Milfoil Pty Ltd v Commonwealth Bank of Australia (No 2)

Milfoil Pty Ltd, a small business, brought an action against the Commonwealth Bank of Australia seeking relief from certain contractual obligations and damages for misrepresentation and breach of fiduciary duty. The dispute was heard in the Supreme Court of New South Wales. The Court was required to determine whether the successful defendant, the Commonwealth Bank, was entitled to any of its costs of the proceeding. The Court also had to decide whether the Bank's conduct at trial, specifically challenging the credit of the plaintiff's witnesses, warranted a reduction in any costs awarded. Additionally, the Court examined whether the plaintiff had unreasonably failed to accept an offer of compromise, and if so, whether indemnity costs were appropriate. Finally, the Court considered whether the counsel's fees in excess of the scale should be allowed, based on any special grounds arising out of the nature or difficulty of the proceeding.

The Court found that the Commonwealth Bank's conduct at trial did not warrant a reduction in its entitlement to costs. The plaintiff's failure to accept an offer of compromise was deemed unreasonable, and indemnity costs were awarded to the Bank. The Court concluded that no special grounds existed to justify an increase in the counsel's fees beyond the scale. The reasoning behind these decisions was based on a thorough examination of the conduct of both parties, the procedural history of the case, and the specific provisions of the Supreme Court (General Civil Procedure) Rules 2015.

The Supreme Court of New South Wales ruled that the Commonwealth Bank was entitled to its costs of the proceeding, without any reduction. Indemnity costs were also awarded to the Bank due to the plaintiff's unreasonable refusal to accept an offer of compromise. The Court found that no special grounds existed to allow for an increase in the counsel's fees beyond the scale. The final orders reflected these decisions, with the plaintiff ordered to pay the defendant's costs of the proceeding, including indemnity costs, and the defendant's counsel's fees were to be limited to the scale unless special grounds were established in a subsequent application.