Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd

The case of *Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd* concerned an appeal to the New South Wales Court of Appeal regarding costs orders sought against a non-party, Allianz. The primary dispute involved Rickard Constructions Pty Ltd (the plaintiff) suing Rickard Hails Moretti Pty Ltd (the defendant). The core of the appeal related to whether Allianz, a third party with a commercial interest in the litigation, had engaged in an abuse of process by funding and controlling the litigation brought by an insolvent plaintiff without indemnifying that plaintiff against adverse costs orders. Further issues included whether Allianz had committed an abuse of process by funding and assisting the plaintiff to pursue claims based on ineffectively assigned causes of action, and whether the administration of justice was brought into disrepute by Allianz's non-exposure to costs. The court also considered whether the security for costs regime adequately addressed such claims, whether the proceedings were so hopeless as to constitute an abuse of process, and whether an unreasonable refusal of a *Calderbank* offer or the conduct of proceedings for the purpose of obtaining a higher settlement sum amounted to an abuse of process.

The Court of Appeal considered whether the conduct of Allianz constituted an abuse of process, particularly in light of the plaintiff's insolvency and the nature of the assigned causes of action. The court examined the principles governing costs orders against non-parties, focusing on whether the non-party's involvement went beyond mere funding to active control and whether this control, coupled with the plaintiff's impecuniosity, created a situation where the defendant was unfairly prejudiced. The court also had to determine if the proceedings themselves were so lacking in merit that their pursuit by Allianz was inherently an abuse of the court's process, and whether the refusal of a settlement offer was a relevant factor in assessing such abuse.

The Court of Appeal granted leave to Allianz to file an amended notice of appeal and granted leave to appeal in each matter. However, all appeals were ultimately dismissed with costs, and all motions were also dismissed with costs.