Background
Kasaragh Investments sought several forms of relief concerning Enablo, including leave under s 237 of the Corporations Act 2001 (Cth) to commence derivative proceedings on Enablo’s behalf and authority under s 247A to inspect Enablo’s books. Those two prayers had been set down together following consent orders governing evidence, submissions and the hearing.
Kasaragh ultimately pursued only the inspection application at the hearing. Although it said a derivative-action application might follow after it obtained documents, it neither moved on the existing s 237 prayer nor sought an adjournment. In Kasaragh Investments Pty Ltd as trustee for the Kasaragh Investment Trust v Enablo Pty Limited [2026] FCA 1009, the Court had already concluded that the inspection prayer should be dismissed. The present judgment addressed the remaining orders and costs consequences.
The Court’s Holding
Justice Goodman dismissed both the s 237 derivative-action prayer and the s 247A inspection prayer. Because the derivative-action prayer had been set down for hearing and Kasaragh chose not to use the allocated hearing time or seek an adjournment, the Court treated that prayer as abandoned. The Court declined to dismiss a separate prayer concerning rectification of ASIC’s registers because it had not been set down or argued and might remain relevant to the oppression claim.
Kasaragh was ordered to pay Enablo’s costs of and incidental to the two dismissed prayers on the ordinary party-and-party basis. The Court rejected Enablo’s request for indemnity costs: Kasaragh’s positions were weak, but not so untenable or doomed to fail as to justify that exceptional order.
The costs were made payable forthwith, notwithstanding the usual rule postponing taxation of interlocutory costs until the proceeding ends. Immediate payment was justified because the orders finally determined discrete aspects of the case, Kasaragh’s procedural conduct could be regarded as unreasonable, and the proceeding remained at an early stage with final resolution potentially some time away.
Key Takeaways
- A party that does not pursue a claim at its scheduled hearing, and does not seek an adjournment, may be treated as having abandoned it.
- A weak or unsuccessful position does not by itself warrant indemnity costs; the position must meet the higher threshold for exceptional costs relief.
- Interlocutory costs may be ordered payable immediately when they concern discrete issues and the demands of justice outweigh the policy against multiple taxation proceedings.
Why It Matters
The decision underscores the importance of promptly notifying the Court and opposing parties when a litigant intends to depart from consent programming orders. Attempting to preserve a claim without moving it or formally seeking an adjournment may result in dismissal and an immediate costs liability.
It also illustrates the distinction between the basis and timing of a costs award. Although Kasaragh’s conduct supported payment forthwith, it did not establish the stronger grounds required for indemnity costs.