Knight Frank Australia Pty Ltd v Paley Properties Pty Ltd

This case concerned a costs appeal before the Full Court of the Supreme Court of South Australia, involving Knight Frank Australia Pty Ltd (Knight Frank) and Paley Properties Pty Ltd (Paley Properties). The underlying dispute, which had been the subject of a trial, involved the sale of a commercial property. While the primary dispute between the parties was not the focus of this appeal, the court was required to determine the appropriate costs orders arising from that trial, particularly concerning the liabilities between Knight Frank and Paley Properties in relation to costs ordered in favour of third parties, De Chellis Homes and Richard De Chellis.

The central legal issues before the Full Court were whether the trial judge had erred in her costs orders, specifically in relation to Paley Properties' application for its costs against Knight Frank, and whether the court should depart from the usual rule that costs follow the event. The parties sought "Bullock orders" against each other, which are orders where a defendant who has incurred costs in defending a claim brought by a third party, and who is entitled to costs against the plaintiff, can recover those costs from the plaintiff. In this context, the appeal focused on the allocation of liability for costs between Knight Frank and Paley Properties, particularly in light of their respective conduct and the orders made in favour of the De Chellis parties.

The Full Court found that the trial judge had failed to address Paley Properties' application for its costs against Knight Frank. The court noted that both Knight Frank and Paley Properties were seeking Bullock orders against each other concerning their respective liabilities to the De Chellis parties. The court applied the general principle that costs follow the event, but also considered the conduct of the parties in determining whether to depart from this rule or to order costs on an indemnity basis. The court ultimately remitted the matter back to the trial judge to determine the outstanding costs issues, including Paley Properties' application for its costs against Knight Frank and the appropriate basis for any such orders.