Damien v Combined Home Loans Pty Limited (No 2)

In Damien v Combined Home Loans Pty Limited (No 2), the court was called to address issues of costs in a proceeding that involved the plaintiff seeking rectification of a judgment. The nature of the dispute was a claim by the plaintiff for the rectification of a prior court order to reflect an agreement that had been reached between the parties. The matter was heard in the Supreme Court of New South Wales. The defendants did not oppose the rectification but also did not consent to it. Despite this, they appeared by counsel, adduced evidence, and made submissions on the matter of costs.

The primary legal issue before the court was whether the defendants' participation in the proceedings, despite not opposing the rectification, warranted a different costs outcome than if the plaintiff had successfully argued against the defendants' opposition. The court had to determine if the defendants' level of involvement in the proceedings was sufficient to alter the usual rule that the losing party bears the costs of the proceeding. The court considered that the defendants' decision to participate actively in the proceedings, albeit without opposing the rectification, meant that they were not entirely passive in the matter.

The court reasoned that the defendants' active participation in the matter, including appearing by counsel and presenting evidence, constituted a significant involvement in the proceedings. Despite the defendants not opposing the rectification, their choice to engage in the litigation process meant that they could not be considered as having merely acquiesced to the plaintiff's request. Given the extent of their involvement, the court held that it was appropriate for each party to bear its own costs. This decision underscored that the defendants' level of engagement was a matter of their own choosing, and thus they should not be absolved of the financial responsibility for their participation in the litigation.

The court's final orders were that each party bear its own costs from the time of the application for rectification onwards. This outcome reflected the court's view that the defendants' decision to actively participate in the proceedings, despite not opposing the rectification, warranted an equitable distribution of costs.