Drummond v Davidson and Drummond v National Trade & Finance Co Pty Ltd as trustee for the Monaghan Property Trust (No 2)

In Drummond v Davidson and Drummond v National Trade & Finance Co Pty Ltd as trustee for the Monaghan Property Trust (No 2), the court was called upon to determine the costs associated with unsuccessful applications for a permanent stay of proceedings brought by the defendants. The dispute involved a complex interplay of legal claims and counterclaims, with the defendants seeking a permanent stay of the proceedings initiated by the plaintiff. The proceedings took place in a court of law, with the primary focus on the appropriate allocation of costs in light of the unsuccessful application for a permanent stay.

The legal issues at the heart of the case revolved around the principles governing the allocation of costs in civil proceedings, particularly in the context of unsuccessful applications for a permanent stay. The defendants argued for the costs of the unsuccessful stay application to be reserved or allocated to the parties themselves, while the plaintiff contended that costs should follow the event, meaning the unsuccessful party should bear the costs. The central question for the court was whether the principles applicable to an unsuccessful summary judgment application could be analogously applied to an unsuccessful permanent stay application.

The court found that the principles governing costs in unsuccessful summary judgment applications could indeed be applied to unsuccessful permanent stay applications. In doing so, the court underscored that the fundamental principle is that costs generally follow the event, meaning the party who is unsuccessful in their application should bear the costs. Given that the defendants' application for a permanent stay was dismissed, the court held that they should bear the costs of the unsuccessful applications. Consequently, the defendants were ordered to pay the plaintiff’s costs of each application on the standard basis.