Payton Securities Pty Ltd v Bertacco Ferrier Pty Ltd (No 2)

Payton Securities Pty Ltd, the appellant, brought proceedings against Bertacco Ferrier Pty Ltd, the respondent, in the Supreme Court of Victoria. The nature of the dispute revolves around a claim for damages and an account of profits, following an alleged breach of fiduciary duty and a claim of unjust enrichment. The court was tasked with determining whether it should exercise its discretion to make a non-party costs order in favour of a third party, which was not a party to the proceedings. This issue is governed by Supreme Court (General Civil Procedure) Rules 2005 (Vic) rule 63.02, and the court's decision was influenced by the cases of Habrok (Dalgaranga) Pty Ltd v Gascoyn Resources Pty Ltd (No 2) [2021] FCA 72 and Bakers Investment Group (Australia) Pty Ltd v Caason Investments Pty Ltd (No 3) [2015] VSC 644.

The court identified several legal issues that needed to be addressed. Primarily, it was required to consider whether the third party had played a substantial role in the proceedings, which could justify a costs order in its favour. Additionally, the court needed to weigh the public interest in the administration of justice and the potential deterrence effect on future litigants. It was also necessary to examine the relevant factors outlined in the aforementioned cases to determine whether they were present in this instance.

Upon examining the evidence and applying the relevant legal principles, the court concluded that the third party had not played a substantial role in the proceedings. Consequently, the court exercised its discretion not to make a non-party costs order in favour of the third party. The court found that the third party's involvement was not significant enough to warrant such an order, and that the public interest in the administration of justice did not support making a costs order in this case.

In light of the court's decision, no non-party costs order was made in favour of the third party. The court's ruling serves as a reminder of the importance of substantial involvement by a third party in proceedings before a non-party costs order may be considered.