Strathboss Kiwifruit Limited v Attorney-General

Strathboss Kiwifruit Limited and Seeka Kiwifruit Industries Limited initiated proceedings against the Attorney-General. The plaintiffs sought permission to bring the proceedings as a representative action on a funded basis, approval of the funding arrangements, and security for costs. The defendant opposed the applications, arguing that the plaintiffs' claims were not tenable, and that the requested security for costs was insufficient. The High Court granted the plaintiffs' applications, leading to a dispute over whether the costs of the interlocutory applications should be paid immediately or deferred until the substantive proceedings are concluded.

The central issue for the court was whether there were special reasons to deviate from the usual rule that costs on interlocutory applications become payable when fixed. The court considered whether the nature of the applications, the involvement of litigation funders, and the extensive opposition warranted deferring the costs' entitlement. The plaintiffs argued that they had succeeded on their applications and that the consistency of costs consequences should be maintained. The defendant contended that both parties achieved some measure of success and that the costs should be deferred until the substantive proceedings are resolved.

The court found that the unusual nature of the applications, which involved significant preliminary steps due to the representative action and funding arrangements, warranted special reasons for deferring the costs' entitlement. The court emphasised the importance of defendants being able to test the terms of funded class actions through reasoned challenges. The court also noted that while there was a connection between the preliminary steps and the substantive outcome, this did not justify a general rule of deferring costs. Consequently, the court ordered that the costs of the interlocutory applications be made costs in the cause, payable by the party that ultimately prevails in the substantive litigation.

The court made no costs order on this determination, leaving the agreed quantum of costs and disbursements to be settled in accordance with the substantive outcome of the litigation.