Background
Blue Dog Group Pty Ltd is pursuing a complex securities claim against Credit Suisse Equities (Australia) Limited and seven other defendants, including Argonaut Securities, Euroz Hartleys, and associated entities and individuals connected with the Oasis investment funds. The proceedings involve allegations of insider trading contraventions under s 1043A(1)(c) of the Corporations Act 2001 (Cth). The litigation has been marked by repeated difficulties in producing a compliant pleading: by late 2024 the plaintiff was on its fourth statement of claim (4SOC), which was struck out by consent order in September 2024, with costs awarded against the plaintiff at that time.
Following the strike-out, Bradley J ordered the plaintiff to file an application for leave to replead, together with a proposed fifth statement of claim (5SOC), by a deadline later extended to 18 December 2024. The plaintiff complied. However, upon receiving the defendants’ written submissions — which raised numerous complaints about the adequacy of the 5SOC — the plaintiff did not formally amend its application but instead annexed a further revised pleading, the sixth statement of claim (6SOC), to its reply submissions. The 6SOC contained significant changes, including an amended group member definition, revised allegations about inside information and the first defendant’s knowledge, new particulars regarding an alleged agreement to purchase shares, revised loss and causation allegations, and the abandonment of a claim for declaratory relief.
The defendants objected strenuously, describing the 6SOC as broadening rather than narrowing the dispute. The application was hotly contested, with Wilson J describing the defendants as having “thrown the kitchen sink” in opposition. On 11 December 2025, the Court granted leave to file and serve the 6SOC. The remaining question — resolved by this judgment — was the appropriate costs order for the leave application.
The Court’s Holding
Wilson J ordered that the plaintiff pay the defendants’ costs of the application incurred up to and including 2 May 2025 on the standard basis, and that the parties’ costs from 3 May 2025 be costs in the cause. The pivotal date of 2 May 2025 was when the plaintiff first provided the 6SOC to the defendants, thereby shifting the focus of the application to a materially different pleading.
The Court applied the well-established principle that an applicant who seeks an indulgence from the court must ordinarily pay the respondent’s costs irrespective of outcome, unless the respondent’s opposition was “wholly unreasonable.” Although the plaintiff ultimately succeeded in obtaining leave, it did so as an indulgence — the 6SOC was introduced mid-application without a formal amendment of the original leave application, and without court order authorising its late introduction. The Court rejected the plaintiff’s characterisation of the 6SOC as merely addressing the defendants’ concerns to narrow the dispute, finding instead that the changes were substantive and required defendants to expend additional effort in responding.
For the period from 3 May 2025, the Court found the defendants’ continued opposition was not wholly unreasonable. The defendants raised arguable issues requiring careful consideration, and the seriousness of the insider trading allegations justified the defence taken. Making costs in the cause for that later period appropriately balanced the plaintiff’s eventual success against the indulgence it had sought throughout the application.
Key Takeaways
- A party that obtains leave to file an amended pleading is seeking an indulgence and will ordinarily be ordered to pay the opposing party’s costs, regardless of success, unless that opposition was wholly unreasonable.
- Introducing a materially revised pleading via reply submissions — rather than through a formal amended application — does not shield the applicant from adverse costs consequences for the period during which the earlier, abandoned version was in play.
- Courts assess costs in discrete time periods aligned to significant procedural events; here the date on which the revised pleading was first served on the defendants marked the dividing line between two different costs regimes.
- Robust opposition to a leave application, even where ultimately unsuccessful, will not be characterised as “wholly unreasonable” where the allegations are serious and the pleading issues are genuinely contestable.
Why It Matters
This decision reinforces the Queensland courts’ strict approach to costs where a party repeatedly struggles to produce a compliant pleading. Litigants should be aware that each iteration of an amended statement of claim carries potential costs consequences — particularly where a new version is introduced informally mid-application in response to opponents’ criticisms, since such a course forces defendants to redirect their efforts and incur additional expense that the plaintiff will likely bear regardless of the final outcome on leave.
The judgment also clarifies the practical operation of the “wholly unreasonable” exception to the indulgence costs rule. Defendants who maintain a genuine, substantively arguable opposition to a leave application — especially in complex commercial or securities litigation — can do so without risk of an adverse costs order for that period, even if leave is ultimately granted to the applicant.