Pioneer Studios Pty Ltd v Hills (No 2)

Pioneer Studios Pty Ltd (appellant) sought to vary an earlier costs order made by the Court of Appeal of New South Wales in favour of Hills (respondent). The dispute concerned the recovery of costs following an appeal under the *Workers Compensation Act 1987* (NSW), where the appellant had been successful on one ground but had abandoned a major ground of appeal prior to the hearing.

The primary legal issue before the Court was whether the successful appellant was entitled to recover the full costs of the appeal, or if the abandonment of a significant ground warranted a reduction in the costs awarded. The Court was required to consider the principles governing the award of costs when a party abandons a substantial part of their case before the hearing, and how this impacts the entitlement to recover costs thrown away.

The Court reasoned that while the appellant had been successful on one ground, the abandonment of a major ground before the hearing meant that a portion of the costs incurred by the respondent were rendered unnecessary. Applying the principle that costs should generally follow the event but be proportionate to the success achieved, the Court determined that the appellant should not recover all of their costs. The Court also considered the costs associated with the respondent's written submissions, which were prepared in anticipation of the abandoned ground being argued.

Accordingly, the Court vacated the previous order and ordered that the respondent pay the appellant's costs of the appeal, subject to the appellant paying 25% of the costs of the preparation of the respondent's written submissions dated 24 August 2012.