McGrath v Sturesteps; Sturesteps v HIH Overseas Holdings Ltd (in liquidation) (No 2)

McGrath and Sturesteps were parties to proceedings in the Supreme Court of New South Wales, with Sturesteps also bringing a separate action against HIH Overseas Holdings Ltd (in liquidation). The dispute concerned the costs of the proceedings at first instance, particularly in light of multiple issues and multiple trials that had occurred. The appeal was heard by Bathurst CJ, Macfarlan JA, and Sackville AJA.

The central legal issue before the Court of Appeal was how to apportion the costs of the proceedings at first instance, given that the outcome was not entirely in favour of one party. Specifically, the court had to determine whether the general rule that costs follow the event should be applied, and if so, how it should be modified to reflect the mixed success of the parties across the various stages and issues of the litigation.

The Court of Appeal reasoned that the general rule regarding costs should be departed from in this instance due to the complex nature of the litigation and the fact that neither party had achieved complete success. The court considered the specific dates on which significant events occurred in the proceedings, particularly a date that marked a shift in the relative success of the parties. Applying this approach, the court ordered that the appellants pay the respondent's costs of the proceedings at first instance up to and including 19 February 2010. Conversely, the respondent was ordered to pay the appellants' costs incurred after that date.