Judge orders plaintiffs to bear costs of first group costs order application in Victoria

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In this judgment, Nichols J determined the appropriate orders as to costs that should follow from her earlier judgment in which she made a group costs order (GCO) in favour of the plaintiffs (Allen v G8 Education Ltd [2022] VSC 32). Although her Honour did not suggest that this judgment would necessarily set a precedent for all future cases, it is nevertheless likely to be instructive in future cases.

In this particular case, the defendant had played only a limited role in the GCO application, and confined its submissions to two particular issues which, in some ways, had potential implications for the proceeding beyond the GCO application itself.

The plaintiffs contended that the parties’ costs of the application should be costs in the cause (including the contradictor’s costs, in the sense that the party that is ultimately unsuccessful in the proceeding should bear those costs). The defendant, on the other hand, contended that the plaintiffs should bear their own costs of and incidental to the application, that the defendant’s costs of and incidental to the application should be reserved, and that the plaintiffs’ solicitors should pay the costs of the contradictor in any event.

After reciting some general principles relevant to costs, her Honour considered that the appropriate orders were that:

• The plaintiffs should bear their own costs of the application in any event (including the costs of the contradictor), particularly having regard to the defendant’s lack of opposition to the application (at [7]- [15]). Her Honour said (at [13]):
  Accepting that the identification of the “event” must be context-specific, the better definition of the “event” in this case is not the proceeding itself, but the application for a [GCO]. While that application is, in the ways discussed, necessarily connected with the proceeding, it is, for the purposes of assessing the justice of the costs questions, relevantly distinct. In contrast to the plaintiffs’ proceeding to vindicate the substantive rights of the plaintiffs and group members, the application in this case was wholly connected with the organisation of the plaintiffs’ and group members’ own affairs. It is true that the plaintiffs had to come to court to obtain their [GCO] and had to expend costs in so doing, but those costs were not, in any appreciable sense, caused by the defendant. All the defendant could do in respect of this application was to minimise costs by appropriately confining its submissions which, as I have said, were not in this instance made in opposition to the making of a [GCO]. Accordingly, I do not consider that it would be fair to require the defendant to pay the costs of the application in the event that the proceeding succeeds against it, which would be the ultimate effect of the plaintiffs’ proposed costs order. That is where the justice lies.

• The defendant’s costs should be reserved, such that under the Rules it will be entitled to recover those costs from the plaintiffs in the event that it is ultimately successful in defending the proceeding (but not otherwise).

Allen v G8 Education Ltd (No 3) [2022] VSC 302

Supreme Court of Victoria, Nichols J,
6 June 2022

Plaintiffs’ Solicitors: Slater & Gordon
Defendant’s Solicitors: Minter Ellison
Plaintiffs’ Funder: N/A

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