Correa v Whittingham (No 2)

In *Correa v Whittingham (No 2)*, the Court of Appeal of New South Wales considered an appeal and cross-appeal concerning costs orders made in proceedings between the appellants (Correa and others) and the respondent (Whittingham). The dispute involved claims related to the administration of a company and the validity of a Deed of Company Arrangement. The appellants sought to recover their costs of the appeal, the application before the Court of Appeal, and the proceedings at first instance, and also sought an order that the respondent personally bear his own costs of the appeal.

The primary legal issues before the Court of Appeal were whether the successful party should be deprived of costs relating to an issue on which they lost, and whether a Deed of Company Arrangement could have binding force independently of the *Corporations Act 2001* (Cth). The court also had to determine the appropriate apportionment of costs, considering the overall success and failures of the parties in the various stages of the litigation.

The Court of Appeal reasoned that while the general rule is that costs follow the event, the specific circumstances of the case warranted a departure from this rule. The court noted the delay in the respondent making his claim and the fact that the respondent had lost on certain significant issues. Consequently, the court ordered that the respondent pay 50 per cent of the appellants' costs of the appeal and 40 per cent of the plaintiffs' costs in the Equity Division, including the costs of specific interlocutory applications.

The court further declared that the respondent was not entitled to any right of indemnity or lien over the property of the second appellant for his liability to the appellants for costs, nor for any of his own costs of the proceedings. This was intended to ensure that the respondent personally bore his own costs. The court also made orders regarding the remuneration and expenses of the respondent as a purported administrator, requiring him to repay any excess remuneration received.