D & D (Costs)

The Full Federal Court considered an appeal concerning the costs of interlocutory proceedings in a matter between D & D (Costs) and an unnamed respondent. The dispute revolved around the appropriate order for costs following an earlier interlocutory application.

The primary legal issue before the Full Federal Court was whether the primary judge had erred in principle in making a costs order that effectively required the unsuccessful party to pay the successful party's costs on an indemnity basis, rather than the usual party-and-party basis. The court was asked to determine the circumstances under which an indemnity costs order might be justified in interlocutory proceedings.

The Full Federal Court reasoned that while indemnity costs are generally reserved for exceptional circumstances, such as misconduct or vexatious litigation, they can be awarded where a party has acted unreasonably in the conduct of litigation. In this instance, the court found that the primary judge had not erred in principle by awarding indemnity costs, as there were sufficient grounds to conclude that the unsuccessful party's conduct warranted such an order. The court affirmed that the discretion to award indemnity costs was properly exercised.