Illawarra Retirement Trust v Denham Constructions Pty Ltd (No.2)

The Illawarra Retirement Trust brought proceedings against Denham Constructions Pty Ltd, seeking damages for alleged breaches of contract and other related claims. The case was heard in the Supreme Court of New South Wales. The dispute arose from a construction contract for a retirement village, with the Trust alleging that Denham Constructions failed to complete the work to the required standard and within the agreed timeframe.

The primary legal issue before the court was the allocation of costs where the defendant had made concessions during the proceedings that led to some claims being withdrawn or resolved. Although Denham Constructions was successful on the remaining issues, the Trust argued that both parties achieved a roughly equivalent degree of success overall, suggesting a shared costs arrangement might be appropriate. The court had to balance the traditional rule that costs follow the event with the circumstances of the case, particularly the concessions made by the defendant.

The court held that while the general rule is that costs follow the event, this is not an inflexible principle. It acknowledged the defendant's concessions and the overall outcome where both parties had achieved a degree of success on their respective claims. Given these factors, the court ordered that each party bear their own costs, reflecting the equitable nature of the resolution achieved. This decision underscores the court's discretion in allocating costs to ensure a fair outcome that considers the unique circumstances of each case.