Lynch v Bredbo Pty Ltd (No 2)

The case of Lynch v Bredbo Pty Ltd (No 2) involves a dispute concerning the allocation of costs in proceedings brought by IAL against Bredbo Pty Ltd and another individual, Mr Streeter. The dispute ultimately reached the court regarding the application for indemnity costs for the entirety of the proceedings, a departure from the usual rule that costs follow the event. The matter was heard in the Supreme Court of New South Wales.

The primary legal issue before the court was whether the conduct of Mr Streeter, specifically his fraud, warranted an order for indemnity costs for the entire proceedings. Indemnity costs are an exceptional remedy, typically awarded in cases of reprehensible conduct. The court had to weigh the conduct of Mr Streeter against the general principles governing costs in litigation, particularly whether his fraudulent actions justified such a departure from the usual cost rules.

In considering the application, the court noted the significant fraud committed by Mr Streeter, which included misrepresentations and deceit that led to the proceedings. The court concluded that his conduct was sufficiently egregious to warrant the exceptional remedy of indemnity costs. The court found that the award of indemnity costs was necessary to ensure that IAL, the innocent party, was not left to bear the burden of the costs resulting from Mr Streeter's fraudulent actions. Consequently, the court ordered that Mr Streeter pay the costs of the proceedings incurred by IAL on an indemnity basis, including any costs arising from a consent order made previously.

The final order mandates that Mr Streeter is to pay the costs of the proceedings incurred by IAL, on an indemnity basis, pursuant to section 98 of the Civil Procedure Act 2005 (NSW). This includes any costs payable by IAL as a result of the consent order made on 18 October 2024.