Milicevic v Ferrari East Pty Limited (No 2)

The appeal in Milicevic v Ferrari East Pty Limited (No 2) was heard by the Supreme Court of New South Wales. The appeal arose from a dispute between the plaintiff, Milicevic, and the defendant, Ferrari East Pty Limited, regarding a vehicle sale. The plaintiff sought to reopen proceedings that had been previously dismissed. The defendant opposed the application on the basis that it was an abuse of process and also sought indemnity costs for the application. The primary issue before the court was whether the costs of the application for leave to reopen should be awarded on an ordinary or indemnity basis.

The court considered whether there was any principle or exceptional circumstances that would warrant an indemnity costs order. It was noted that the application was not an abuse of process, but rather an honest attempt to challenge the original dismissal. The court acknowledged that the application was unsuccessful, but found no issue of principle that would justify an indemnity costs order. The court emphasised that indemnity costs are reserved for cases where there has been a significant departure from what an ordinarily prudent litigant would do. The court held that the application, while ultimately unsuccessful, did not reach that level of impropriety.

Consequently, the court determined that the costs of the application for leave to reopen should be awarded on an ordinary basis. The court did not find any exceptional circumstances or issues of principle that would warrant an indemnity costs order. This decision highlights the need for a high threshold to be met for indemnity costs to be awarded, and that such orders are reserved for cases where there has been a significant departure from what an ordinarily prudent litigant would do. The court's decision ensures that unsuccessful applications for leave to reopen are not automatically subject to indemnity costs.