Plaintiff v Defendant

2 The initial trial of this group proceeding was listed to commence before Forbes J on 6 October 2025 on an estimate of 25 sitting days. The trial did not proceed as ordered and has been re-listed to commence on 31 March 2026.

3 On 8 November 2025, the defendant applied for orders that the plaintiff pay its costs thrown away by reason of the adjournment of the trial and for those costs to be taxed forthwith ('costs application'). In the costs application, the defendant also sought the following orders:

1. Pursuant to ss 24(1), 33ZD or 33ZF of the Supreme Court Act 1986 (Vic), further or alternatively s 65C of the Civil Procedure Act 2010 (Vic), further or alternatively, r 63.23 of the Supreme Court (General Civil Procedure) Rules 2025, further or alternatively the inherent jurisdiction of the Court, Dominica Sophia Tannock pay to the Plaintiff all costs required to be paid by the Plaintiff pursuant to orders 1 and 2 above.
2. Alternatively to order 3, pursuant to s 29 of the Civil Procedure Act 2010 (Vic), Dominica Sophia Tannock show cause as to why she should not be required personally to pay the costs ordered pursuant to orders 1 and 2 above.

On 29 October 2025, I listed the costs application for hearing on 17 December 2025 and made relevant timetabling orders.

4 On 24 November 2025, the solicitor for the plaintiff, Dominica Sophia Tannock, trading as DST Legal ('non-party'), applied to have the costs application stayed until further order ('non-party application'). In the alternative, the non-party applied to vacate the hearing date of 17 December 2025 and to have the costs application listed for further directions.

5 For the reasons that follow I have concluded that the non-party application should be dismissed.

6 On 4 September 2025, the parties attended a judicial mediation before Efthim AsJ. The mediation was unsuccessful.

7 The parties were required to file and serve written outlines of opening submissions by 29 September 2025.

8 On 30 September 2025, the plaintiff filed and served a written outline of opening submissions signed by the non-party.

9 The non-party appeared for the plaintiff at a case management hearing on 1 October 2025 and informed the Court that:

[T]here is currently an issue with counsel. I would prefer not to go into details with the court... at this stage, I will be appearing for the plaintiff and group members.

I will be reviewing the objections that had previously been prepared by counsel, if we don't have new counsel briefed.

10 The non-party appeared for the plaintiff without counsel on the first day of the trial. She informed Forbes J that she had not obtained counsel for the trial and that she intended to run the trial herself without counsel or an instructing solicitor. Forbes J did not permit the non‑party to conduct the trial, on the basis that she was not satisfied that the interests of group members would be adequately protected. Forbes J ordered that the parties attend a further judicial mediation on 10 October 2025.

11 At or shortly after the mediation on 10 October 2025, heads of agreement were signed in respect of an in-principle settlement agreement. The parties attended before Forbes J on 13 October and orders were made for the plaintiff to file and serve a summons and supporting affidavit seeking approval of the settlement pursuant to s 33V of the Supreme Court Act 1986 (Vic) ('Act').

12 The defendant alleges that on and from 17 October 2025 the non-party:

(a) feigned ignorance of the heads of agreement, or otherwise disavowed or withdrew her agreement to the terms; and

(b) repudiated the in-principle settlement agreement.

13 The proceeding was listed before me on 29 October 2025 after the parties had informed the Court that the proceeding had not settled. At that hearing, the defendant foreshadowed making the costs application and an application for security for costs. The defendant submitted that the circumstances which resulted in the trial not proceeding and there being no settlement raised serious issues about the conduct of the non-party and her ability to properly represent the interests of group members that should be resolved through the lens of the costs application before the matter proceeded further.

14 The defendant filed and served the costs application, supported by an affidavit of solicitor James Clarke, sworn 8 November 2025, and an affidavit of solicitor Jessica White, affirmed 24 November. The defendant filed and served an outline of submissions in support of the costs application on 24 November.

15 An affidavit in opposition to the costs application was affirmed by Green on 17 November 2025.

16 The non-party instructed solicitors Colin Biggers & Paisley to act on her behalf in relation to the costs application. Those solicitors wrote to the defendant's solicitors on 12 November 2025 alleging it had failed to provide full and proper particulars for the legal and factual basis of the allegations made against their client. In that letter, the non-party's solicitors sought agreement that the costs application be adjourned until after trial. The defendant did not agree to defer the costs application.

17 The non-party filed a summons on 24 November 2025 seeking to stay the costs application, or in the alternative that the hearing date of 17 December for the costs application be vacated. The non-party's summons is supported by an affidavit of solicitor, Lachlan Boughton, sworn 24 November.

18 The costs application relies on s 65C of the Civil Procedure Act 2010 (Vic) ('CPA'), or alternatively r 63.23 of the Supreme Court (General Civil Procedure) Rules 2025 (Vic) ('Rules'). Section 65C of the CPA gives the Court the power to make any order as to costs it considers appropriate to further the overarching purpose of the CPA. The costs liability of a lawyer is dealt with by r 63.23 of the Rules, which relevantly reads:

(1) Where a solicitor for a party, whether personally or through a servant or agent, has caused costs to be incurred improperly or without reasonable cause or to be wasted by a failure to act with reasonable competence and expedition, the Court may make an order that -

(a) all or any of the costs between the solicitor and the client be disallowed or that the solicitor repay to the client the whole or part of any money paid on account of costs;

(b) the solicitor pay to the solicitor's client all or any of the costs which the client has been ordered to pay to any party;

(c) the solicitor pay all or any of the costs payable by any party other than the client.

(2) Without limiting paragraph (1), a solicitor fails to act with reasonable competence and expedition for the purpose of that paragraph where any application in or trial of a proceeding cannot conveniently be heard or proceed, or fails or is adjourned without any useful progress being made, by reason of the failure of the solicitor to -

(a) attend in person or by a proper representative;

(b) file any document which ought to have been filed;

(c) lodge or deliver any document for the use of the Court which ought to have been lodged or delivered;

(d) be prepared with any proper evidence or account; or

(e) otherwise proceed.

(3) The Court shall not make an order under paragraph (1) without giving the solicitor a reasonable opportunity to be heard.

19 The power conferred by r 63.23 of the Rules is 'essentially compensatory and for the benefit of parties to litigation' and 'should be exercised as simply and as expeditiously as the requirements of procedural fairness permit'.[1]

20 The non-party relied heavily on the decision in Muriniti v Kalil ('Muriniti').[2] Muriniti concerned an application by the plaintiffs in defamation proceedings made pursuant to s 99 of the Civil Procedure Act 2005 (NSW) ('CPA (NSW)') that the solicitors who acted for the defendants personally pay their costs of and incidental to several applications for leave to amend the defence. The costs application was heard by a district court judge over six days, resulting in a lengthy judgment. The New South Wales Court of Appeal concluded that any deficiencies in the solicitors' conduct did not warrant a personal costs order. A legal practitioner may be ordered to pay costs under s 99(1) of the CPA (NSW) on the basis of serious neglect, serious incompetence or serious misconduct. Leeming JA said, considering the timing of the application for costs:

I also agree that it was wrong for the plaintiff's solicitor Mr Goldsmith to have threatened to seek special costs orders, including orders that the appellants pay, personally, the costs of and occasioned by the amendment, some 15 days after receipt of the original defence and cross-claim. Ordinarily an application of this nature should be made at the conclusion, not the commencement, of proceedings. The present application was no exception to the general rule. I would rest my judgment on that point.[3]

Courts have not infrequently deprecated the threatening or making of applications for personal costs orders during or prior to the final hearing. This is for multiple reasons. First, often it cannot be determined until the conclusion of the trial whether steps taken in the matter were warranted, or unreasonable.[4] Secondly, the lawyer's independence may be compromised, and the client's confidence undermined, by an opponent's threats to apply for costs against the lawyer during the proceedings. Thirdly, such a threat or application will often if not usually place the lawyer in position of conflict, resulting in the lawyer deciding that he or she can no longer act, depriving the client of its chosen representation while the proceedings are still on foot.[5]

The conflict arose because of the timing of the application for a personal costs order. By raising the spectre of such an application at the outset of the proceedings, the Plaintiffs - or their lawyers Goldsmiths - created the potential conflict. Had they, in accordance with the guidance of the authorities referred to early in this judgment, awaited the outcome of the proceedings, it would not have arisen. Whether or not intended, making the application was calculated to create a conflict and the Plaintiffs, or their lawyers, ought to have realised this.[6]

22 The application has placed the plaintiff and his solicitor in a position of conflict that will crystallise if it is heard and determined. As a consequence, the plaintiff has been deprived of his chosen solicitor on the costs application and the defendant's security for costs application against him. The plaintiff's counsel are acting for him on both applications without an instructor and may be required to advance a position that is against the non-party's interests. If that situation eventuates, there is a risk that the relationship between the non-party and counsel will be undermined. Further, the application creates a risk of undermining the relationship between the plaintiff and his solicitor such that it irretrievably breaks down. The cumulative effect of these matters is to create a real risk of prejudice to the plaintiff and the group members in this proceeding. On the other hand, the defendant has not identified any prejudice in having the costs application deferred to a time after the trial.

23 The non-party's ability to defend the serious allegations made in the costs application is significantly hampered as the allegations concern communications that are subject to legal professional privilege that the plaintiff has not waived. If the costs application is heard after the trial and the plaintiff waives privilege, there will be greater certainty surrounding the events leading to the vacation of the trial date and the failure of the settlement.

24 If the non-party ceases to act by reason of the costs application, that will likely result in vacation of the trial date and delay in determination of the proceeding.

25 The defendant has not particularised the costs that it seeks. There is a real concern that costs incurred by all parties in relation to the costs application will not be proportionate to the relief sought.

26 The costs application and the orders sought by the defendant against the non-party are inextricably intertwined. The question of whether the defendant should have an order for its costs should only be heard and determined once. It follows that if the costs application is deferred, the application for a personal costs order against the non-party should also be deferred.

27 Unless and until privilege is waived (most likely once the case is at an end), it will be difficult, if not nearly impossible, for the Court to determine whether the defendant's costs were caused by the plaintiff's actions, the conduct of the non-party, or neither. The plaintiff's interests plainly lie in an order for costs being made against the non-party rather than himself. However, he would be constrained in making that case without going into the privileged conduct of the non-party.

28 The conflict between the plaintiff and the non-party crystallised with the costs application and will remain even if the costs application is deferred. It is in the interests of all parties and of group members that the uncertainty about responsibility for the wasted costs be resolved promptly. So long as the uncertainty remains, it may affect the behaviour of the parties in the litigation, for example, in relation to making or responding to offers to resolve the claim.

29 The submission that the plaintiff has been deprived of his chosen solicitor in the costs application and security for costs application ignores the position of group members whose interests will not be served if the question of responsibility for wasted costs is left unresolved. The issues ventilated and resolved on the hearing of the costs application will be relevant to whether group members wish to exercise the right to apply to substitute another group member for the plaintiff and to continue to instruct the non-party as their solicitor, or to seek to opt out of the proceeding. One obvious example is the decision to proceed with the trial with the non-party acting as an advocate without an instructing solicitor. That course was plainly not in the interests of group members, yet the plaintiff was content for it to occur.

30 The plaintiff will be represented by experienced counsel at the hearing on 17 December 2025 and is therefore not being deprived of excellent representation.

31 The non-party alleges that the hearing and determination of the costs application may undermine the confidence of the plaintiff and group members in her. If that occurs because, as a result of a hearing the group members become aware for the first time of matters such as the non-party's retainer; the way the proceeding is being funded; or other matters to do with the non-party's conduct resulting in adjournment of the trial, those matters would weigh in favour of the application being heard now.

32 There is nothing to justify the Court accepting a submission by the non-party and the plaintiff that if the conflict issues result in the non-party being unable to continue to represent the plaintiff and group members, there is a risk that no other solicitor could be retained. Counsel have been briefed for the plaintiff and were ready to proceed with the trial in October this year. In the circumstances of this case, there is ample time for new solicitors to be retained and be ready for trial on 31 March 2026.

33 It is a matter for the plaintiff to determine whether he wishes to waive privilege on the costs application. Any waiver of privilege could be managed so that the plaintiff was not prejudiced, particularly in circumstances where the judge hearing the application will not be the trial judge.

34 There is no basis for the submission that the costs application will be able to be determined more simply and expeditiously after the trial. It is unclear and unknown whether the plaintiff would waive privilege at that time, and if the plaintiff does not, there would be no difference in the way the issues would need to be heard and determined.

35 No reason has been advanced justifying adjournment of the costs application. The non-party has been on notice of the application for some time. Any affidavit to be made by her should already have been in train and is likely to be fairly narrow in scope.

36 The reason the trial could not proceed in October was because of the conduct of the plaintiff and the non-party. As a matter of fairness, the defendant should not bear the costs and burden of preparing for a second trial without clarity in relation to who will bear responsibility for the costs thrown away. The interests of the defendant, the plaintiff and group members are not served by having the very significant issue of the costs of the first trial unresolved.

37 There are important differences between the facts in Muriniti and this case. In Muriniti, the threats to seek a special costs order commenced at the earliest possible stage of the proceeding immediately after the first draft defence was served. Repeated threats were made throughout the proceeding. In this case, the costs application relates to the adjournment of the trial and the costs wasted as a result.

38 The statutory test for determining whether the solicitors should be liable for costs is quite different in Muriniti, requiring a finding of serious neglect, incompetence or misconduct. Here the claim is for costs wasted by an alleged failure to act with reasonable competence and expedition.

39 The issues raised by the application in Muriniti inevitably involved consideration of the merits of the defence such that it was difficult for the costs application to be determined until the proceeding had concluded. In this case, the application requires determination of responsibility for a distinct event, being adjournment of the trial. Finally, there are different considerations because this is a group proceeding; namely the interests of group members and when the costs application would be heard if it is adjourned.

40 There is no doubt that the parties' costs have been wasted because of adjournment of the trial. It is likely both parties' costs thrown away are significant. There is no reason why the defendant could not seek an order for its wasted costs against the plaintiff at this time. Taking that step inevitably introduces the question of whose conduct was responsible for the adjournment.

41 The issue of conflict between the interests of the plaintiff, group members, and the non-party in respect of the wasted costs of the adjourned trial has already crystallised. To a degree, the issue arose immediately from the circumstances of the trial adjournment. It was reinforced at the case management hearing on 29 October 2025, when the defendant submitted that adjournment of the trial raised serious questions about the conduct of the plaintiff and the non-party and an associated concern about the ability of the non-party to properly represent group interests. If there was any doubt, the conflict was made even more evident by the filing and service of the costs application and affidavit in support on 8 November, and the filing and service of the defendant's written submissions on 24 November. The conflict between the interests of the plaintiff, group members and the non-party will remain until the costs application is heard and determined.

42 I accept the defendant's submission that consideration of the interests of group members is a factor that weighs in favour of determining the costs application now. Determination of the responsibility for the trial adjournment and wasted costs will be a relevant consideration for group members in exercising their rights under pt 4A of the Act. Group members will undoubtedly be concerned to know why the trial is adjourned, who is responsible for the costs of the adjournment and why the proceeding did not settle in accordance with the heads of agreement. Given the representative nature of the proceeding, it is important that the Court be mindful of the interests and rights of group members.

43 I accept the defendant's submission that if responsibility for costs wasted by reason of the trial adjournment remains unresolved, there is a risk it will interfere with decisions about the proceeding made by the parties, particularly in relation to attempts at resolving the claim. Leaving the costs issue unresolved will not facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute in the proceeding.

44 The plaintiff's maintenance of privilege is not a sufficient reason to adjourn the application. If privilege is maintained, there must be a full allowance for the non-party's inability to tell the full story of the reasons for the adjournment. In those circumstances, the benefit of any doubt must be given to the non-party.[7] If the plaintiff's position changes and he seeks to rely on privileged material, it may be possible to manage that issue without the defendant being given access to privileged material. Alternatively, the plaintiff may seek to reserve his right to further agitate the non-party's responsibility for costs thrown away at a later date, including by relying on the terms of his contract with the non-party.

45 It seems likely that the relevant privileged communications will involve issues of liability, causation and quantum that extend beyond the plaintiff's own case to the claims by group members. If that is so, the logical basis for maintaining privilege would remain until all group member claims have been finally determined. There is no logical reason for the plaintiff to take a different attitude to maintaining privilege until after the appeal period if the initial trial fails or after determination of group member claims if it succeeds. At best, the privilege issue would result in the costs application being deferred indefinitely and almost certainly for well over 12 months. Even then, the plaintiff's attitude to waiving privilege may remain unchanged. An indefinite delay would not aid the simple and expeditious determination of the non-party's responsibility for the wasted costs.

46 I accept there is merit in the defendant's submission that it is entitled to know who should bear responsibility for costs wasted because of adjournment of the first trial before it is put to the costs of preparing for the trial again.

47 The power in r 63.23 of the Rules is to be exercised summarily. The non-party has been aware since at least 29 October 2025 of the defendant's allegation that her conduct was a cause of adjournment of the trial and wasted costs, and that any application by the defendant for those costs to be paid would be determined by the Court on 17 December. The non-party has had the costs application and affidavit in support for a month and the defendant's extensive submissions for two weeks. The non-party can be expected to be intimately familiar with all of the facts and circumstances relevant to the costs application. In the circumstances, the costs application can be fairly determined on 17 December.

48 The security for costs application is also listed for hearing on 17 December 2025. At the hearing on 5 December, the parties focused on whether the costs application should be adjourned. A consequence of refusing to adjourn the costs application is that counsel will represent the plaintiff's interests at the hearing without the assistance of an instructing solicitor. The security for costs application has the potential to significantly impact the interests of the plaintiff and group members in this proceeding. It is not appropriate for that application to be heard when the plaintiff is represented by counsel without the assistance of an instructing solicitor.

49 The non-party's application is dismissed. The costs thrown away application will be heard on 17 December 2025 and the security for costs application adjourned to a date to be fixed. I made orders on 8 December giving effect to these reasons.

[1] Gippsreal Ltd v Kenny [2016] VSCA 319; (2016) 52 VR 149, 177-8 [102].

[2] [2022] NSWCA 109 ('Muriniti').

[4] Ridehalgh v Horsefield [1994] Ch 205; 3 All ER 848.

[7] Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No 5) [2014] VSC 400; (2014) 48 VR 1, 23 [57](i).