ACN 074 971 109 Pty Ltd (as Trustee for the Argot Unit Trust) and Pegela Pty Ltd v The National Mutual Life Association of Australasia Ltd (No 2)

The case involved a dispute between the plaintiffs, ACN 074 971 109 Pty Ltd and Pegela Pty Ltd, and the defendant, The National Mutual Life Association of Australasia Ltd. The plaintiffs sought damages for unconscionable conduct, claiming they were entitled to reimbursement for borrowing expenses, costs reasonably incurred in maintaining investments, and management fees. The dispute was heard and determined in the Supreme Court of Victoria.

The court was required to decide several legal issues, including the scope of damages available for unconscionable conduct, the discretion of the court to award costs, and the effect of settlement offers on the outcome. Specifically, the court had to determine whether the plaintiffs were entitled to the costs they claimed, how the court should evaluate the real degrees of success and failure of the parties at trial, and whether the defendant had a prima facie entitlement to indemnity costs. The court also had to consider whether it was unreasonable for the plaintiffs to refuse settlement offers and the impact of payment of costs by a non-party.

The court found that the plaintiffs were entitled to some of the expenses claimed, but not all. The court also found that the plaintiffs had a nominal success at trial but did not have a real success. The court held that the defendant had a prima facie entitlement to costs, but the plaintiffs’ refusal to accept settlement offers could be considered in determining the costs award. The court further held that the defendant was not entitled to indemnity costs and that the payment of costs by a non-party did not affect the court’s discretion. The court ordered the plaintiffs to pay the defendant’s costs of the appeal and the trial.

The final orders of the court included that the plaintiffs were to pay the defendant’s costs of the appeal and the trial, with certain exceptions. The court also ordered that the plaintiffs were entitled to recover certain expenses from the defendant, but not all of the expenses claimed. The court further ordered that the defendant was not entitled to indemnity costs and that the payment of costs by a non-party did not affect the court’s discretion. The outcome of the case provides guidance on the scope of damages available for unconscionable conduct and the court’s discretion in awarding costs.