Lee v Australia and New Zealand Banking Group Ltd

In Lee v Australia and New Zealand Banking Group Ltd, the appellant contested the enforceability of a mortgage held by the respondent over his property. The matter was appealed to the court after an initial decision was made in the Trial Division in favour of the respondent, which held that the mortgage was enforceable. The appellant had a significant degree of success on appeal but ultimately the respondent was successful in both the Trial Division and on appeal with respect to the enforceability of the mortgage. The central legal issue before the court was whether it should depart from the respondent’s contractual entitlement to have its costs paid on an indemnity basis, in light of the appellant’s substantial success on appeal.

The court considered that the respondent had a contractual entitlement to have its costs paid on an indemnity basis. However, the court recognised that the appellant achieved substantial success on appeal, which could warrant a deviation from the usual costs order. The court examined the balance of success between the parties across all stages of the proceedings and determined that the appellant's success on appeal warranted a departure from the general rule regarding costs. Consequently, the court ordered that the respondent should pay half of the appellant's costs of the appeal, while the appellant should pay half of the respondent's costs of the Trial Division proceedings on an indemnity basis. The earlier order for costs in the Trial Division was set aside.

The court's decision highlights the need to balance the contractual entitlements of parties with the outcomes of the proceedings, particularly when one party achieves significant success on appeal. The final orders were that the respondent would pay half of the appellant's costs of the appeal, the previous order for costs in the Trial Division would be set aside, and the appellant would pay half of the respondent's costs of the Trial Division proceedings on an indemnity basis.