Dylan Mann and Co Pty Ltd as trustee for the Mann Family Trust v Tiejag Pty Limited as trustee for the Skeihy Khoury Family Trust (No 2)

In the Federal Circuit and Family Court of Australia, the case of Dylan Mann and Co Pty Ltd as trustee for the Mann Family Trust versus Tiejag Pty Limited as trustee for the Skeihy Khoury Family Trust (No 2) was heard. The dispute involved a claim by the Mann Family Trust against Tiejag Pty Limited regarding an agreement and subsequent actions relating to the sale of property. The core issue was whether the plaintiff was entitled to certain costs and whether the general principle that costs follow the event should be applied in a particular manner.

The central legal issue was the allocation of costs between the parties, particularly given an agreement between them to deviate from the standard party/party costs rule. The court needed to determine whether the agreement, which stipulated that the parties would bear their own costs, was valid and enforceable. Furthermore, the court had to consider the principles governing the discretion to deviate from the general rule and whether the circumstances of the case warranted such a departure.

The court examined the nature of the agreement between the parties and found that it was a clear and unambiguous agreement to bear each party's own costs. The court held that the agreement was valid and enforceable, and thus, the general principle that costs follow the event did not apply. The court exercised its discretion to allow the parties to bear their own costs, in line with the agreement, and dismissed the plaintiff's application for an order that the defendant pay the plaintiff's costs. The court concluded that the parties had the freedom to agree on the basis on which costs would be borne, and this agreement should be respected.

In summary, the court upheld the agreement between the parties to bear their own costs, deviating from the general rule. The court dismissed the plaintiff's application for costs, confirming that the agreement was valid and that the parties were bound by its terms. This decision reinforces the principle that parties can agree to a different basis for cost allocation, provided the agreement is clear and unambiguous.