In the matter of Platypus Impact Housing Australia Limited (No 2)

Platypus Impact Housing Australia Limited (Platypus) brought proceedings against the Australian Taxation Office (ATO) seeking a declaration that the ATO's interpretation of certain provisions of the Income Tax Assessment Act 1997 was incorrect. The case was heard in the Federal Court of Australia. The primary legal issues were whether the general rule that costs follow the event applied and if the Beoco principle was relevant. Platypus argued that the ATO's interpretation led to an unjust result, and the court needed to decide whether the general rule should be departed from given the mixed outcome of the case.

The court considered the Beoco principle, which allows for a departure from the general rule in cases of a mixed outcome. However, it held that Platypus's decision not to adjourn the proceedings was a neutral factor. The court found that Platypus was not required to elect between forms of relief until trial, and the election did not meaningfully alter the case to be answered by the ATO. Furthermore, the ATO would not have adopted a different approach even if Platypus had elected differently. The court concluded that there was no reasoned basis for departing from the general rule that costs follow the event.

As the general rule prevailed, the ATO was ordered to pay Platypus's costs. The court did not consider the section 459M conditioning order to be a dominant or separable issue. Therefore, the ATO was liable for the costs of the proceedings.