Thompson Land Ltd v Lendlease Shopping Centre Development Pty Ltd

The case of Thompson Land Ltd v Lendlease Shopping Centre Development Pty Ltd involved a dispute concerning the exercise of costs discretion in litigation. The plaintiff, Thompson Land Ltd, sought a declaration and damages from the defendant, Lendlease Shopping Centre Development Pty Ltd, but ultimately failed in its claim. The court had to decide whether the defendant's costs, including those incurred in relation to a third party, could be ordered against the plaintiff. The legal issue centred on the principles governing the awarding of costs on a party and party basis versus a solicitor and client basis, particularly in cases where a successful third party was involved.

The court examined the principles laid out in UFH Holdings Pty Ltd v Ord Minnett Corporation Finance Ltd, emphasising that while a defendant's warning to a plaintiff that their claim is misconceived is a relevant factor, it should not be given disproportionate weight. The court noted that the plaintiff's case was not hopeless but recognised that it was difficult to succeed. The court held that it was not appropriate to order costs on a basis other than party and party basis in this instance because the plaintiff's case was not without merit and the defendant's assertions were contested facts determined at trial.

In its reasoning, the court stressed the importance of avoiding hindsight bias and highlighted that normally, an unsuccessful party pays the costs of the successful party on a party and party basis. The court concluded that there were no exceptional circumstances warranting costs to be ordered on a solicitor and client basis. Therefore, the defendant's costs, including those related to the third party, were not to be ordered against the plaintiff.

The court's final order was that the plaintiff was to bear its own costs and the defendant was to bear its own costs, inclusive of those incurred in relation to the third party.