at [8]:

“… The applicable principles are well-established. Section 98(1)(c) of the Civil Procedure Act 2005 (NSW) permits the Court to order costs on an ordinary or an indemnity basis. Rule 42.2 of the Uniform Civil Procedure Rules provides that, unless the Court orders otherwise or the rules otherwise provide, costs payable are to be assessed on an ordinary basis. Rule 42.5 deals with an order for costs on an indemnity basis. Costs are awarded on an ordinary basis unless there are exceptional circumstances: Leichhardt Municipal Council v Green [2004] NSWCA 341. An order for indemnity costs is not made to punish an unsuccessful plaintiff for persisting with a case that fails, but to compensate a successful defendant fully for costs incurred, when the Court takes the view that it was unreasonable for the plaintiff to have subjected that party to the expenditure of costs: Hamod v New South Wales (2002) 188 ALR 659; [2002] FCAFC 97 at [20]. Whether an indemnity costs order should be made depends, at least in part, on whether there was a relevant delinquency on the part of the unsuccessful party: Oshlack v Richmond River Council (1998) 193 CLR 72 at 89; [1998] HCA 11. In Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (No 7) (2008) 65 ACSR 324; [2008] NSWSC 199, McDougall J observed (at [24]) that there must usually be some special or unusual feature to justify departure from the ordinary rule as to costs, and that delinquency is not necessary for an order for indemnity costs, but is relevant to whether it should be made. The relevant principles were also considered by the Court of Appeal in Cabport Pty Ltd v Marinchek (No 2) [2013] NSWCA 131 at [6], where the Court observed that an order for indemnity costs may be made where a party’s conduct in proceedings is plainly unreasonable or involves an element of delinquency.”

Submissions

Applicant

23. In her submissions, the applicant set out the background to the Motion in considerable detail, including the correspondence between the parties, and relied on evidence included in the Weinberger affidavit. I do not propose to recount the detail of the background, however note that more generally the applicant relied on the findings of the Court in the Primary Judgment (AS [22]-[27]).

24. In making submissions in relation to indemnity costs, having regard to the relevant legal principles, the applicant relied on the submission that there were “special or unusual features” which make an indemnity costs order appropriate, which include:

25. the conduct of the first respondent preceding the applicant filing the Motion, as described in AS [13]-[21] and [22]-[27];

26. that the respondents never sought the consent of the applicant to act in the first place;

27. that the respondents failed to respond to the applicant’s objections to the respondents acting for the plaintiff;

28. that the respondents failed to respond to the applicant’s request for documents;

29. that the respondents refused to cease to act for the plaintiff on belatedly stated grounds (the respondents only conceded they even possessed confidential information in their written submissions on the Motion, but still suggested that information was “not relevant” to the substantive proceedings); and

30. that it could not reasonably be said that “an assessment of the general credibility of the applicant is irrelevant” as the respondents contended, which was an opinion I expressed in the Primary Judgment at [40] (AS [36]).

Respondents

25. The respondents submit that their conduct in opposing the Motion does not warrant the ordering of indemnity costs, as their conduct was not “delinquent” or “unreasonable” as set out in Capello, in circumstances where:

26. the respondents were at all times acting on instructions from the plaintiff;

27. the applicant could have brought the Motion sooner;

28. the respondents held a reasonable belief the documents the subject of the dispute between the parties were not relevant to the substantive proceedings and there was no risk of their misuse;

29. the respondents did seek to understand what documents animated the applicant’s desire to restrain the respondents from acting, but that information was not provided until shortly before the Motion was filed; and

30. the opposition to the Motion was not “hopeless”, “unduly prolonged by groundless contentions”, “unreasonable” or “delinquent” (RS [11]).

Applicant – in Reply

26. The applicant submits that even if the Court accepts that the first respondent may have believed opposing the Motion was reasonable, that does not mean the Court should conclude that the belief was objectively reasonable (AS-Reply [5]).

Consideration

27. Whilst I accept there are aspects of the respondents’ conduct as described by the applicant in her submissions that tends in the direction of unreasonableness, on balance, I am of the view that the conduct does not rise to the level of a relevant delinquency or unreasonableness to justify making an order for indemnity costs. Certainly, the Motion was vigorously opposed. However, I do not believe that the circumstances are exceptional such as to justify the making of the primary order sought.

28. For this reason, in the exercise of my discretion I propose to make an order for the payment of costs on the ordinary basis. I note that an order for costs on the ordinary basis was sought in the alternative by the applicant.

Issue 3: Should the Court make a gross sum costs order?

Legal principles – Gross sum costs order

29. Section 98(4)(c) of the Civil Procedure Act 2005 (NSW) empowers the Court to order that the party to whom costs are to be paid is to be entitled to a specified gross sum instead of assessed costs.

30. The principles governing when a gross sum costs order were summarised by Beazley JA (with whom Giles and Whealy JJA agreed) in Hamod v State of New South Wales [2011] NSWCA 375 at [813]-[820]. A succinct summary of what her Honour said was provided in Gabrielle v Abood (No 4) [2023] NSWCA 100 at [6] (Bell CJ, Kirk and Adamson JJA), where their Honours said, citing Hamod:

“The power to make a gross sum costs order provided by s 98(4)(c) of the Civil Procedure Act 2005 (NSW) is discretionary. Authority establishes that the discretion is not confined and may be exercised whenever the circumstances warrant its exercise; it should only be exercised when the Court considers that it can do so fairly between the parties, and that includes having sufficient confidence in arriving at an appropriate sum on the materials available; courts have typically applied a discount in assessing costs on a gross sum basis; and the court is not required to undertake a detailed examination of the kind that would be appropriate to taxation or formal costs assessment: see Hamod v New South Wales [2011] NSWCA 375 at [813]-[820] and authority there cited.”

31. In Rahman v Rahman (No 2) [2025] NSWCA 266 at [61]-[64], the Court of Appeal (Payne, McHugh and Free JJA), stated the following:

“[61] A gross sum costs order can be made any time before costs are referred for assessment. Section 98 confers a wide discretion on the Court. The principles were stated by Beazley JA (as her Excellency then was) in Hamod at [813]-[820], see also Gabrielle v Abood (No 4) [2023] NSWCA 100 at [6] per Bell CJ, Kirk JA, and Adamson JA.

[62] In Hamod, Beazley JA at [813] identified some of the factors which merit particular consideration, including the relative responsibility of the parties for the costs incurred, the degree of any disproportion between the issue litigated and the costs claimed, the complexity of proceedings in relation to their cost, and the capacity of the unsuccessful party to satisfy any costs liability.

[63] The power to award a lump sum should only be exercised when the Court considers that it can do so fairly between the parties and where an appropriate sum can be determined from the available materials: Harrison v Schipp (2002) 54 NSWLR 734 at 743; [2002] NSWCA 213 at [21]-[22]; Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 123; [1995] FCA 350; Zepinic v Chateau Constructions (Aust) Ltd (No 2) [2014] NSWCA 99 at [28]-[29].

[64] A ‘broad brush’ approach is appropriate when a gross sum costs order is made. To require the same or a similar level of detail as in a formal costs assessment would defeat the purpose of the lump sum order: Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1 at 5; [1999] FCA 673 per O’Loughlin J; Penson v Titan National Pty Ltd (No 3) [2015] NSWCA 121 at [7].”

32. On the issue of evidence, in Baychek v Baychek [2010] NSWSC 987 (Baychek) at [11], Ball J stated (citations omitted):

“Normally, s 98(4)(c) of the CPA is treated as a provision for the benefit of the costs applicant. It permits a costs applicant to make an application for a gross sum costs order rather than being put to the expense and trouble of an assessment. Courts have made it clear that, when used in that way, the court is not required to proceed as if it were dealing with an assessment. It is entitled to take a broad brush approach provided that that approach is logical, fair and reasonable … Implicit in this principle is that the gross sum bear a reasonable relationship to the actual costs of the party making the application, and to the costs that that party might reasonably be expected to recover on assessment. That means, among other things, there must be a reasonable evidentiary basis for the order the court makes. The evidentiary basis is normally provided by the costs applicant in the form of an affidavit setting out the actual costs incurred and how they were calculated. Often, the evidence also includes evidence of the amount that is likely to be recovered on assessment.”

33. Baychek was more recently cited in In the matter of Mosman & Co Pty Limited [2020] NSWSC 1245 at [13] (Rees J) and Pirovic v Barbieri [2021] NSWSC 1460 at [23] (Sackar J).

34. On the issue of the exercise of discretion, Peden J stated in The Owners – Strata Plan 93105 v Richard Crookes Constructions Pty Ltd [2025] NSWSC 935 at [14]:

“As the Court of Appeal has recently observed, the Court’s discretion to make an order under s 98(4) is “unconfined”: Manariti Plumbing Pty Ltd v Universal Property Group Pty Ltd (No 2) [2025] NSWCA 185 at [46] (Free JA, Ball and McHugh JJA agreeing). However, where a party cannot point to any particular circumstance of their case that warrants the making of a gross sum costs order, whether or not of the kind previously considered appropriate to warrant the making of such an order, it may be appropriate for the matter to proceed to costs assessment: Manariti at [46]. …”

Submissions

Applicant

35. The applicant submits that, having regard to the relevant legal principles (AS [37]-[38]), the conduct of the respondents justifies the making of a gross sum costs order. In this, the applicant refers to the “extraordinary expense” she has incurred to obtain the restraint and “protect her confidential information”. The applicant also submitted that she requires the costs to fund the proceedings and should not be required to wait for a lengthy costs assessment process (AS [39]).

36. In making this submission, the applicant relies on the detailed Weinberger affidavit which sets out the total legal costs that the applicant has incurred and associated invoices and other relevant supporting documentation. Submissions in relation to the various rates charged and their reasonableness are made by reference to the Costs Assessment Rules Committee Guidelines dated 23 October 2023, of which the relevant parts are extracted in the Weinberger affidavit (at [51]).

37. The total sums invoiced on the Motion are $111,645.21 exclusive of GST, being $122,733.94 inclusive of GST (Weinberger affidavit at [62]). In terms of the amounts ultimately sought by the applicant however, $104,119.41 plus GST (being $114,531.35) is sought if an order is to be made on the indemnity basis, and $84,690.95 plus GST (being $93,160.05) if made on the ordinary basis (AS [46(c)]). The basis of these final sums is set out in the Weinberger affidavit ([52]-[66], particularly [65]-[66]).

Respondents

38. The respondents oppose the making of a gross sum costs order. Their submissions in opposition to such an order, as contained in RS [12]-[20], can be summarised as follows:

39. The total costs of the Motion are $122,733.94 inclusive of GST, which is disproportionate for an interlocutory proceeding and an amount that is not “small” (a “small” quantum of costs typically being a factor that justifies a gross sum costs order: In the matter of Yowi Group Ltd (No 2) [2025] NSWSC 605 at [9] (Nixon J)) (RS [13]-[14]).

40. The respondents ought to be given the opportunity to have the applicant’s costs assessed to ensure the work performed was in connection with the Motion and that there is no cross-over with work for the substantive proceedings, and to assess the reasonableness and overall proportionality of the costs incurred on the Motion (RS [15]).

41. The “broad brush” approach is unsuitable given the quantum of the applicant’s costs and because the substantive proceedings are progressing at the same time (RS [16]).

42. There would be no delay to the progression of the substantive proceedings by reason of a costs assessment, as the applicant could have her costs of the Motion assessed concurrently with the progression of the substantive proceedings (RS [17]-[18]).

43. That the applicant requires the payment of her costs to fund the substantive proceedings is irrelevant to the exercise of the Court’s discretion (RS [19]).

44. Fairness requires the respondents have the opportunity to test the reasonableness of the applicant’s costs of the Motion. It is said the respondents have not yet undertaken that exercise or incurred the costs of a costs assessment because there is presently no order for the respondents to pay costs (RS [20]).

Applicant – in Reply

39. In relation to the claim by the respondents in relation to the opportunity to obtain a costs assessment, the applicant replied as follows (AS-Reply [2]-[3]):

“[2] Prior to Wotton Kearney acting, the Respondents wrote to Ms Abdishou on 30 October 2025 and requested an extension of time to reply to her submissions on costs on the following basis (see Ex NW5X at pages 2 to 3 to the Weinberger Affidavit dated 1 December 2025):

The documents are much more extensive than had been anticipated when the orders were made originally for the application. This includes the needs to retain a cost assessor noting the gross sum you are seeking.

[3] Contrary to the stated need for the extension, the respondents have not retained a cost assessor. Rather, the respondents have made the forensic decision to not put on any evidence capable of establishing a basis for the submission that the costs are “disproportionate” (RS [14]). Nor is there any attempt to analyse what it is about the costs which are disproportionate. In such circumstances, the Court can more readily infer that the costs are proportionate and substantiated particularly because of the detailed nature of Mr Weinberger’s evidence. The Court should accept the evidence of Mr Weinberger as it is uncontroverted. The “broad brush” approach is appropriate. Moreover, the Court should accept the evidence because the respondents through, their new solicitors, are well positioned to provide the usual evidence rebutting Mr Weinberger’s evidence but have not (for whatever reason).”

Consideration

40. I have had regard to the legal principles relevant to the exercise of my discretion to award a gross sum costs order, as set out above, and do not propose to make such an order. The decision was finely balanced however, overall, I have come to the view that the making of the order sought would result in unfairness between the parties.

41. First, on the one hand, I accept that the detail of the evidence contained in the Weinberger affidavit remains unchallenged, in the sense that the respondents, for whatever reason, have ultimately elected not to retain a costs assessor and put on evidence in reply to the Weinberger affidavit.

42. The evidence is still challenged, however, in that the respondents have submitted that the costs claimed for the Motion are disproportionate to the interlocutory proceedings. (I pause here to point out that the respondents say the applicant’s “costs claimed are $122,000” (RS [20]). This is not the case, noting that the costs “claimed” are $114,531.35 (on the indemnity basis) or $93,160.05 (on the ordinary basis) (AS [46(c)])).

43. I do accept however, that in circumstances where the applicant’s costs are of the magnitude claimed, which I consider towards the high end of the range for an interlocutory proceeding of the nature of this case, I do not believe I am able make a proper (even if broad brush) assessment and consider that a specialist costs assessor will be in a better position to assess costs.

44. In taking this approach, I am not suggesting that the costs claimed by the applicant will not be recoverable, and do not want to be taken to be making any finding or otherwise suggesting that the costs incurred by the applicant have not been reasonably and properly incurred. No such finding is being made nor preliminary view articulated. My decision not to make an order is because I do not have confidence that I am able to arrive at the appropriate sum and that an estimation would be fair, logical and reasonable.

45. Second, whilst the parties have not raised this, one factor I may have regard to is whether the unsuccessful party can satisfy any costs liability. There has been no suggestion that the respondents are not able to do this, and so I consider this is not a consideration that would militate in favour of making a gross sum costs order.

46. Third, given the evidence of the applicant in this costs dispute, it is clear that a significant level of preparation has already occurred to enable the likely prompt commencement of the cost assessment process. In considering this issue, I have also had regard to the evidence of the applicant in relation to the respondents also having had the opportunity to prepare. This evidence is the correspondence from the respondents referring to their own preparation for the costs assessment process (see [39] above). In this, the respondents will not be in a position to complain they have not had the opportunity to prepare and make submissions, ensuring fairness in the process and outcome.

47. Fourth, I am of the view that the nature of the interlocutory proceedings and substantive proceedings are reasonably distinguishable, and that the issues involved in the interlocutory proceedings are reasonably clear and discrete. For this reason, I do not believe that any assessment of costs would be protracted and expensive.

48. Finally, I accept the submission by the respondents that a costs assessment process ought not delay the substantive proceedings. I acknowledge that the applicant has raised impecuniosity as one of the reasons underpinning the application for a gross sum costs order. Without finally deciding whether I could permissibly take this last mentioned factor into account, noting the respondents’ submission suggesting I could not, I consider that in any event, this factor is not significant or material in my opinion. It is the other considerations discussed above which were material to my decision, and so even if I can and should take into account the applicant’s impecuniosity, doing so does not change my opinion that a gross sum costs order should not be made in the circumstances of the Motion.

Issue 4: Should the costs be paid forthwith?

Legal principles – Costs paid forthwith

49. In Keane v Keane [2025] NSWSC 1298 at [78]-[79], I recently summarised the applicable principles as to when, in an interlocutory application, costs may be ordered as payable forthwith. For convenience, I shall reproduce that summary below:

“[78] In Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1; [2002] NSWSC 432 at [10]-[13], Barrett J set out the factors which have caused courts to depart from the normal rule (now embodied in UCPR r 42.7(2)) that the costs of an interlocutory application or step are not payable until the conclusion of the proceedings. The categories his Honour identified were:

(1) cases where ‘the application or aspect in respect of which the particular costs order is made before conclusion of the proceedings represents the determination of a separately identifiable matter or may be viewed as the completion of a discrete aspect’;

(2) cases where there ‘is some unreasonable conduct on the part of the party against whom costs have been ordered’; and

(3) cases where ‘one can see a fairly long time before the proceedings are disposed of’.

The statement of principles by Barrett J has been cited by the Court of Appeal: see, eg, Pavlovic v Universal Music Australia Pty Ltd (No 2) [2016] NSWCA 31 (Pavlovic) at [14]-[17] (Bathurst CJ, Beazley P, Meagher JA). In Keynes Capital Global Limited v Guo (No 2) [2020] NSWCA 336 at [12], Bell P, Meagher and Payne JJA quoted the summary of principle provided in Pavlovic with apparent approval.

[79] It is not necessary for all three of the factors outlined by Barrett J to be present before a ‘forthwith’ order can be made: Pavlovic at [24] (Bathurst CJ, Beazley P, Meagher JA).”

Submissions

Applicant

50. The applicant made the following submissions in support of an order that the respondents pay her costs of the Motion forthwith:

51. The substantive proceedings between the plaintiff and the applicant are still in their early stages, and it is possible that the proceedings will not conclude until 2027. The Motion, on the other hand, is now concluded and does not concern the plaintiff, and thus there is no reason by the applicant should be required to wait until the determination of the substantive proceedings before a costs order becomes operative (AS [44]).

52. It is likely a forthwith costs order is the default position in a situation such as this where a dispute concerns a non-party respondent to a motion (AS [45]). In support of this submission, the applicant cited the decision of Parker J in Morton v Williams [2017] NSWSC 1506 at [19], in which his Honour said:

“For these reasons, Mr Urquhart’s application fails. I see no reason why the costs of the application should not follow the event. As Mr Urquhart is not a party, there is no reason why the costs should not be assessable and payable forthwith. It may be that no order is necessary in this regard but I propose to make an order which will make that clear.”

Respondent

51. On the issue of whether any costs ordered ought to be paid forthwith, the respondents made the following submission (RS [21]):

“If the Court orders the Respondents to pay the Applicant’s costs for a gross sum figure, the solicitor contends a forthwith costs order is unnecessary. As a non-party to the substantive proceedings, costs will become payable upon the Court making the order.”

Consideration

52. Having regard to the circumstances of this case, together with the submissions made by parties, for the following reasons I consider it is appropriate to order that the costs of the applicant be payable forthwith.

53. First, I am of the view that the circumstances of this case come within the principle that costs may be payable forthwith where “the application … represents the determination of a separately identifiable matter or may be viewed as the completion of a discrete aspect”. The issue in dispute here, whether the respondents ought to have been restrained from acting in these proceedings, is clearly discrete and separate from the substantive proceedings. This conclusion is supported by the fact that the respondents are not parties to the substantive proceedings.

54. Second, I accept the submissions of the applicant that I have been provided with no reason that the costs ought not to be paid forthwith.

55. Third, the respondents did not otherwise contest an order that the costs of the Motion be payable forthwith. Their only submission on this issue relates to what the Court should do if a gross sum costs order was made, which has not occurred.

Orders

56. For the reasons set out above, the Court makes the following orders:

57. Set aside order 2 made on 3 October 2025.

58. The respondents are to pay the costs of the applicant on the Notice of Motion filed on 17 June 2025 by the first defendant, including the costs associated with the final determination of costs, on the ordinary basis, as assessed or agreed, forthwith.

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