Suda Ltd v Sims (No.2)

In *Suda Ltd v Sims (No.2)*, the Supreme Court of Western Australia considered an application for indemnity costs following the successful striking out of a counterclaim. The applicant, Suda Ltd, sought these costs on the basis that the respondent, Sims, had engaged in an unreasonable act or omission that caused costs to be incurred.

The central legal issues before the Court were whether Sims' conduct in bringing and pursuing the counterclaim constituted an unreasonable act or omission, and if so, whether this conduct directly caused Suda Ltd to incur costs. The Court was also required to determine if these circumstances warranted the exercise of its discretion to award indemnity costs, rather than the usual order for party-and-party costs.

Judge Lucev reasoned that the counterclaim was fundamentally flawed, being both hopeless and an abuse of process, and therefore bound to fail. While leave to re-plead was granted on certain matters not forming part of the original counterclaim, the Court found that the pursuit of the hopeless counterclaim itself was an unreasonable act. This unreasonable conduct was found to have directly caused Suda Ltd to incur costs in defending the doomed claim. Consequently, the Court determined that it was a proper case to depart from the usual costs order and award indemnity costs to Suda Ltd.