Option Funds Management Ltd v Tung Chit Real Estate Investment Australia Ltd (No 2)

The case involved Option Funds Management Limited, the first plaintiff, and Tung Chit Real Estate Investment Australia Limited, the second plaintiff, against the first and second defendants. The second plaintiff, Tung Chit, also appeared as the third party in the proceedings. The dispute centred around issues arising from a property transaction in relation to the ownership of a property located in Melbourne. The matter was heard in the Supreme Court of Victoria.

The central legal issues before the court were whether the plaintiffs were entitled to costs from the third party, and whether the court should consider the third party's interests as aligned with the first plaintiff when determining the costs order. The court needed to decide whether there was a distinction between the plaintiffs in terms of their interests, and whether this distinction should influence the costs order.

The court held that there was no principled reason to differentiate between the plaintiffs in the context of costs orders, as they shared the same interests in the proceedings. The court observed that where parties have identical interests, it is not appropriate to make separate costs orders against each party. The court further found that the third party, despite being a party to the proceedings, was not entitled to a separate costs order from the plaintiffs, as their interests aligned. The court ultimately determined that the plaintiffs were entitled to a single costs order from the third party, reflecting their shared interests in the litigation.

The court ordered that the third party pay the costs of the plaintiffs jointly and severally, recognising the alignment of their interests. The court did not impose a separate costs order on the third party, as it found that doing so would be inconsistent with the shared objectives of the plaintiffs. The decision underscored the principle that where parties have identical interests, the court should not fragment the costs order, ensuring that the litigation process does not unfairly burden any party.