In the matter of Kevin Jacobsen Pty Limited (receivers and managers appointed) (in liquidation)

The case involved Kevin Jacobsen Pty Limited, which was in liquidation, and the liquidators sought indemnity costs from the respondents in relation to an order for production and an argument concerning legal professional privilege. The matter was heard in the Federal Court of Australia. The liquidators applied for costs arguing that the respondents had no real prospect of successfully defending the application for an order of production and no real prospect of succeeding in their argument about legal professional privilege. They sought indemnity costs based on the principle that costs should follow the event.

The court had to determine whether indemnity costs were appropriate in circumstances where there had been no adjudication on the merits. The court considered the principle that costs should follow the event and the circumstances under which indemnity costs may be awarded. It examined whether the liquidators had a strong case for the order for production and whether the respondents' argument about legal professional privilege was frivolous or vexatious.

The court held that indemnity costs could be awarded when the party against whom the costs were claimed had no real prospect of successfully defending the application or argument. The court found that the liquidators had a strong case for the order for production, and the respondents' argument about legal professional privilege was without merit. The court concluded that the liquidators were entitled to indemnity costs as the respondents had no real prospect of success and their argument was frivolous.

The court ordered the respondents to pay the liquidators' costs of the application for indemnity costs on an indemnity basis. This included the costs of the application for the order for production and the argument regarding legal professional privilege. The court emphasised the importance of ensuring that costs follow the event and that parties act reasonably in bringing and defending proceedings.