Lahdo v Spearwood Holdings (WA) Pty Ltd (No.2)

In the matter of *Lahdo v Spearwood Holdings (WA) Pty Ltd (No.2)*, heard in the Supreme Court of Western Australia, the dispute concerned an application by the plaintiff, Mr Lahdo, for an order that the defendant, Spearwood Holdings (WA) Pty Ltd, pay the plaintiff's costs of the proceeding on an indemnity basis. This application followed an earlier decision where the plaintiff had been successful in obtaining judgment against the defendant.

The central legal issue before the Court was whether the defendant's conduct warranted an order for indemnity costs, rather than the usual order for party-and-party costs. Specifically, the Court had to consider whether the defendant's conduct in defending the proceeding was unreasonable to such a degree as to justify departing from the ordinary rule.

Judge Antoni Lucev reasoned that an award of indemnity costs is an exceptional remedy, reserved for cases where a party's conduct has been vexatious, meritless, or otherwise unreasonable. His Honour reviewed the defendant's conduct throughout the litigation, including its approach to settlement offers and the manner in which it conducted its defence. The Court applied the principles established in cases such as *O'Callaghan v Loder* and *H v Royal Australian Air Force* which outline the circumstances in which indemnity costs may be awarded, focusing on whether the defendant's actions had unnecessarily prolonged the litigation or caused the plaintiff to incur costs that would otherwise have been avoided.

The Court ultimately ordered that the defendant pay the plaintiff's costs of the proceeding on a party-and-party basis, with the exception of certain specified costs which were to be paid on an indemnity basis.