McGrath v Mestousis (No 2)

The matter of McGrath v Mestousis (No 2) involved the applicant, McGrath, seeking to impose an easement over the land owned by Mestousis. The application was heard by the Supreme Court of New South Wales, with Justice Lee presiding. The dispute arose from McGrath's need for an easement to access a portion of Mestousis' land, necessary for the development of McGrath's property. Mestousis opposed the application, arguing that the easement was not necessary and that it would cause significant harm to his property.

The primary legal issue before the court was whether the ordinary rule, which mandates the applicant to bear the defendant's costs of the proceedings, should be departed from due to the unreasonable conduct of the defence. The court was tasked with assessing whether Mestousis' conduct during the proceedings was such that it warranted a departure from the standard cost-bearing rule. This included an evaluation of the nature and extent of Mestousis' opposition, and whether it was reasonable in the circumstances.

Justice Lee found that Mestousis' conduct during the proceedings was indeed unreasonable, particularly in the manner in which he had resisted the application for the easement. The judge detailed several instances of Mestousis' conduct, including the filing of unnecessary and vexatious documents, and the making of unfounded allegations against McGrath. Based on these findings, the court ruled that a departure from the ordinary rule of costs was warranted. Consequently, McGrath was awarded costs on an indemnity basis, meaning Mestousis was ordered to pay McGrath's costs, including those incurred due to his unreasonable conduct. The final orders of the court directed Mestousis to pay the costs of McGrath on an indemnity basis, reflecting the unreasonableness of his conduct throughout the proceedings.