Chateau Constructions (Aust) Ltd v Zepinic; Zepinic v Chateau Constructions (Aust) Ltd

The case involved Chateau Constructions (Aust) Ltd and Zepinic, with two appeals and cross-appeals being heard. The primary dispute centred around the costs incurred during the litigation and the appropriate method of quantification and apportionment of those costs between the parties. The court was asked to determine whether an indemnity costs order or a gross sum costs order should be made, as well as the principles that should guide the apportionment of costs between the parties.

The key legal issue before the court was the correct approach to determining costs in party/party cases, particularly in light of the general rule that costs follow the event. The court had to consider whether the traditional indemnity basis of quantifying costs was still appropriate, or if a gross sum costs order would be more suitable in certain circumstances. Additionally, the court needed to assess the factors that should be taken into account when determining the appropriate apportionment of costs between the parties, including the conduct of the parties during the litigation and the overall outcome of the case.

The court held that the traditional indemnity basis of quantifying costs was still valid, but the court should have regard to the overall outcome of the case when determining the appropriate apportionment of costs between the parties. The court also found that a gross sum costs order may be appropriate in certain circumstances, such as where there has been significant misconduct by one party. However, in this case, the court found that an indemnity costs order was more appropriate, given the overall outcome of the case and the conduct of the parties. The court ultimately determined that the costs should be apportioned on a 60/40 basis in favour of Zepinic.

No further orders were made by the court.