Forbes Engineering (Asia) Pte Limited v Forbes (No 5)

Forbes Engineering (Asia) Pte Limited v Forbes (No 5) involved a dispute between the applicants and the respondents over damages claimed for profit shortfalls in 1998 and 1999. The matter was before the Federal Court of Australia, which had to decide on the allocation of costs between the parties, following the applicants' partial success in obtaining relief for the 1999 profit shortfall.

The legal issues the court had to resolve included the appropriate method for assessing costs given the applicants' partial success, the relevance and impact of certain interlocutory applications by the respondents, and whether the applicants' costs claim should be accepted or rejected based on their success rate. The respondents argued that the applicants should only be compensated for 7% of their claim, and that the applicants' costs claim was excessive given their limited success. The respondents also highlighted the importance of their applications for disclosure and to exclude evidence, which were critical to their defense.

The Court considered the discretionary power to award costs under the Federal Court of Australia Act 1976, recognising that while costs traditionally follow the event, a fair result might warrant an issue-based apportionment. The Court noted that the applicants had succeeded in obtaining relief for only a small portion of their claim and that the respondents' successful defense of the majority of the claim warranted a costs order in their favour. The Court found that the applicants' costs claim should be rejected as it was disproportionate to their limited success. Additionally, the Court held that the respondents' interlocutory applications were crucial to their defense, and thus, the applicants should bear the costs of these applications.

The final orders made by the Court were that the applicants are liable for the respondents' costs of and incidental to the application filed on 18 January 2007. Otherwise, there shall be no order as to costs between the applicants and the respondents.