Australia & New Zealand Banking Group Ltd v Alirezai (No 2)

In the matter of Australia & New Zealand Banking Group Ltd v Alirezai (No 2), the court dealt with an issue concerning indemnity costs following the plaintiff's success on both their claim and counterclaim. The dispute involved the plaintiff, Australia & New Zealand Banking Group Ltd, and the defendant, Alirezai. The plaintiff sought indemnity costs under the Uniform Civil Procedure Rules (UCPR) after successfully prosecuting a claim and defending a counterclaim. The primary legal issues the court needed to resolve were whether the plaintiff was entitled to indemnity costs pursuant to r 360 UCPR for both the claim and counterclaim, and whether the judgment obtained was no less favourable than any offer to settle made by the parties.

The court examined the relevant rules and case law, including the decision in Smith v Madden, which established the principle that indemnity costs could be awarded in exceptional circumstances. The court noted that the plaintiff had indeed been successful on both the claim and counterclaim, which typically entitles the plaintiff to costs under r 360 UCPR. However, the court held that it was not appropriate to order indemnity costs under either r 360 or r 361 UCPR in this instance. The reasoning behind this decision was that the plaintiff had not met the threshold for exceptional circumstances, and the judgment obtained was not significantly more favourable than the offers to settle that had been made.

As a result, the court ordered that the defendant pay the plaintiff's costs, including reserved costs, of the claim to be assessed, and that the plaintiff pay the defendant's costs, including reserved costs, of the counterclaim to be assessed. This decision highlights the importance of the specific circumstances of each case when determining the appropriate costs order, particularly in relation to indemnity costs.