Richard Walkom Linehans Real Estate Pty Ltd trading as Walkom Linehans First National Real Estate v Dhasmana

Richard Walkom Linehans Real Estate Pty Ltd, trading as Walkom Linehans First National Real Estate (the managing agent), sought leave to appeal a decision of the primary judge concerning costs in proceedings brought by a lessee (the plaintiff) against the owners of premises. The owners had cross-claimed against the managing agent, alleging that any liability to the plaintiff would stem from the managing agent's default. The primary judge had ordered the managing agent to pay the owners' costs of the cross-claim, despite the plaintiff's claim against the owners failing and the owners' cross-claim against the managing agent being dismissed.

The central legal issues before the Court of Appeal were whether the primary judge erred in ordering the managing agent to pay the owners' costs of the cross-claim, and whether leave to appeal should be granted. The managing agent argued that the primary judge’s reasoning, which suggested the owners' liability could only arise from the managing agent's default, effectively meant the real contest was between the plaintiff and the managing agent. This, it was contended, should have influenced the costs order. The managing agent also relied on a *Calderbank* offer made by the owners to the managing agent, proposing the latter take over the defence of the plaintiff's claim.

McColl JA and Basten JA, in refusing leave to appeal, reasoned that the primary judge’s costs order was a proper exercise of discretion. The dismissal of the plaintiff's claim against the owners meant the owners had succeeded against the plaintiff. The cross-claim was dismissed, but the primary judge found that the only plausible basis for the owners' liability to the plaintiff was the managing agent's default. Therefore, the owners were entitled to recover their costs of defending the cross-claim from the managing agent, as the managing agent's actions had necessitated the cross-claim. The *Calderbank* offer, while relevant to the overall litigation, did not alter the fundamental position that the managing agent was responsible for the owners' costs incurred due to its alleged default.

Leave to appeal was refused, and the managing agent was ordered to pay the costs of the appeal.