Chiha v McKinnon

The appeal in *Chiha v McKinnon* concerned an order for costs made by the District Court of New South Wales. The plaintiff, McKinnon, had initially been successful in an arbitration, recovering a certain sum. However, following a hearing in the District Court, the plaintiff was awarded a substantially smaller verdict. The primary judge then ordered that the plaintiff pay the defendant's costs of the court proceedings.

The central legal issue before the Court of Appeal was whether the District Court judge had erred in ordering the plaintiff to pay the defendant's costs, despite the plaintiff ultimately recovering a verdict, albeit a reduced one. This required the court to consider the principles governing the award of costs in circumstances where a party achieves a lesser outcome in a court hearing than they did in an earlier arbitration.

The Court of Appeal allowed the appeal, setting aside the orders of the District Court. The court substituted a verdict and judgment for the appellant (the defendant in the District Court) in the sum of $129,409. In substitution for the original costs order, the court ordered that the respondent (the plaintiff in the District Court) pay the appellant's costs of the proceedings below, including the costs of the arbitration. The respondent was also ordered to pay the appellant's costs of the appeal.