Plaintiff v RAYMOND SAILAH & ORS

1. On 20 October 2025, I published my reasons in this matter[1] and made orders refusing the plaintiff's application for an interlocutory injunction and dismissing its interlocutory process dated 11 June 2025.
2. The plaintiff (Maradox) had sought an interlocutory injunction to restrain the first and second defendants (Raymond and James) from putting a resolution to the board of Norstar Recycling Pty Ltd (Norstar) which would require it to pay amounts totalling $25,517,399.60 to companies associated with Raymond and James: R & J Sailah Pty Ltd, Raymond Sailah Pty Ltd and James Sailah Pty Ltd (the R & J companies).
3. At [156] of my reasons, I said:

The usual rule when a plaintiff fails on an application for interlocutory injunctive relief is that costs follow the event, but there may be circumstances of which I am unaware that would displace the usual rule. I will deal with the question of costs and what further directions should be made in the proceeding at the directions hearing on 31 October 2025.

1. In advance of the directions hearing held on 31 October 2025, the first and second defendants indicated that, in addition to seeking an order for the costs of the application, the R & J companies would make an application for damages sustained by them by reason of an order made on 11 June 2025 in respect of which the plaintiff had given the usual undertaking as to damages.[2]
2. On 31 October 2025, I ordered that the determination of all questions as to the costs of the plaintiff's interlocutory application and any application for damage sustained by reason of the orders made on 11 June 2025 be set down for hearing on 19 December 2025.
3. Following the making of the order on 31 October 2025, the first and second defendants indicated that the R & J companies would make an application for damages, but that they had elected to do so at the conclusion of the proceeding.
4. On 7 November 2025, I ordered by consent that the hearing set down for 19 December 2025 would be confined to all questions as to the costs of the plaintiff's interlocutory application and that the determination of any application for damages sustained by reason of the orders made on 11 June 2025 be adjourned to a date to be fixed following the hearing and determination of the proceeding.
5. The parties filed detailed written submissions and made oral submissions at the hearing on 19 December 2025.

B THE FIRST & SECOND DEFENDANTS' SUBMISSIONS

1. Raymond and James seek an order that the plaintiff pay their costs of and incidental to the interlocutory application.
2. They contend that the costs be:

(a) assessed on a standard basis until 25 June 2025, or alternatively until 10 or 23 September 2025, and thereafter on an indemnity basis; and

(b) taxed immediately in default of agreement.

1. As on the interlocutory application, the third and fourth defendants did not appear or otherwise participate in this costs application. Noting this, and for convenience, I will occasionally refer to the first and second defendants as the defendants. I otherwise adopt the terms defined in Re Norstar and this ruling should be read together with those earlier reasons.

1. The defendants submit that the usual rule is that the costs follow the event where a plaintiff fails on an application for an interlocutory injunction, particularly where a plaintiff fails to establish that there is a serious question to be tried.[3]

1. The defendants submit that there are special circumstances warranting an award of costs on an indemnity basis. Their principal submission is that costs should be assessed on a standard basis until 25 June 2020 and on an indemnity basis thereafter.
2. A key issue underlying the interlocutory application was the reference to payment of 'unpaid dividends' in the proposed resolution to the R & J companies who were not otherwise shareholders of Norstar and the nexus between the payment of those 'unpaid dividends' to the repayment of loans by Norstar to the R & J companies.
3. The defendants emphasise that on and from 25 June 2020, any misconceptions that might have arisen from the reference to 'unpaid dividends' in the proposed resolution were dispelled for a number of reasons, including that:

(a) Maradox, through Paul Sailah (Paul), knew of significant amounts recorded in Norstar's loan accounts to the R & J companies, including as a result of correspondence between Paul and Norstar's accountants;

(b) Norstar's financial statements, which recorded debts owing to the Corporate Beneficiaries, were confirmed as being accurate by Paul (in his capacity as a Norstar director) in most years through directors' declarations;

(c) on 10 June 2025 (being the date before Maradox filed its interlocutory application), the defendants' solicitors sent an email to Maradox's solicitors stating (amongst other matters) that what was proposed was the repayment of loans owing to R & J companies; and

(d) on 25 June 2025, senior counsel for the defendants conceded that the reference to 'unpaid dividends' was 'infelicitous'.[4]

1. They further contend that Maradox lacked any genuine belief that the loan accounts were inaccurate when it first filed its interlocutory application because:

(a) in June 2024, Paul and his accountant refused to engage when the defendants' personal accountant sought to discuss how Norstar loan imbalances could be resolved;

(b) in August 2024, the defendants had sent a letter to Paul explaining the history of unequal drawings and stating that the defendants wished to reduce the loan imbalances; and

(c) in September 2024, the Norstar board resolved to pay debts owing to the R & J Companies as well as Davmas.

1. They further contend that because Maradox did not rely on any accounting evidence when the application was heard, it may be inferred that it did not have or would not be able to adduce any such evidence when the application was filed.
2. In other words, the defendants contend that from 25 June 2025, Maradox should have known that the defendants were seeking payment of loans owed by Norstar to the R & J companies and therefore should not have continued the interlocutory application.
3. In the alternative, the defendants submit that costs should be awarded on an indemnity basis from 10 September 2025 because of two events which occurred on this date:

(a) the defendants formally amended the wording of their resolution by removing the reference to 'unpaid dividends'; and

(b) Paul (through his son Bradley) attempted to draw down on Davmas' loan account - an act which Paul stated had 'no difference' to the defendants seeking partial repayment of their loan accounts.[5]

1. The defendants further contend that this justifies an inference that Maradox knew at all relevant times that Norstar was indebted to the R & J companies and understood why that was the case.
2. In the alternative, the defendants submit that costs should be awarded on an indemnity basis from 23 September 2025 because they had filed their evidence in response to the interlocutory application by this time, including the affidavits of Gregory Aloysius Valles and Sophie Joy Chisholm dated 22 September 2025. They contend this evidence confirmed the validity of the loan accounts and provided an explanation as to why the loan amounts were owed.

1. The defendants submit that the Court should exercise its discretion not to apply the default position established by r 63.20.1 of the Supreme Court (General Civil Procedure) Rules 2025 (Vic), that the costs are taxed at the end of the proceeding in the case of an interlocutory application. The defendants seek the costs to be taxed immediately.
2. They submit that the Court's discretion not to apply the default position is available, and confined only by the principle that the discretion must be exercised judicially.[6]
3. The defendants emphasise three factors in support of their position.

(a) First, the issue determined in the interlocutory application is discrete from the proceeding because Maradox no longer disputes the validity of the loan accounts. The defendants cite a report of Dawna Wright dated 2 December 2025, filed in a different proceeding (S ECI 2023 02770), in which Ms Wright is instructed to adopt the evidence of Ms Chisholm and Mr Valles (including the assumption that Norstar's accounts accurately record the loan accounts).

(b) Secondly, the likelihood of delay in the disposition of the proceeding by a year or more supports an order for immediate taxation.

(c) Thirdly, based on the Court's findings in respect of Maradox's conduct,[7] there is a want of competence and diligence on its part.

1. Maradox seeks an order that the costs of and incidental to the interlocutory application be costs in the cause or reserved until the hearing and determination of the proceeding. Alternatively, it submits that it should only be ordered to pay the defendants' costs of the interlocutory hearing on 6 October 2025, to be taxed on a standard basis at the end of the proceeding.

1. Maradox submits that where a plaintiff fails on an interlocutory application the usual rule is not that costs follow the event because the Court is often unable to arrive at a just result without recourse to the outcome of the principal proceeding.[8]
2. Maradox's submissions emphasise the defendants' refusal to substantiate the legal basis for payment of 'unpaid dividends' to the R & J companies, being a novation of debts owed by Norstar to Normet, until late in the litigation. It contends, in effect, that the antecedent issue to Norstar's repayment of loans to the R & J companies was the substantiation of how that liability arose in favour of the R & J companies.
3. Accordingly, Maradox contends that the defendants' conduct caused the 'real issues' to be obscured and facilitated the loss of opportunity to expeditiously dispose of the interlocutory application without a hearing. It points to the following actions to support this proposition:

(a) on 1 August 2024, the defendants stated that amounts had been 'transferred' that were owed by Norstar to Normet;

(b) on 4 September 2024, the defendants voted in favour of Norstar paying to non-shareholder entities 'unpaid dividends' referable to the period 1 July 2007 to 30 June 2017;

(c) between 8 June 2025 to 10 September 2025, the defendants sought this second proposed resolution for the payment of 'unpaid dividends', and between 4 September 2024 to 10 September 2025, the defendants never clarified that there had been a novation of debts owed by Norstar to Normet;

(d) the defendants refused Paul's request for a copy of Mr Valles' findings on 24 July 2025;

(e) by email from James to Paul on 18 September 2025, James stated there was little to be gained from further investigations with Lipins. Notwithstanding this, on 22 September 2025, the defendants filed detailed affidavits made by Ms Chisholm and Mr Valles of Lipins; and

(f) the defendants did not assert that there had been a novation of the debts owed by Norstar to Normet until 3 October 2025.

1. Maradox further points to various events discussed in the affidavit of Nancy Jacqueline Collins dated 21 June 2025 to support its proposition that the defendants never meaningfully explained the basis of the 'unpaid dividends'. It contends that the above actions will form part of its oppressive conduct claim the subject of the proceeding, and therefore what is just and fair will depend on the outcome of the proceeding.

1. In the alternative, Maradox submits that any award of costs should be limited to the costs of the hearing on 6 October 2025 and taxed on a standard basis for the following reasons:

(a) the concession by senior counsel for the defendants on 25 June 2025 that the reference to 'unpaid dividends' was 'infelicitous' did not disclose anything about the novation (and nor was the concept of 'unpaid dividends' entirely abandoned by the defendants at that time);

(b) the amended resolution on 10 September 2025 which removed the reference to 'unpaid dividends' was not accompanied by any explanation and Maradox had not been provided with a copy of Mr Valles' investigation report;

(c) the defendants' evidence filed on 23 September 2025 did not mention the novation of debts; and

(d) the first mention of novation was in the defendants' written submissions filed on 3 October 2025 (with Maradox seeking a short period of time to be allowed for its reading and consideration).

1. Maradox rejects that the defendants have established special circumstances which warrant an order for indemnity costs. It submits that costs should be taxed on a standard basis for the following reasons:

(a) it had a proper basis to file its interlocutory application given the defendants ultimate resolution on 10 September 2025 did not refer to the payment of 'unpaid dividends';

(b) the fact that Mr Valles described the various transactions as 'complex' and said that each of his worked examples 'took days to prepare' does not demonstrate that Maradox knew the application had no chance of success, disregarded known facts or law, or lacked genuine belief that the loan accounts were inaccurate;

(c) the concession by senior counsel for the defendants on 25 June 2025 that the reference to 'unpaid dividends' was 'infelicitous' did not remove Maradox's doubt given it did not disclose anything about the novation;

(d) the novation itself was not obvious to Paul, Raymond and James from year-end financial accounts or correspondence given it required the specialist assistance of Mr Valles;

(e) the defendants first asserted that there had been a novation of debts after more than one year following requests made by Paul and his solicitors to provide a legal basis;

(f) notwithstanding Paul's cooperation with the defendants in engaging Lipins to investigate the loan accounts, the defendants filed detailed affidavits four days after suggesting that Lipins' investigation yielded little value;

(g) the defendants did not adduce evidence of any prejudice, noting that they caused Norstar to pay their respective companies $24,821,643 on 4 September 2024;

(h) Paul's conduct in relation to the Davmas loan does not give rise to an inference that he (or Maradox) knew how Norstar came to be indebted to the R & J companies; and

(i) the fact that Maradox did not call any accounting evidence is unsurprising given its application was aimed at the defendants substantiating their assertion that the 'unpaid dividends' were owed to non-shareholders.

1. For completeness, I note that Maradox contends the defendants withheld Mr Valles' report by pointing to a statement in a letter between the parties' lawyers on 3 September 2024. In response, the defendants state that there was no such report detailing the outcome of the investigations at that time, and that the reference in that letter to the outcome of the investigations was an invitation to share and discuss the results by meeting.[9] The defendants state the only report that sets out the results of Mr Valles' investigation is the report which was dated 22 September 2025.

1. In support of its alternative submission, Maradox submits that taxation should not occur until the proceeding has been heard and determined. It emphasises that the manner in which the defendants attempted to pass the initial draft of the proposed resolution for the payment of 'unpaid dividends' without adequate explanation adds to its allegations of oppression in the proceeding.
2. In relation to Maradox's instruction to Ms Dawna Wright to adopt certain assumptions, it contends that the issue is not conceded.
3. In response to the defendants submission that delay to the final resolution of the proceeding justifies immediate taxation, Maradox submits that the defendants pressed for the matter to proceed by way of pleadings and thereby contributed to any delay.
4. Maradox further rejects that there has been a want of competence and diligence, and points to the facts it highlights above in this regard.

1. Pursuant to s 24(1) of the Supreme Court Act 1986 (Vic), the Court has a broad discretion in relation to costs.
2. Rule 63 of the Supreme Court (General Civil Procedure) Rules 2025 (Vic) relevantly states:

Where an interlocutory or other application is made in a proceeding and -

(a) no order is made on the application; or

(b) the order made is silent as to costs -

the costs are the parties' costs in the proceeding, unless the Court otherwise orders.

63.20.1 Taxation of costs on interlocutory application or hearing

If an order for costs is made on an interlocutory application or hearing, the party in whose favour the order is made shall not tax those costs until the proceeding in which the order is made is completed, unless the Court orders that the costs may be taxed immediately.

1. The starting position under r 63.20 is that where no order is made on an interlocutory application, the costs are the parties' costs in the proceeding unless the Court orders otherwise.
2. As noted in Dale, '[t]he court's discretion to "otherwise order" is not circumscribed in any way by the rules, but must be exercised judicially'.[10]
3. While some decisions speak of a 'usual order' that 'costs follow the event when a plaintiff is unsuccessful in its application for an injunction',[11] it must be recognised that the costs of an interlocutory application are always a matter of discretion to be exercised judicially according to the circumstances of the case.
4. Where an applicant fails to establish a serious question to be tried or a prima facie case - that is, fails at the first threshold for interlocutory relief - costs will ordinarily be awarded against the applicant. However, this is not an inflexible rule, and each case turns on its own facts and circumstances.
5. Relevant considerations include: the nature and significance of the issue determined; the conduct of both parties in relation to the application; whether the applicant failed at a threshold stage or after a more substantive examination of the merits; whether the issues ventilated are discrete from or connected to the substantive proceeding; and whether the outcome of the interlocutory application is likely to be affected by the final determination of the proceeding.

1. In the present case, several factors point strongly in favour of ordering Maradox to pay the defendants' costs of the interlocutory application.
2. First and most significantly, Maradox failed to establish a serious question to be tried or a prima facie case. As I found in my principal reasons, Maradox's case faced fundamental difficulties. It could not point to any clear legal basis for contending that the payments proposed by the defendants would be unlawful or contrary to Norstar's interests. The evidence did not support Maradox's contention that the loan accounts recorded in Norstar's financial statements were inaccurate or that the proposed payments represented anything other than repayment of legitimate debts. This was a failure at the threshold stage of the test for interlocutory injunctive relief.
3. Secondly, Maradox commenced and maintained the application despite being in possession of information that should have caused it to question the viability of its case. Paul (through whom Maradox acted) had knowledge of the loan accounts recorded in Norstar's financial statements for many years. He had signed directors' declarations confirming the accuracy of those financial statements. He had been involved in correspondence with Norstar's accountants about the loan imbalances. In August 2024, the defendants had sent a letter to Paul explaining the history of unequal drawings and their wish to reduce the loan imbalances. In September 2024, the Norstar board had resolved to pay debts owing to the R & J companies. Against this background, Maradox's decision to commence and maintain the interlocutory application seeking to restrain those payments requires careful scrutiny.
4. Thirdly, the application was pursued without Maradox filing any accounting evidence to support its contentions.
5. Fourthly, Paul attempted attempt to draw down on the Davmas loan account while challenging the defendants' similar rights.

1. Against these factors must be weighed Maradox's submissions concerning the defendants' conduct. The defendants' proposed resolution referred to payment of 'unpaid dividends' to the R & J companies. As I noted in my principal reasons, this reference was confusing given that the R & J companies were not shareholders of Norstar.
2. Further, the defendants did not clearly articulate the novation argument until their written submissions were filed on 3 October 2025, only days before the hearing on 6 October 2025. This was a critical aspect of their defence to the application. The novation explained how debts originally owed by Norstar to Normet came to be owed to the R & J companies. Without understanding this novation, Maradox's confusion about the reference to 'unpaid dividends' is more understandable.
3. The defendants' conduct was not exemplary. Their use of the term 'unpaid dividends' was, as their senior counsel conceded, 'infelicitous'. Their failure to clearly articulate the novation basis for their claim until late in the litigation of the application contributed to uncertainty and complexity. Their approach to the disclosure of information, particularly Mr Valles' findings, was less than forthcoming.

D.1.3 Conclusion on whether costs should follow the event

1. Having weighed all these factors, I am satisfied that Maradox should pay the defendants' costs of the interlocutory application. The following considerations are determinative.
2. First, Maradox bore the onus in respect of its application at all times. It was required to establish a serious question to be tried, that the balance of convenience favoured the grant of relief, and that damages would not be an adequate remedy. It failed to discharge any part of that onus. Regardless of the defendants' conduct, Maradox needed to point to some proper legal or factual basis for its claim that the proposed payments should be restrained. It could not do so.
3. Secondly, the information available to Maradox before it commenced the application, and throughout the period it maintained the application, should have caused it to seriously question the viability of its case. Paul had been a director of Norstar for many years. He had signed financial statements recording the loan accounts. He had been involved in discussions about loan imbalances. While the defendants' conduct created some uncertainty about the precise basis of the claimed debts, Maradox was aware that substantial amounts were recorded as owing to the R & J companies in Norstar's financial statements, and that Paul had previously confirmed the accuracy of those statements.
4. Thirdly, the defendants were entitled to resist the application and to put Maradox to proof of its case. While it would have been preferable for the defendants to articulate their case more clearly and earlier, they were not obliged to do so. The onus was on Maradox to establish the elements of its claim for interlocutory relief.
5. Fourthly, the defendants' conduct, while contributing to the complexity and uncertainty, does not rise to the level of disentitling conduct such that they should be deprived of any part of their costs of the application. Disentitling conduct must be more serious than mere lack of clarity or full transparency. It must amount to conduct that is improper, misleading, or such as to significantly prejudice the opposing party's ability to present its case. The defendants' conduct does not reach that threshold.
6. In these circumstances, while I acknowledge the force of Maradox's submissions about the defendants' conduct, I am satisfied that the appropriate order is that Maradox pay the defendants' costs of and incidental to the interlocutory application. Maradox failed in its application, failed to establish a serious question to be tried, and bore the onus throughout. The defendants' conduct, while not exemplary, does not warrant any different outcome.

D.2 Should costs be taxed on an indemnity basis?

1. It is common ground between the parties that costs are to be taxed on a standard basis unless there are special circumstances justifying the exercise of the Court's discretion to make an award of costs on an indemnity basis.[12]
2. The categories of special circumstance are not closed,[13] but relevantly include where:[14]

(a) the applicant, properly advised, knew or should have known that it had no chance of success and yet persisted with its claim;[15]

(b) the application was made or continued in wilful disregard of known facts or clearly established law; [16] or

(c) the application was made or continued for an ulterior motive.[17]

1. There are legitimate criticisms to be made of Maradox's conduct. Paul had been a director of Norstar for many years and had signed financial statements recording the loan accounts owing to the R & J companies, confirming their accuracy through directors' declarations. This knowledge cannot be set aside, and Maradox should have carefully considered the strength of its case before commencing its application. In June 2024, Paul refused to engage with the defendants' accountant about loan imbalances, yet later commenced proceedings - an escalation that might have been avoided by constructive engagement. Maradox commenced its application on 11 June 2025, one day after being told the defendants sought loan repayments and not dividends. While this clarification did not provide full details, it did indicate the defendants were not asserting dividend rights. Maradox maintained its application through to October 2025 despite various clarifications, yet filed no accounting evidence at the hearing, suggesting it may not have had strong evidence from the outset. Further, Paul's attempt to draw down on the Davmas loan account while challenging the defendants' similar rights appears inconsistent and suggestive of an understanding that loan account arrangements were in place.

1. However, these criticisms must be weighed against significant aspects of the defendants' conduct that contributed to Maradox bringing and maintaining its application. The defendants' use of 'unpaid dividends' terminology was confusing given the R & J companies were not shareholders of Norstar, and created uncertainty about what was sought and on what legal basis. While the defendants' senior counsel conceded the description was 'infelicitous', this understates the problem created by that terminology.
2. Critically, the defendants did not clearly articulate the novation argument until their written submissions were filed on 3 October 2025, only days before the hearing. This was fundamental to understanding how Norstar became indebted to the R & J companies. Prior to this, the defendants had spoken of amounts being 'transferred' from Normet without clearly explaining the legal mechanism. The novation was not obvious from Norstar's financial statements alone and required detailed analysis by Mr Valles to explain and quantify. That Mr Valles, an experienced forensic accountant, described the transactions as 'complex' with each worked example taking 'days to prepare' demonstrates the genuine difficulty in understanding these matters. If a specialist required days per example, Maradox cannot be said to have acted unreasonably in questioning the validity of the debts, particularly given the confusing 'unpaid dividends' reference.
3. The defendants' approach to disclosure was also less than forthcoming. They refused Paul's request for Mr Valles's findings in July 2025. Raymond suggested in September 2025 that Lipins' investigation yielded little value, yet detailed affidavits from Ms Chisholm and Mr Valles were filed only days later. Throughout 2024 and 2025, despite repeated requests from Paul and his solicitors, the defendants did not clearly explain the legal basis for their claims. While the defendants were entitled to put Maradox to proof of its case, their failure to explain their own case more clearly contributed to the complexity and uncertainty that led to the litigation.

1. While aspects of Maradox's conduct can properly be criticised - its failure to engage constructively in mid-2024, its knowledge of the loan accounts from financial statements, its decision to proceed on 11 June 2025 despite some clarification, and its failure to file accounting evidence - these matters do not establish that Maradox commenced or continued the application in wilful disregard of known facts or when it should have known it had no chance of success.
2. The defendants' conduct, while not rising to disentitling conduct that would deprive them of their costs altogether, nonetheless contributed materially to the circumstances in which Maradox brought and maintained its application. The use of 'unpaid dividends' terminology, the late disclosure of the novation argument, the complex nature of the transactions requiring expert analysis, and the defendants' approach to disclosure all militate against a finding that Maradox's conduct was so unreasonable as to warrant indemnity costs.
3. This is not a case where an applicant persisted with a claim that was obviously hopeless or in wilful disregard of known facts. Rather, it is a case where an applicant brought an application based on genuine confusion about the legal basis for claimed payments, where that confusion was contributed to by the respondents' conduct, and where the application ultimately failed because the applicant could not discharge the onus of establishing a serious question to be tried. In such circumstances, standard costs are appropriate.
4. Accordingly, I decline to order that costs be assessed on an indemnity basis. The costs will be assessed on the standard basis.

1. The starting position under r 63.20.1 is that if an order for costs of an interlocutory application is made, those costs are not to be taxed until the proceeding in which the order is made is completed, unless the Court orders that the costs may be taxed immediately.
2. Hollingworth J summarised the policy reasons underlying this rule:[18]

The authorities suggest that there are a number of reasons why rules similar to r 63.20.1 have been introduced in other jurisdictions, including:

(a) Avoiding multiple taxations, and the attendant costs;

(b) Avoiding interlocutory applications being used as a means to exhaust the funds of an opposing party; and

(c) Avoiding unfairness in a case where, for example, a party who is ultimately successful is unable to set off their judgment against an earlier liability to pay costs.

1. The Court's discretion to order that the default position not apply is only confined by the principle that the discretion must be exercised judicially.[19] That said, the default position may be upset for one or more of the following reasons:[20]

(a) the issue the subject of the interlocutory order was discrete from what will finally require determination;

(b) the party against whom the substantive costs order is made engaged in unsatisfactory conduct, sometimes described as conduct involving a want of competence and diligence; or

(c) there is a prospect of considerable delay in completion of the proceeding.

D.3.1 Whether the interlocutory application is discrete from the proceeding

1. The first question is whether the issues determined in the interlocutory application are sufficiently discrete from the issues in the substantive proceeding such that immediate taxation is appropriate.
2. There are some indications that the issues may be discrete. The interlocutory application concerned the validity of loan accounts recorded in Norstar's financial statements and whether the defendants were entitled to cause Norstar to make payments in respect of those accounts. The defendants point to a report of Dawna Wright dated 2 December 2025, filed in a different proceeding (S ECI 2023 02770), in which Ms Wright is instructed to adopt the assumption that Norstar's accounts accurately record the loan accounts. If Maradox no longer disputes the validity of those loan accounts, then the issue determined in the interlocutory application may have no bearing on the ultimate outcome of the proceeding.
3. However, I am not persuaded that it is appropriate to reach this conclusion at this stage. Pleadings have not yet been filed in this proceeding. While the originating process filed by Maradox seeks various orders on the basis that there has been oppressive conduct, it is not yet clear precisely what allegations will be made and what issues will be in dispute. Maradox contends that the manner in which the defendants sought to pass the proposed resolution - including the use of 'unpaid dividends' terminology and the failure to adequately explain the basis for the claimed payments - forms part of its oppression case. If this is correct, then the conduct that was the subject of the interlocutory application may be directly relevant to the substantive proceeding.
4. Moreover, the defendants' reliance on Ms Wright's report is not determinative. That report was prepared for the purposes of a different proceeding and involved Ms Wright being instructed to adopt certain assumptions. The fact that an expert has been instructed to adopt certain assumptions for one purpose does not necessarily mean that Maradox has conceded those matters for all purposes in this proceeding. It is not uncommon for parties to instruct experts to adopt assumptions for the purposes of preparing a report, while reserving their position on whether those assumptions are correct. Without seeing the precise terms of Ms Wright's instructions and without the benefit of pleadings that clarify what is and is not in dispute, I cannot conclude that the validity of the loan accounts is no longer contested.
5. In these circumstances, it is premature to conclude that the interlocutory application is sufficiently discrete from the substantive proceeding to warrant immediate taxation. The prudent course is to await the filing of pleadings, which will clarify what issues are in dispute and whether the matters ventilated in the interlocutory application remain relevant to the substantive proceeding.

D.3.2 Whether there has been want of competence and diligence

1. For the same reasons that I have declined to order indemnity costs, I am not satisfied that Maradox's conduct reaches the threshold of want of competence and diligence that would justify immediate taxation.
2. While aspects of Maradox's conduct can be criticised, it is not a case where Maradox has acted in a manner that amounts to abuse of process or conduct designed to harass or exhaust the defendants. Maradox brought an application for interlocutory relief that ultimately failed. It failed in significant part because it could not discharge its onus of establishing a serious question to be tried. However, the circumstances in which it brought that application - including the confusing reference to 'unpaid dividends' and the late disclosure of the novation argument - mean that it cannot be said that bringing the application was so lacking in competence or diligence as to warrant the exceptional step of immediate taxation.
3. The concept of 'want of competence and diligence' in the context of r 63.20.1 refers to conduct that goes beyond mere failure in litigation. It encompasses conduct such as: bringing proceedings that are clearly hopeless; persisting with claims in wilful disregard of known facts; using interlocutory processes oppressively or for collateral purposes; or failing to conduct litigation in a reasonable and efficient manner. While Maradox's application ultimately failed, the circumstances do not establish conduct of this nature.
4. Moreover, the defendants' own conduct contributed to the complexity and uncertainty that led to the interlocutory application. While this conduct was not sufficient to deprive them of their costs or to warrant costs being in the cause, it is relevant to the question of whether Maradox's conduct was so deficient as to warrant immediate taxation. In a case where both parties' conduct has contributed to the circumstances giving rise to litigation, it would not be appropriate to characterise one party's conduct as demonstrating want of competence and diligence warranting immediate taxation.

D.3.3 Whether delay justifies immediate taxation

1. The defendants point to likely delay in the disposition of the proceeding by a year or more. While delay is a relevant consideration, it is not determinative, particularly where (as here) the relationship between the interlocutory application and the substantive proceeding has not been fully clarified.
2. Moreover, the defendants themselves contended for the matter to proceed by way of pleadings. While parties are entitled to seek appropriate procedural steps, they cannot then rely on the delay consequent upon those steps to justify immediate taxation. If the defendants sought a pleadings process that will take time, they must accept the consequences of that process, including that costs of the interlocutory application will ordinarily be taxed at the end of the proceeding.
3. There may be cases where delay is so substantial, and the interlocutory application so clearly discrete from the substantive issues, that immediate taxation is warranted to avoid prejudice to the successful party. However, this is not such a case. The anticipated delay of a year or more, while not insignificant, is not so extraordinary as to warrant departing from the usual position, particularly where pleadings have not yet been filed and the relationship between the interlocutory and substantive issues remains to be clarified.

1. Having considered all the relevant factors, I am not satisfied that this is an appropriate case for immediate taxation. The issues determined in the interlocutory application may or may not be discrete from the substantive proceeding - that question cannot be finally determined until pleadings are filed and the issues in dispute are clarified. Maradox's conduct, while unsuccessful, does not amount to want of competence and diligence of the nature that would justify immediate taxation. And while there may be delay in the disposition of the proceeding, that delay is not so substantial or so clearly attributable to Maradox's conduct as to warrant departing from the usual position.
2. The policy reasons underlying r 63.20.1, as identified by Hollingworth J in Dale, are relevant here. Ordering immediate taxation risks multiple taxations and attendant costs. It risks unfairness if Maradox ultimately succeeds in the substantive proceeding and is unable to set off its judgment against the costs liability. And it risks prejudicing Maradox by requiring it to pay costs immediately at a time when the relationship between the interlocutory application and the substantive proceeding has not been clarified.
3. Accordingly, the costs will be taxed at the conclusion of the proceeding, in accordance with the usual position under r 63.20.1.

1. I will make an order that plaintiff pay the first and second defendants' costs of and incidental to the plaintiff's interlocutory process dated 11 June 2025 (as amended on 25 June 2025) on a standard basis.

[1] Re Norstar Recycling Pty Ltd [2025] VSC 657 (Waller J) ('Re Norstar').

[2] The order of 11 June 2025 records that the defendants undertake that they will not, until the hearing and determination of the plaintiff's interlocutory application put a resolution to the board of Norstar which requires the company to pay moneys to the R & J companies in the amount of $25,517,399.60 or other amount in respect of 'unpaid dividends'.

[3] Artcraft Pty Ltd v Passingham (2022) 66 VR 214, 219-20 [31] (John Dixon J) ('Artcraft').

[4] Re Norstar [2025] VSC 657, [148] (Waller J).

[5] Re Norstar [2025] VSC 657, [41] (Waller J).

[6] Setka v Abbott (No 2) [2013] VSCA 376, [27] (Warren CJ, Ashley and Whelan JJA).

[7] Re Norstar [2025] VSC 657, [123], [126]-[127], [139]-[141] (Waller J).

[8] Dale v Clayton Utz (No 3) [2013] VSC 593, [13], [18] (Hollingworth J) ('Dale'); Murdoch v Private Media Pty Ltd (No 2) [2022] FCA 1607, [12] (Wigney J).

[9] Affidavit of Nancy Jacqueline Collins sworn 16 December 2025, [5]-[8].

[10] Dale [2013] VSC 593, [13] (Hollingworth J).

[11] Artcraft (2022) 66 VR 214, 219-20 [31] (John Dixon J).

[12] Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189, [7] (Harper J) ('Ugly Tribe').

1. [14] Banksia Securities Ltd v Insurance House Pty Ltd (Costs) [2020] VSC 234, [15(a)], [15(c)] (John Dixon J).

[16] Ugly Tribe [2001] VSC 189, [7(vi)] (Harper J).

[18] Dale [2013] VSC 593, [58].

[19] Setka v Abbott (No 2) [2013] VSCA 376, [27] (Warren CJ, Ashley and Whelan JJA).

[20] Ibid; Dale [2013] VSC 593, [65] (Hollingworth J).