This blog post provides a general overview of the apportionment of costs, based on the Western Australian case of Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96.
1. The Importance of Success in Determining Costs
Success in legal proceedings is determined based on the reality of the circumstances involved in the case ([50]).
The court examines the overall outcome of the proceedings and the parties' success on individual issues.
The determination of success is not a mere mathematical calculation but rather an assessment of the parties' achievements on the substantive aspects of the case.
The court may depart from the general rule that costs follow the event and modify a costs order to take into account specific factors.
These factors can include unreasonable conduct by the successful party or the failure of that party on one or more particular issues ([50]).
The court's discretion in modifying costs orders is guided by the Rules of the Supreme Court, the established practice of the court, and legal authorities.
If the court is of the opinion that the successful party's conduct has resulted in costs being unnecessarily or unreasonably incurred, the court may deprive that party of costs, either wholly or in part ([50]).
The court may even order the successful party to pay the costs of the unsuccessful party, either wholly or in part, depending on the circumstances. This highlights the importance of maintaining reasonable conduct throughout the litigation process.
In cases where the successful party fails on specific issues, the court may exercise its discretion to apportion costs accordingly. This may involve ordering the successful party to pay the costs of those issues on which they have failed ([50]). However, it is essential to recognize that the court will only exercise this power when there are discrete and severable issues that have significantly added to the cost of the proceedings.
2. Discretion to Apportion Costs
The court has a wide discretion to apportion costs, which must be exercised judicially (Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96, [48]).
Apportionment of costs should only be made where there are discrete and severable issues on which the successful party failed, and which added to the cost of the proceedings in a significant and readily discernible way (Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96, [51]).
3. Modifying the Usual Costs Orders
When the court decides to modify the usual costs orders to reflect the limited success of the successful party, this power should be exercised broadly, as a matter of impression, without any attempt at mathematical precision (Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96, [52]).
This approach acknowledges the complexities of separating different issues and the varying importance of different issues within a case.
4. Apportionment of Costs in Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96
In this case, the court ultimately determined that a just apportionment of costs would require Strzelecki to pay two-thirds of the Jorgensens' costs of the action.
This conclusion was reached based on a broad analysis of the case, taking into account the various components of the action and their relative significance, and acknowledging the common factual substratum and legal issues in some components of the case (Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96, [97]-[100]).