Terravision Pty Ltd v Black Box Control Pty Ltd [No 5]

Terravision Pty Ltd and Black Box Control Pty Ltd were before the court, where the dispute concerned the interpretation of a settlement agreement and the award of special costs. Terravision sought to enforce the settlement agreement which provided that Black Box would pay all of Terravision's legal costs. Terravision further sought a special costs order under s 280(2) of the Legal Profession Act, which allows the court to order that special costs be paid if the matter is of unusual difficulty, complexity or importance. Black Box opposed the application for special costs, arguing that the settlement agreement precluded the right to apply for such an order.

The court was required to determine whether the settlement agreement precluded Terravision from applying for a special costs order and whether the award of such an order would introduce disproportionality between the settlement sum and costs claimed. The court considered the objective approach to contract interpretation, which requires the determination of the meaning of the terms by what a reasonable businessperson would have understood. The court also had to consider the statutory provisions concerning special costs and the context in which the settlement agreement was made.

The court held that the settlement agreement did not preclude Terravision from applying for a special costs order, as the words 'such costs to be taxed' referred to the process by which costs are quantified, and not the basis on which the taxing officer is to assess those costs. The court also held that the award of a special costs order would not introduce disproportionality between the settlement sum and costs claimed, as the settlement agreement provided for the payment of all legal costs, without limitation. The court found that the case was of unusual difficulty, complexity or importance, and exercised its discretion to award special costs.

The court ordered that Black Box pay Terravision's special costs of $100,000, which was determined to be proportionate to the settlement sum of $500,000. The court also ordered that Black Box pay Terravision's other costs of the proceeding.