Background
Katrina Emmett, a member of Wildlife Information Rescue and Education Service Limited (WIRES), commenced proceedings in November 2024. She sought a declaration that WIRES was governed by its 2007 constitution, rather than a disputed constitution used in its conversion from an incorporated association to a company limited by guarantee, and an injunction restraining WIRES from acting under that disputed constitution.
In April 2025, WIRES sent members an email acknowledging errors in the conversion process and outlining proposed corrective steps. Those steps included adopting a new constitution substantially similar to the 2007 constitution and seeking court orders to regularise the conversion. Separate proceedings brought by WIRES achieved that regularisation in February 2026. Ms Emmett participated as a defendant in those proceedings, where there was no order as to costs. She then discontinued this proceeding by consent, leaving costs to be decided on the papers.
The Court’s Holding
Kunc J held that WIRES had, in substance, capitulated through its 17 April 2025 member email: it accepted the fundamental position advanced by Ms Emmett and set out the process by which it would rectify the position. WIRES was therefore liable for Ms Emmett’s costs incurred up to that point.
But the Court found that Ms Emmett acted unreasonably in continuing to prosecute this case after she and her advisers had a reasonable opportunity to assess the email. Rather than take further procedural steps, she should have engaged with WIRES or agreed to an adjournment while the promised corrective measures were implemented. The reasonable assessment period ran through 21 April 2025. The Court therefore ordered WIRES to pay Ms Emmett’s costs up to and including that date, made no order as to costs otherwise, and ordered Ms Emmett to pay WIRES’ costs of the separate costs application.
Key Takeaways
- A party may effectively capitulate for costs purposes even if the proceeding ends because of later corrective or regularisation proceedings.
- After a practical acceptance of the relief sought, a litigant must reassess whether continuing the original proceeding is reasonable.
- The Court will not conduct a hypothetical merits trial when determining costs after discontinued proceedings.
- Costs of separate proceedings remain separate where the parties agreed to no costs order in those proceedings.
Why It Matters
The decision illustrates the costs consequences of a defendant’s practical concession outside the courtroom. WIRES’ member communication was treated as substantively vindicating Ms Emmett’s position, notwithstanding that it was not a formal undertaking or concession in this proceeding.
It also underscores the overriding purpose under the Civil Procedure Act 2005 (NSW). Once a proposed corrective course addressed the real dispute, pressing ahead risked unnecessary expense and a later dispute over whether advice and corporate-process costs were truly costs of the proceeding.