Formequip Pty Ltd v Nahas Construction Pty Ltd acting as Trustee for the Nahas Family Trust

The matter of Formequip Pty Ltd versus Nahas Construction Pty Ltd acting as Trustee for the Nahas Family Trust was before the court, where Formequip sought an order for costs following the resolution of a dispute involving conversion and detinue. The core issue centred on whether either party exhibited such unreasonable behaviour in the conduct of the proceedings that costs should be awarded against them. The dispute arose from the retention of goods by Nahas Construction, which Formequip claimed as their property, leading to legal action. However, after the proceedings commenced, the goods were returned, and Formequip abandoned their claim for damages, resulting in the proceedings being resolved without a cross-claim.

The court examined the reasonableness of initiating and continuing the legal action by both parties. It considered whether Formequip's decision to pursue the matter was justified given the return of the goods, and if Nahas Construction's retention and eventual return of the goods constituted unreasonable behaviour. The court determined that both parties exhibited unreasonable conduct, with Formequip for continuing the action after the goods were returned and Nahas Construction for initially withholding the goods. Given the mutual unreasonableness, the court concluded that no party was entitled to an order for costs.

Ultimately, the court found that neither party was justified in their actions to such an extent that the other party should bear the costs of the proceedings. Both parties contributed to the unreasonable continuation of the dispute, leading the court to make no order for costs against either party. The decision underscored the importance of evaluating the conduct of both parties in the context of the resolution of the dispute, particularly when both parties exhibit unreasonable behaviour.