Galafassi v Kelly (No 2)

In *Galafassi v Kelly (No 2)*, the New South Wales Court of Appeal considered an application by the appellants to set aside an earlier judgment and order of the Court. The dispute concerned the costs of an appeal where the outcome had been mixed, with the appellants succeeding in recovering a sum of money from the respondent, but being ordered to pay a significant portion of the respondent's costs of the appeal.

The primary legal issues before the Court of Appeal were whether the Court had the power to set aside its own earlier orders and, if so, whether it should exercise that power. Relatedly, the Court had to determine the appropriate orders for the costs of the appeal, particularly in light of the mixed success of the parties. The Court also considered the entitlement to interest under s 101(4) of the *Civil Procedure Act 2005* (NSW).

The Court of Appeal held that it possessed the inherent jurisdiction to set aside its own orders in exceptional circumstances, but that such power should be exercised with caution. In this instance, the Court found no basis to set aside the earlier orders. Regarding costs, the Court applied the general rule that costs follow the event, but took a global view of the proceedings to determine the appropriate apportionment. The Court reasoned that despite the appellants recovering a sum, the respondent had achieved substantial success in resisting the entirety of the appellants' claim and in securing a significant costs order in their favour. Consequently, the Court ordered that the respondent repay the sum of $74,515.77 to the appellants, but that the appellants pay 90% of the respondent's costs of the appeal.