Reliance Rail Pty Limited v Permanent Custodians Limited (No. 2)

The case between Reliance Rail Pty Limited and Permanent Custodians Limited involved a complex dispute primarily concerning contractual and commercial terms. The matter was heard in the Federal Court of Australia, where the plaintiffs sought damages and declaratory relief in relation to a contract for the provision of rail infrastructure services. The defendants, on the other hand, argued that the plaintiffs had breached the terms of the contract and sought various forms of relief in response.

The central legal issues before the court were whether the plaintiffs had breached the contract and, if so, the extent of any damages owed. Additionally, the court had to determine the appropriate costs order given that both parties had achieved partial success on various issues but the defendants were entirely successful on the fundamental commercial question.

In delivering the judgment, the court emphasised that the principle of costs following the event generally applies, meaning that the losing party usually pays the winner's costs. However, in this case, the court found that the defendants were entirely successful on the fundamental commercial question, which was the core issue of the litigation. Despite the plaintiffs achieving partial success on various issues, the overall outcome favoured the defendants on the most significant matter. Therefore, the court ordered the plaintiffs to pay the defendants' costs, reflecting the defendants' complete success on the key commercial dispute.