Byrne v Turner Freeman Lawyers (No 2)

The proceedings concerned an application by the first respondent, Turner Freeman Lawyers, for an order that the appellant, Byrne, pay their costs of an appeal on an indemnity basis. The appeal itself had been dismissed by the Court of Appeal of the Supreme Court of New South Wales on the basis that it had no reasonable prospects of success. The primary dispute before Mitchelmore JA was the appropriate basis for quantifying the costs order to be made in favour of the second respondent.

The legal issues before the Court were whether the costs of the appeal should be ordered on an indemnity basis, and whether a personal costs order should be made against the appellant. The Court was also required to consider whether to order a gross sum for costs.

Mitchelmore JA determined that the appeal had no reasonable prospects of success, which was a significant factor in considering an indemnity costs order. The Court applied the principles governing indemnity costs, which are generally awarded in circumstances where a party has acted unreasonably or vexatiously, or where there are other exceptional circumstances justifying such an order. In this instance, the lack of reasonable prospects of success for the appeal was considered a sufficient ground to depart from the usual basis of party-and-party costs. The Court also considered the criteria for making a personal costs order, which typically involves misconduct or a lack of reasonable grounds for bringing or defending proceedings.

The Court varied the previous order to specify that the costs of the second respondent were to be paid on an indemnity basis. However, each party was ordered to bear its own costs of the applications to vary the earlier order.