Victorian Xray Group (Dandenong) Pty Ltd v Malouf t/a Malouf Solicitors (No. 5)

“The costs of and incidental to the application to vary the costs order in the notice of motion filed 12 February 2025 be reserved, to be determined upon the final judgment of the Court of Appeal”.

6. In making this application, they rely on a number of matters including that:

(i) they were confused by the original order granting liberty to apply. (ii) there is a degree of unfairness and injustice in the result of the original application to vary the costs order in that the plaintiffs were barred from bringing that application after the expiry of 14 days after the judgment. (iii) a costs order is discretionary and, having regard to the issues of unfairness and confusion created by the original order granting liberty to apply, the discretion should be exercised in favour of the plaintiffs. (iv) the plaintiffs acted reasonably as they thought they had liberty to apply irrespective of the time limitation provided by Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) r 36.16. (v) my comment in my judgment on their motion to the effect that “unconstrained by authority, the submissions made on behalf of the plaintiffs might have had some attraction” should be accepted as meaning that they acted reasonably in pursuing the motion, despite UCPR r 36.16.

7. The plaintiff submits that when confusion (meaning their confusion) arises from the terms of an order and both parties act reasonably, the Court is entitled to and should depart from the usual order that “costs follow the event”.

8. The defendant submits that, even if a view might be taken that the plaintiffs acted reasonably and thought that they could apply for a variation of the costs order at any time, this is no basis for denying the successful party a costs order in his favour. Further, he submits that my observation (“unconstrained by authority”) was merely a reflection of the reality of the situation and the strength of the defendant’s arguments.

9. The point emphasised by the defendant on the hearing to vary the original costs order, and in writing in response to the plaintiffs’ current application and in correspondence passing between the defendant and the plaintiffs months before the hearing in April 2025, is that the Court of Appeal had consistently rejected the arguments advanced by the plaintiff on their application to vary the costs order.

Determination

10. I do not accept the plaintiffs’ submissions. In my view, having heard and determined the plaintiffs’ application, I should make an appropriate costs order in respect of that application as I did so.

11. It may be that in some circumstances the reasonableness of the parties’ conduct is a relevant factor in determining the appropriate costs order. However, having an arguable case (if that is what is asserted in respect of the motion), is hardly sufficient to displace the ordinary rule in awarding costs. If it were to the contrary, the court would always be required to embark on an inquiry as to whether, given different findings and legal principles, the relevant party might have won.

12. The fact that the plaintiffs might have been successful absent authority which did not support their arguments or that they might succeed in the Court of Appeal or that they say they were confused by the original granting of liberty to apply, are not matters which should cause me to defer making a costs order on the conclusion of the application.

13. Costs should follow the event, and nothing said by the plaintiffs causes me to alter that approach. Nor am I persuaded that there is any reason to simply reserve the question of costs, pending the outcome of the appeal. All that would do would be to shift the burden to the Court of Appeal or cause me to revisit the question at a later time. Of course, nothing I say prevents the plaintiffs from pursuing their appeal even in respect of the costs order.

14. In the circumstances, I reject the plaintiffs’ application to vary the costs order I made on 14 April 2025.

15. I note that this further application was dealt with on the papers and by way of written submissions. The cost of the submissions form part of the application determined on 14 April 2025. Those costs fall within the costs order made on that day, being the plaintiffs are to pay the defendant’s costs.

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