Guest v Guest (No 2)

The case of Guest v Guest (No 2) involved a dispute between the parties over a pre-action discovery application. The applicant sought information from the prospective defendant in order to determine whether to proceed with litigation. The matter was heard in the Supreme Court of New South Wales. The primary legal issue before the court was the exercise of its discretion regarding the costs associated with the pre-action discovery application and the costs of compliance with the discovery order. Specifically, the court had to determine whether the adversarial rule that the costs of such an application should follow the event should apply, and whether the reasonableness of the resistance to the application would influence the outcome. Additionally, the court considered whether the approach of deferring the costs and expenses of compliance with the discovery order to any subsequent substantive action should be followed.

The court held that the adversarial rule regarding costs following the event did not apply in this case. Instead, the court considered the reasonableness of the prospective defendant's resistance to the application. In this instance, the court found that the resistance was not reasonable, and therefore, the adversarial rule did not apply. Furthermore, the court rejected the approach of deferring the costs and expenses of compliance with the discovery order to any subsequent substantive action. The court held that it was appropriate to determine the costs of the pre-action discovery application and the costs of compliance with the discovery order at the time of the application itself. The court based its decision on the need to ensure that parties are not unduly burdened by unexpected costs and that the costs of litigation are appropriately allocated.

The court ultimately granted the pre-action discovery application in part and ordered the prospective defendant to provide certain information to the applicant. The court also ordered the prospective defendant to pay the applicant's costs of the pre-action discovery application and the costs of compliance with the discovery order. The court found that the prospective defendant's resistance to the application was not reasonable, and therefore, the adversarial rule did not apply. The court also considered the need to ensure that parties are not unduly burdened by unexpected costs and that the costs of litigation are appropriately allocated. The court's decision provides guidance on the exercise of discretion regarding costs in pre-action discovery applications and the approach to be taken when considering the costs of compliance with a discovery order.