Dalma Formwork (Australia) Pty Ltd v Maricic (No 3)

The appeal in *Dalma Formwork (Australia) Pty Ltd v Maricic (No 3)* concerned the appropriate costs order following a District Court proceeding. The dispute arose from an offer of compromise made by the defendants under the then-applicable District Court Rules. However, during the course of the proceedings, the Uniform Civil Procedure Rules (UCPR) came into force, introducing different consequences for a plaintiff who failed to accept an offer of compromise and did not achieve a better outcome at trial. The primary issue was how these rule changes affected the costs order.

The court was required to determine whether the District Court judge had erred in exercising their discretion regarding costs. Specifically, the court had to consider whether the judge correctly applied the UCPR, or if they had made an order as if the old District Court Rules still applied. A key consideration was whether the fact that the costs awarded to the defendants would substantially eat up the damages awarded to the plaintiff was a relevant factor in the exercise of discretion under the UCPR, and whether the judge had the power to dispense with the application of the UCPR or make an alternative order.

The Court of Appeal found that the judge had miscarried in their discretion by failing to properly apply the UCPR. The court reasoned that the UCPR, having come into force, governed the costs consequences. The judge's decision to proceed as if the old rules applied was an error. The court allowed the appeal, setting aside the original costs order.

The substantive order was varied to reflect that the second and third defendants were to pay the plaintiff's costs up to 28 August 2004, and the plaintiff was to pay the second and third defendants' costs thereafter. These costs were to be assessed on a party and party basis. The applicants were also awarded their costs of the application for leave to appeal and the appeal itself, with a certificate granted under the Suitors Fund Act.