Sydney Water v Asset Geotechnical Engineering (No 2)

Sydney Water Corporation brought an action against Asset Geotechnical Engineering Pty Ltd in the Federal Circuit Court of Australia, seeking damages for the alleged breach of a contract for the provision of geotechnical services. Asset Geotechnical Engineering, in turn, sought to recover costs from Sydney Water under a bullock order. The central issue was whether there were exceptional circumstances that justified a departure from the standard principle that costs follow the event, thereby permitting the defendant to be awarded costs despite the plaintiff's victory.

The court examined whether there were grounds for the defendant to be granted costs, despite the plaintiff prevailing. Factors considered included the defendant's conduct throughout the proceedings, the nature of the claims, and whether the defendant had acted unreasonably or vexatiously. The court found that while there were some instances of unreasonable conduct by the defendant, these did not reach the threshold of exceptional circumstances that would warrant a departure from the usual rule. Consequently, the court ruled against the defendant's application for costs, adhering to the principle that costs generally follow the event.

In summary, the court held that Asset Geotechnical Engineering was not entitled to a bullock order, and therefore, the plaintiff, Sydney Water Corporation, was not required to pay the defendant's costs. The Federal Circuit Court dismissed the defendant's application for costs, maintaining that the ordinary rule of costs following the event applied in this case.