Jackson & Anor v Abram & Anor (No 2)

The Full Court of the Supreme Court of South Australia considered an appeal concerning the award of costs in a proceeding between the Jackson parties and the Abram parties. The dispute arose from an earlier judgment where the primary judge had awarded costs to the Abram parties on an indemnity basis, despite the Jackson parties having achieved substantial success in certain aspects of the litigation. The Jackson parties sought to appeal this costs order.

The central legal issue before the Full Court was whether the primary judge had erred in departing from the general rule that costs follow the event, and specifically, whether the primary judge was justified in ordering costs on an indemnity basis in favour of the Abram parties, notwithstanding the Jackson parties' substantial success. The Court was required to determine if the reasons provided by the primary judge for this departure were sufficient and legally sound.

The Full Court reasoned that the primary judge's decision to award indemnity costs was not supported by the evidence or the established legal principles. While acknowledging that a judge has discretion to depart from the usual costs rule, the Court found that the primary judge had failed to articulate a sufficient or compelling reason for doing so in this instance. The Jackson parties' substantial success in the litigation was a significant factor that weighed against an indemnity costs order in favour of the Abram parties. The Court held that the primary judge had misapplied the principles governing the award of costs, particularly in circumstances where one party has achieved substantial success.

Consequently, the Full Court allowed the appeal, setting aside the primary judge's order for indemnity costs. The Court ordered that the Abram parties pay the Jackson parties' costs of the appeal and that the costs of the original proceeding be costs to be taxed on a party and party basis, with liberty to apply for a review of that order if so advised.