Re Malley SM; Ex parte Gardner

The case of Re Malley SM; Ex parte Gardner involved a request for a special costs order by the respondent against the applicant. The matter was brought before the court following the delivery of judgment on 14 February 2001, where the court found the proceedings to be an abuse of process. The respondent sought an order that the applicant pay their costs on an indemnity basis, except where they were deemed unreasonable. The applicant argued against the imposition of such costs, citing the absence of exceptional circumstances warranting such an order.

The legal issues before the court centred on whether the circumstances of the case were exceptional enough to justify the imposition of costs on an indemnity basis. The court considered precedents such as Colgate Palmolive Company v Cussons Pty Ltd and Baillieu Knight Frank NSW Pty Ltd v Ted Maning Real Estate Pty Ltd, which indicated that such costs could be awarded in cases of abuse of process. However, the court also noted the necessity for the applicant to have a clear understanding that their case was without merit, as established in cases like Re Fountain Selected Meats and Quancorp Pty Ltd v MacDonald.

The court found that while the proceedings were indeed an abuse of process, the applicant had not acted in a manner that should have been known to be manifestly unarguable. The existence of differing opinions among the judges further complicated the matter, with one judge even granting an Order Nisi to the applicant. Consequently, the court concluded that the circumstances did not meet the exceptional criteria required for an indemnity costs order. Instead, the applicant was ordered to pay the respondent's costs to be taxed, with a certificate for second counsel.

This decision highlights the stringent criteria required for awarding indemnity costs and the importance of a clear demonstration of abuse of process by the applicant. The court's decision not to impose indemnity costs was based on the lack of exceptional circumstances and the presence of differing judicial opinions.