Mitchell v Roads and Maritime Services (now known as Transport for NSW) (No 3)

In Mitchell v Roads and Maritime Services (now known as Transport for NSW) (No 3), the plaintiffs, Mitchell and others, were seeking costs incurred during the course of a class action against the defendants, Roads and Maritime Services and another entity. The dispute involved issues of indemnity costs, gross sum costs, and the timing of costs payable, all within the framework of the Civil Procedure Act 2005 (NSW). The plaintiffs were acting as representative plaintiffs and sought to be reimbursed for costs incurred in bringing an interlocutory application, which they argued was necessary due to the conduct of the second defendant.

The court was required to decide whether the plaintiffs were entitled to indemnity costs for the application, whether the costs should be assessed as a gross sum, and the appropriate timing for the payment of those costs. The plaintiffs argued that their application was necessary to protect the interests of the class members, akin to fiduciary duties, and that the second defendant's conduct had necessitated the application. They further contended that the second defendant's unreasonable conduct warranted an indemnity costs order and that gross sum costs were appropriate due to the second defendant's inability to meet an adverse costs order.

The court found that the plaintiffs should not be left out of pocket for making the application, which was protective of the interests of the group members. It ruled that the second defendant's conduct was unreasonable and, therefore, the plaintiffs were entitled to indemnity costs. Regarding the gross sum costs, the court held that there was no evidence of the second defendant's ability to meet an adverse costs order and that assessing the costs would involve further expense, delay, and aggravation. As a result, the court awarded the costs as a gross sum, based on the actual costs incurred by the plaintiffs, without any discount. Lastly, the court determined that the costs should be payable forthwith, applying the Morningstar factors to reach this conclusion.