Kardos v Sarbutt (No 2)

In *Kardos v Sarbutt (No 2)*, the New South Wales Court of Appeal considered an appeal concerning the costs of property adjustment proceedings arising from a de facto relationship. The dispute involved the division of assets, and the appeal specifically addressed the appropriate cost orders for both the initial proceedings and the appeal itself, particularly in circumstances where the amount recovered was below the jurisdictional limit of the Local Court and neither party could be considered wholly or substantially successful.

The Court of Appeal was required to determine whether the first instance judge had erred in making certain cost orders, specifically in relation to the general costs of the property adjustment proceedings and the costs of an application for interlocutory preservation of property. Furthermore, the Court had to consider the appropriate costs order for the appeal, given the outcome of the substituted judgment.

The Court reasoned that the general principle of costs following the event was not applicable in this instance, as neither party had achieved substantial success. The judge at first instance had correctly identified that the plaintiff had not achieved "substantial success" in the context of the jurisdictional limit of the Local Court, and that the defendant had not been wholly successful. However, the Court found that the first instance judge had erred in not awarding the plaintiff the costs of the interlocutory application for preservation of property, as this had been a necessary step to protect the assets. Consequently, the Court ordered that there be no order as to the general costs of the proceedings at first instance, save that the defendant was to pay the plaintiff's costs of the interlocutory application. The Court further ordered that the respondent (the plaintiff in the first instance proceedings) was to pay the appellant's (the defendant in the first instance proceedings) costs of the appeal.