Kation Pty Ltd v Lamru Pty Ltd; Lewis v Nortex Pty Ltd (In liq) [No 4]

The appeal concerned the costs of litigation arising from a dispute involving Kation Pty Ltd and Lamru Pty Ltd, and Lewis (as liquidator of Nortex Pty Ltd) and Nortex Pty Ltd (in liquidation). The primary dispute involved claims by Kation and Lamru against Nortex, and cross-claims between Kation and Lamru. The Court of Appeal was required to determine the appropriate apportionment of costs, particularly in relation to the costs incurred by the liquidator of a unit trust and the liability of a party supporting an unsuccessful party.

The central legal issues before the Court of Appeal were how to apportion the overall costs of the litigation, given the mixed success of the parties, and whether Nortex Pty Ltd (in liquidation) should bear responsibility for costs incurred by Kation and Lamru in relation to certain aspects of the proceedings. Specifically, the court considered the principle of proportionate responsibility for overall costs and the extent to which a party supporting an unsuccessful party could be held jointly responsible for those costs.

The Court of Appeal reasoned that the general rule that costs follow the event should be applied with flexibility, considering the specific circumstances of the litigation and the degree of success achieved by each party. The court noted that the liquidator's involvement was primarily to protect the interests of the unit trust, and that the costs incurred by Kation and Lamru in relation to certain claims against Nortex were not entirely attributable to Nortex's conduct. The court applied principles of proportionate responsibility, acknowledging that the overall costs of the litigation were substantial and that a simple win/loss approach to costs would not be just.

The court made no order as to the costs associated with further submissions filed pursuant to an earlier order of 21 December 2009, indicating that these costs were to lie where they fell. The court also directed that certain other orders, numbered (6) and (11), be entered forthwith.