Benjamin & Khoury Pty Ltd v Rahme (No 4) [2023] NSWSC 1162

Benjamin & Khoury Pty Ltd v Rahme (No 4) [2023] NSWSC 1162

The court held that although r 42.20(1) of the UCPR provides for the plaintiff to pay the defendant's costs upon dismissal of proceedings, the rule is not inflexible and, in the circumstances of this case, the plaintiff acted reasonably in commencing and maintaining the proceedings given the uncertainty and shifting positions regarding the first defendant's liability to her former solicitors (Kekatos Lawyers) and potential breach of the indemnity principle. Known circumstances—not disputed or requiring a merits trial—showed justifiable grounds existed for the proceedings and their eventual consensual dismissal. Therefore, the proper discretionary order was that each party bear its own...

Parties
Plaintiff: Benjamin & Khoury Pty Ltd; First Defendant: Dana Rahme; Second Defendant: John Sharpe; Third Defendant: Greg Walsh
Jurisdiction
Australia
Judgment Date
28 September 2023
Procedural Posture
Costs Applications in Civil Proceedings / Post Dismissal of Proceedings and Interlocutory Application to Vary Costs Order
Outcome
Costs orders made: no order as to costs in the main proceedings (each party bear its own costs); the first defendant's notice of motion to vary a prior costs order dismissed; first defendant to pay plaintiff's costs of that notice of motion.
Legal Topics
Costs – Application for Costs Where Proceedings Dismissed by Consent, Costs – Indemnity Principle, Judgments and Orders – Varying and Setting Aside Interlocutory Orders, Reasonable Commencement and Maintenance of Proceedings, Party/party and Solicitor/client Costs, Costs Assessment and Review
Civil Procedure Costs Costs – Application for Costs Where Proceedings Dismissed by Consent Costs – Indemnity Principle Judgments and Orders – Varying and Setting Aside Interlocutory Orders Reasonable Commencement and Maintenance of Proceedings Party/party and Solicitor/client Costs Costs Assessment and Review

Case Brief

Summary, issues, holding and outcome

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Parties

Benjamin & Khoury Pty Ltd

Plaintiff

Dana Rahme

First Defendant

John Sharpe

Second Defendant

Greg Walsh

Third Defendant

Procedural Posture

Costs Applications in Civil Proceedings / Post Dismissal of Proceedings and Interlocutory Application to Vary Costs Order

Legal Issues

  1. 1 Whether each party should bear its own costs of the dismissed proceedings or if the plaintiff should pay the first defendant's costs under r 42.20(1) of the Uniform Civil Procedure Rules 2005 (NSW)
  2. 2 Whether the plaintiff acted reasonably in commencing and maintaining the proceedings
  3. 3 Whether the court should vary or set aside a prior costs order made by another judge following dismissal of a notice of motion to set aside subpoenas

Ratio Decidendi

The court held that although r 42.20(1) of the UCPR provides for the plaintiff to pay the defendant's costs upon dismissal of proceedings, the rule is not inflexible and, in the circumstances of this case, the plaintiff acted reasonably in commencing and maintaining the proceedings given the uncertainty and shifting positions regarding the first defendant's liability to her former solicitors (Kekatos Lawyers) and potential breach of the indemnity principle. Known circumstances—not disputed or requiring a merits trial—showed justifiable grounds existed for the proceedings and their eventual consensual dismissal. Therefore, the proper discretionary order was that each party bear its own...

Court Disposition

Costs orders made: no order as to costs in the main proceedings (each party bear its own costs); the first defendant's notice of motion to vary a prior costs order dismissed; first defendant to pay plaintiff's costs of that notice of motion.

Orders

  • In proceedings 2021/330107 and 2021/330110, there be no order as to costs; each party to bear its own costs of the proceedings.
  • The first defendant's notice of motion filed 8 March 2023 is dismissed.