Malek Fahd Islamic School Limited v The Australian Federation of Islamic Councils Inc (No 2)

In Malek Fahd Islamic School Limited v The Australian Federation of Islamic Councils Inc, the dispute centred on the apportionment of costs between the parties, particularly in relation to the costs incurred from the preparation of an expert report and the acceptance of a Calderbank offer. The case was heard in the Supreme Court of New South Wales. The plaintiff, Malek Fahd Islamic School Limited, sought costs from the defendant, The Australian Federation of Islamic Councils Inc, regarding the legal proceedings and the unsuccessful expert report. The defendant, in turn, argued that the costs should not be apportioned as claimed by the plaintiff due to various factors, including the failure of the expert report to meet the required standard of independence and the reasonableness of the plaintiff's acceptance of a Calderbank offer.

The court had to determine the principles governing the apportionment of costs between the parties, specifically in relation to the costs of preparing an expert report that did not meet the independence requirements of the Uniform Civil Procedure Rules 2005 (NSW) and the acceptance of a Calderbank offer. Additionally, the court needed to assess the reasonableness of the plaintiff's decision to accept the Calderbank offer and the date from which indemnity costs should be calculated.

The court held that the general rule that costs follow the event applied in this case. It found that the plaintiff's expert report failed to meet the required standard of independence, leading to an unjustifiable increase in costs. Consequently, the defendant was not liable for those costs. Regarding the Calderbank offer, the court determined that the plaintiff's acceptance was reasonable, and indemnity costs should be calculated from the date of the offer, not the date of judgment. The court ultimately apportioned the costs between the parties, taking into account the various factors and the principles of cost apportionment.

The final orders of the court required the defendant to pay a specified proportion of the costs associated with the expert report and the Calderbank offer, reflecting the court's determination on the reasonableness of the plaintiff's actions and the principles of cost apportionment.