In the recent decision of Josey v InvestaFox Pty Limited [2021] NSWSC 827, the Supreme Court of New South Wales consider the legal costs implications when legal proceedings are dismissed.

P commenced legal proceedings seeking specific performance of a deed that saw D grant P a drainage easement. Shortly afterwards, the proceedings were dismissed by agreement.

When proceedings are dismissed normally the plaintiff will pay the defendant’s legal costs, unless the Court says otherwise: Uniform Civil Procedure Rule r42.20.

P said D had engaged in unreasonable delay in relation to the deed, forcing P to commence proceedings.

D said the deed had not been entered into properly before the proceedings were commenced.

There was a degree of delay of delay and disorganisation about entering into the deed, and confusion about when the counterparts were executed.

There was some suggestion that D might have engaged in unreasonable delay, but there was also a complaint that it took P the best part of a year to pay an $800 invoice required by the deed.

Due to the delay in progressing the matter, the Court found it was not unreasonable for P to have commenced proceedings.

However, the Court ordered each party to pay its own costs.

This judgment confirms that a plaintiff may stand disappointed if it relies too heavily on r42.20 to carry the day.