Sandalwood Properties Ltd (Subject to a Deed of Company Arrangement) v Huntley Management Ltd (No 2)

Sandalwood Properties Ltd (Subject to a Deed of Company Arrangement) sought to obtain a lump-sum assessment of costs from Huntley Management Ltd in the Federal Court. The plaintiff's application for a lump-sum assessment of costs was dismissed, with the court finding that the application failed to demonstrate a proper basis for the exercise of the court's discretion. The real dispute between the parties was the amount of costs to be awarded, with the plaintiff seeking an amount of approximately $220,000 and the defendant contending that the amount should be approximately $140,000. The court noted that the plaintiff had been successful on the present application and would be entitled to costs of the application. However, the court found that the plaintiff's application did not provide a proper basis for the exercise of the court's discretion in favour of making a lump-sum costs order. The court dismissed the application with costs.

The court considered the submissions made by the defendant's representative, Mr Scott, who complained of various ways in which the application failed to provide a basis for the costs claimed in a way that enabled a meaningful response. The court accepted the gravamen behind these complaints and noted that a summary of the components that would be expected to be awarded 'on a taxed basis' was advanced by way of submission for Mr Scott. The summary identified an amount of $140,500. The court found that the real dispute between the parties was between an amount of about $220,000 and an amount of about $140,000. In those circumstances, the court should afford the plaintiff an opportunity to accept the conceded amount as the assessed costs rather than proceed to assessment. However, the order should reflect the fact that Mr Scott had been successful on the present application and would be entitled to costs of the application. It was appropriate that the entitlement to those costs be reflected in a reduction of the amount put forward on behalf of Mr Scott as the amount that would be awarded 'on a taxed basis'. The court noted that an amount of $10,000 was included by the plaintiff in its proposed lump-sum amount as being for the costs of the application for a lump-sum assessment.