Laverick v Westpac Banking Corporation (No 2)

In Laverick v Westpac Banking Corporation (No 2), the plaintiff, Laverick, brought proceedings against the defendant, Westpac Banking Corporation, in the Supreme Court of New South Wales. The dispute centred on the enforceability of a guarantee provided by the plaintiff for a loan made by the defendant to a third party. The defendant applied to set aside the claim or, in the alternative, to strike out the statement of claim. The court was required to determine the appropriate exercise of discretion in awarding costs associated with this application.

The primary legal issue before the court was the general principles governing the award of costs when an application to set aside a claim or to strike out a statement of claim is made. The court considered whether the plaintiff’s claim was frivolous or vexatious, as well as the circumstances under which costs should be awarded against the plaintiff. The court also needed to assess the proportionality of the costs incurred by the defendant in response to the plaintiff’s application and the merit of the application itself.

In delivering the judgment, the court found that the plaintiff’s claim was not frivolous or vexatious. However, it also found that the plaintiff had failed to make a serious attempt to prosecute or defend the claim. The court exercised its discretion under the general rule that costs follow the event, concluding that the plaintiff should bear 70% of the defendant’s costs of the application filed on 11 September 2020. The court determined that this proportion reflected the overall circumstances and the degree to which the plaintiff's conduct warranted a costs penalty.

The court ordered that the plaintiff pay 70% of the defendant’s costs of the application filed on 11 September 2020, assessed on the standard basis. The decision underscores the importance of diligence in prosecuting or defending claims, and the court's willingness to impose costs where the conduct of a party falls short of the required standards.