Om Business Group Pty Ltd v Nestle Australia Ltd (No 2)

The plaintiffs, Om Business Group Pty Ltd and others, sued the defendants, Nestle Australia Ltd and another, over various claims arising from a franchise agreement. The defendants applied to have parts of the statement of claim struck out and for a separate issue to be determined summarily. The application was successful, effectively ending the proceeding. The defendants sought costs of the proceeding. The plaintiffs argued that a costs order would be overly burdensome and that the defendants should not be allowed to recover costs of senior counsel.

The court had to decide whether costs should follow the event, whether the defendants should have costs of the entire proceeding, and whether the question of the recovery of senior counsel’s costs should be left for assessment. The court found that costs should follow the event, that the defendants were entitled to costs of the entire proceeding, and that the costs of two counsel should be left for assessment. The court declined to dismiss the proceeding as no application had been brought for such an order and the plaintiffs had not been heard.

The court cited established principles explained by McHugh J in Oshlack v Richmond River Council and followed the relevant rules in the Uniform Civil Procedure Rules 1999. The court held that impecuniosity of a party is not a ground upon which to deny a successful party its costs or to cap the costs. The objection to senior counsel raises two issues: whether costs of two counsel should be allowed and, if not, whether senior counsel appearing alone should be allowed. The costs assessor must determine whether the costs of two counsel or senior counsel appearing alone are necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being assessed.

The plaintiffs pay the defendants’ costs of the proceeding including the application filed on 23 November 2020 to be assessed.