LFDB v SM (No 2)

In LFDB v SM (No 2), the applicants sought indemnity costs and the respondent applied for a variation of the existing costs orders. The case was heard in the Federal Court of Australia. The applicants argued that the outcome of the proceedings was inevitable and sought indemnity costs, contending that the respondent's failure to consent to the orders sought was contrary to the Federal Court of Australia Act 1976 (Cth), s 38N(1). The respondent argued that the applicants had not pursued their application for a stay of enforcement of the registrations, and that she had enjoyed partial success in the proceedings.

The court considered whether the applicants' action had no prospect of success, and whether the respondent's failure to resolve the proceedings contravened s 38N(1). The court found that the applicants' decision to put detailed submissions to the court concerning alternative bases to justify their case demonstrated that they did not consider the outcome to be inevitable. The court also found that the issue of whether the New Zealand proceeding should be characterised as proceedings in rem was not argued in detail and that the applicants acknowledged in their written submissions that there was authority to the contrary of their contention in relation to arguably analogous Australian proceedings.

The court concluded that there was no reason to depart from the usual rule that costs follow the event. The court found that the applicants did not offer to resolve the proceedings on the basis of any compromise, and that the respondent's failure to consent to the orders sought was not a matter warranting a departure from the usual rule. The court also found that the respondent did not contravene s 38N(1) in the manner in which she conducted the proceedings.

The court dismissed each application and ordered that each party bear its own costs of the costs applications.