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[2026] NSWCA 129
respondent. The Court treated the 8 July 2024 summons as an application to amend the cross-appeal, granted leave to add ground 3, dismissed ground 3, and ordered the appellants to pay the respondent's costs...
The Court of Appeal upheld the trial judge's decision that TfNSW should pay 65% of the plaintiffs' costs, rather than all of them. The case had mixed results: two lead plaintiffs succeeded in private nuisance claims, while two others failed in public nuisance, and the failed representative claims affected group members beyond the named plaintiffs. The costs of the claims overlapped, so the Court held that a precise, issue-by-issue calculation was not required. It also rejected the argument that the appellants were unfairly denied a chance to provide more costs evidence, because they had not sought an adjournment or provided that evidence when the costs issue was before the trial judge. The Court allowed the cross-appeal to be amended but dismissed the added ground.
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2,227 words · generated 07/10/2026
5 cited instruments linked from this judgment.
The judgment concerns the costs consequences of a six-week trial about disruption caused by construction and development of the Sydney Light Rail. The proceedings were brought under Part 10 of the Civil Procedure Act 2005 (NSW) as representative proceedings. Four named plaintiffs acted as lead plaintiffs for group members: Hunt Leather Pty Ltd, Sophie Hunt, Ancio Investments Pty Ltd and Nicholas Zisti ([5]).
The claims did not have a uniform result. Hunt Leather succeeded in private nuisance concerning its Strand Arcade shop, but not its shop in the Queen Victoria Building (QVB). Ancio succeeded concerning its Anzac Parade premises. Ms Hunt and Mr Zisti failed entirely in public nuisance ([6]-[9]). The damages for the successful corporate plaintiffs were quantified at $3,693,164 for Hunt Leather and $317,773 for Ancio, but the successful claims were still partial: Hunt Leather lost on the QVB claim, and both corporate plaintiffs failed to establish entitlement to damages for the entire construction period, described as “Case A” ([9], [22]-[32]).
The trial judge made a separate costs order. TfNSW was ordered to pay 65% of all four plaintiffs’ costs, except for the costs associated with common questions 10 and 11, which concerned litigation funding and were dealt with separately. The plaintiffs were ordered to pay TfNSW’s costs of those questions ([39]). The present appellants, Hunt Leather and Ancio, challenged the 35% reduction. They argued, in substance, that TfNSW should pay all the successful corporate plaintiffs’ costs, or alternatively that the percentage should be reconsidered on further evidence ([1]).
The procedural route became complicated. The appellants first raised the costs challenge during the hearing of the earlier appeal and cross-appeal. Rather than amending the existing cross-appeal, they filed a separate summons seeking leave to appeal. The High Court later remitted the costs issue to the Court of Appeal ([36]-[37]). The Court of Appeal treated the summons as an application to amend the existing cross-appeal, granted leave to add a new ground, but dismissed that ground on its merits. The appellants were ordered to pay TfNSW’s costs of the new ground and the summons ([111]-[112]).
The Court began with the claim of procedural unfairness. The appellants said the primary judge lacked an evidentiary basis for reducing their costs by 35%, and should either have made offsetting orders or allowed further evidence to be filed. But, at the costs hearing, the appellants’ counsel had argued that if the judge was minded to reduce the costs order, there was no evidence to select a percentage. Counsel did not seek an adjournment to provide evidence. The Court held that there was no procedural unfairness in the judge rejecting the appellants’ position and deciding the issue on the record before him ([69]-[78]).
The Court regarded the argument for a second chance to supply evidence as inconsistent with ordinary litigation procedure. The appellants had put forward their position on the available material, and the primary judge had been entitled to determine the costs question on that material. The Court emphasised that the primary proceedings judgment had been delivered almost 11 months before the costs decision, and found no suggestion that the appellants lacked time to adduce evidence they considered necessary ([75]-[78]).
The Court then considered whether the trial judge had departed from established principles by making an apportionment. The applicable appellate question was whether the appellants had shown error of the kind described in House v The King. The Court explained that the case authorities relied on by the appellants did not resolve the difficulty before the trial judge: costs had been incurred in one proceeding for four plaintiffs, two successful and two unsuccessful ([89]-[90]).
The Court rejected the submission that Currabubula required the successful plaintiffs to receive all their costs, leaving the unsuccessful plaintiffs to pay only costs separately caused by their joinder. The judgment explained that the principle discussed in Currabubula arose in a different setting and was not an inflexible rule. The Court did not conclude that the approach in Currabubula could never apply to representative proceedings. Rather, it held that failing to apply an extrapolation of that approach in this case did not establish House v The King error ([93]-[97]).
The representative context mattered. The dismissal of Ms Hunt’s and Mr Zisti’s public nuisance claims bound group members with public nuisance claims under s 179 of the Civil Procedure Act ([10]). The Court considered that the failure of those claims had consequences beyond the named plaintiffs. It also noted that evidence and costs substantially overlapped between public and private nuisance claims and between the Strand Arcade and QVB claims ([82], [86]-[88]). In that setting, the trial judge could take account of both the successful claims and the unsuccessful representative claims.
The Court treated the costs apportionment as an evaluative decision. It relied on Doppstadt for the principle that in mixed-outcome proceedings, apportionment is a matter of discretion and “mathematical precision is illusory” ([102]-[103]). The trial judge had heard the trial and was “uniquely well placed” to evaluate the issues, evidence and submissions ([109]). It was open to him to make a broad-brush order rather than directing a difficult assessment of which costs related to which overlapping claims.
The affidavit sworn by Ms Banton after the costs decision did not alter the result. The Court found it could not be used to obtain a review of the discretion based on evidence available at first instance but not then adduced ([67]). It also identified a substantive problem: the affidavit focused on costs exclusively attributable to the public nuisance and QVB claims, whereas the appeal concerned costs incurred both for successful and unsuccessful claims ([67]). The Court therefore dismissed the new ground ([110]-[112]).
The judgment did not announce a new general rule that representative plaintiffs’ costs must be treated as a single unit, or that a particular percentage should be used when lead plaintiffs have mixed results. It applied established principles of discretionary costs assessment and appellate review to a factually unusual representative proceeding.
Before this decision, the authorities referred to in the judgment recognised that costs apportionment after mixed success is discretionary and that a court may make a broad-brush assessment. Doppstadt stated that mathematical precision is illusory and that the decision depends on impression and evaluation ([102]). The Court applied that approach to circumstances involving multiple lead plaintiffs, overlapping evidence and group-wide consequences ([103], [109]).
The judgment also considered the relationship between a “rule of thumb” discussed in Currabubula and the exercise of the costs discretion. It explained that the cited formulation was not an inflexible rule in New South Wales and that Currabubula arose from a different procedural context ([93]-[96]). The Court’s holding is limited: not applying the proposed extension of Currabubula in this case was not a reviewable error ([97]). It left open whether a different result might be appropriate in another representative proceeding.
After the decision, the immediate result was that the trial judge’s 65% order remained in place. The judgment confirms that the scale of the costs does not by itself create a different legal test for apportionment. A large dollar consequence may make it worthwhile for parties to prepare additional evidence, but it does not mean such evidence is legally essential in every case ([75]). The Court also confirmed that a party who does not adduce available evidence at first instance cannot use an appeal as an opportunity to reframe the costs assessment on a new evidentiary basis ([67], [77]-[78]).
At [75], the Court said: “The notion that some different legal principle is involved, or that a different level of evidence is essential, before the exercise of the costs discretion when costs are $200,000 or $2,000,000 or $20,000,000 is misconceived.” In plain English, the amount at stake may affect how much evidence parties choose to prepare, but it does not automatically change the legal principles the court applies.
At [77], the Court rejected the claim that the appellants were denied procedural fairness because the judge decided the issue on the evidence before him. The appellants had argued that the existing material did not permit a percentage apportionment, but had not asked to adjourn the hearing to provide more evidence. The Court considered it fair to determine the issue on the basis the parties had chosen to present.
At [95], the Court said that it “incline[d] to the view” that applying the Currabubula approach would be unjust in this representative proceeding, because the failed public nuisance claims resolved group members’ claims as well. But the Court expressly did not reach a concluded view on that proposition. The operative holding was narrower: there was no House v The King error in declining to apply the proposed approach ([97]).
At [102], the Court adopted the statement that when proceedings have a mixed outcome, apportionment “is very much a matter of discretion and mathematical precision is illusory”. This recognises that a percentage costs order may involve an evaluative judgment rather than a calculation tied exactly to the time spent on each claim.
At [109], the Court explained why the 65% order was open. It recognised shared legal and expert resources, overlapping claims, the group-wide consequences, and TfNSW’s success against the public nuisance claims. The trial judge’s familiarity with the trial supported the evaluative assessment.
The reasoning is most directly relevant where one proceeding involves several lead plaintiffs with materially different outcomes, and the costs of successful and unsuccessful claims overlap. Here, the corporate plaintiffs succeeded in private nuisance, while the individual plaintiffs failed in public nuisance. The same solicitors, counsel and experts had worked across the claims, and the trial judge found substantial evidentiary overlap ([24], [82]-[85]).
The representative dimension was also important. The failed claims were not merely personal claims that ended with the named plaintiffs. The judgment noted that the dismissal of the public nuisance claims bound relevant group members under s 179 ([10]). The Court considered this a significant difference from an ordinary case where one of two plaintiffs succeeds and the other fails, without wider representative consequences ([86], [95], [98]-[99]).
The reasoning is also relevant when a party challenges an impressionistic costs percentage on the basis that no exact calculation was made. The Court accepted that evidence may sometimes be useful, and that in some cases a court may be unable to make a fair broad-brush assessment. But it did not treat a detailed costs breakdown as an invariable prerequisite ([107]). The particular circumstances matter, including the trial judge’s familiarity with the litigation and whether the parties chose to provide evidence.
The decision is less directly concerned with a fully severable issue heard on separate evidence. The litigation-funding questions here were dealt with separately and their costs were treated separately by the primary judge; that part of the costs order was not challenged ([80], [101]). The Court distinguished that kind of separable issue from the overlapping nuisance claims.
The supplied judgment does not identify any later judicial treatment of this decision. It was delivered on 14 July 2026, and the materials provided contain no subsequent cases applying, following, distinguishing or reviewing it. No later treatment can therefore be stated from this source.
The decision itself discusses earlier authorities, including House v The King, Doppstadt, Currabubula, Housman, and Makaritis. Its treatment of those authorities is set out above, but that is not later treatment of the present judgment. A later-court analysis would require sources beyond the judgment supplied here.
The Court expressly left open whether the Currabubula approach should be applied, or adapted, in other representative proceedings. It said it inclined to the view that applying that approach here would be unjust but did not decide the point ([95]). The holding was only that the primary judge’s failure to apply the proposed extension of Currabubula did not amount to House v The King error ([97]).
The judgment also leaves open when a court should require detailed evidence before making a percentage costs order. It accepted that there may be cases where a broad-brush assessment would not be fair, in which case the matter might be left to assessment or, exceptionally, the parties might be given an opportunity to adduce further evidence ([107]). It did not define a threshold for identifying those cases.
A further question is how courts should handle costs where some expenditure is common to successful and unsuccessful representative claims. The Court considered the appellants’ affidavit inadequate in part because it concentrated on costs exclusively attributable to failed claims and did not resolve the allocation of shared costs ([67]). It did not prescribe a method for quantifying shared costs in future proceedings.
Finally, this judgment does not determine how a different procedural history, a different degree of overlap, or a different evidentiary record might affect the costs discretion. Its conclusion rests on the trial judge’s familiarity with this six-week trial, the representative effects of the failed claims, the substantial overlap in evidence, and the appellants’ decision not to adduce further evidence before the costs order was made ([82], [86]-[88], [109]).
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Hunt Leather Pty Ltd v Transport for NSW [2026] NSWCA 129
Hearing dates: On the papers
Decision date: 14 July 2026
Before: Bell CJ; Leeming JA; Mitchelmore JA
Decision: 1. Treat the summons filed on 8 July 2024 in 2024/00253975 as an application to amend the cross-appeal, being the notice of appeal filed in 2024/00465963.
2. Grant leave to amend the cross-appeal by adding as ground 3 the ground attached as a draft notice of appeal to the summons filed on 8 July 2024.
3. Dismiss ground 3 of the cross-appeal as amended.
4. The appellants to pay the respondent’s costs of ground 3 of the cross-appeal, including the costs of the summons filed on 8 July 2024 in 2024/00253975.
Catchwords: COSTS – apportionment – representative proceedings – two representative plaintiffs successful, two unsuccessful – costs incurred in relation to successful and unsuccessful claims – whether partial costs order appropriate – whether departure from principle in ordering partial costs order – whether evidentiary basis for partial costs order
Legislation Cited: Civil Procedure Act 2005 (NSW), ss 56, 60 and 179
Supreme Court Act 1970 (NSW), ss 75A and 101(2)(c)
Roads Act 1993 (NSW), s 141
Cases Cited: Boyd v Thorn (2017) 96 NSWLR 390; [2017] NSWCA 210
Cretazzo v Lombardi (1975) 13 SASR 4
Currabubula Holdings Pty Ltd v State Bank of NSW [2000] NSWSC 232
Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219
Hanna v Commissioner of Police [2026] NSWCA 120
Hellenic Property Holdings Pty Ltd v Makaritis [2025] NSWCA 13
House v The King (1936) 55 CLR 499; [1936] HCA 40
Housman v Camuglia (2021) 104 NSWLR 615; [2021] NSWCA 106
Hunt Leather Pty Ltd v Transport for NSW (No 4) [2024] NSWSC 140
Hunt Leather Pty Ltd v Transport for NSW (No 5) [2024] NSWSC 776
Hunt Leather Pty Ltd v Transport for NSW [2023] NSWSC 840; 257 LGERA 1
Hunt Leather Pty Ltd v Transport for NSW [No 2] [2026] HCA 4
James v Royal Bank of Scotland [2015] NSWSC 970
Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (No 2) [2003] VSC 212
Makaritis v Makaritis (No 3) [2023] NSWSC 409
Re Zita (a solicitor) [2022] VSC 354
The Owners – Strata Plan No 31337 v Balacco (No 2) [2026] NSWCA 84
Tonna v Mendonca (No 2) [2020] NSWSC 306
Transport for NSW v Hunt Leather Pty Ltd; Hunt Leather Pty Ltd v Transport for NSW (2024) 115 NSWLR 489; [2024] NSWCA 227
Texts Cited: B Chen and M Legg, “An Economic Perspective on Costs in Australian Class Actions” (2022) 45(3) Melbourne University Law Review 950
J Kirk, “The Case for Contradictors in Approving Class Action Settlements” (2018) 92 ALJ 716
Category: Costs
Parties: Hunt Leather Pty Ltd (First Appellant)
Ancio Investments Pty Ltd (Second Appellant)
Transport for NSW (Respondent)
Representation: Counsel:
A Hochroth, M Kingsland (Appellants)
D McLure, T Scott (Respondent)
Solicitors:
Banton Group (Appellants)
Lander & Rogers (Respondent)
File Number(s): 2023/00465963, 2024/00253975
Publication restriction: Nil
THE COURT: This decision is about costs in representative proceedings. Two of the four lead plaintiffs – one of which was fully successful, the other partly successful, at trial – seek to appeal from one aspect of a special costs order made by the trial judge, namely, that the defendant (TfNSW) pay 65% of all four plaintiffs’ costs as agreed or assessed, save in relation to costs arising from common questions 10 and 11, where the plaintiffs are to pay the defendant’s costs: Hunt Leather Pty Ltd v Transport for NSW (No 5) [2024] NSWSC 776. There is no challenge to the order for costs in relation to common questions 10 and 11, where the plaintiffs have failed before all nine judges before whom this issue has been argued. However, they seek a more favourable costs order in relation to the other issues. They maintain that the trial judge’s discretion miscarried. They propound two alternatives: that (a) this Court should set aside the order that TfNSW pay 65% of the successful plaintiffs’ costs, and in lieu thereof TfNSW should be ordered to pay the entirety of the two successful plaintiffs’ costs, or alternatively (b) that the proportion of the two successful plaintiffs’ costs that TfNSW should be ordered to pay be remitted to the trial judge, to be redetermined on the basis of different evidence.
It is convenient to note one point at the outset. The orders proposed by the appellants leave unaddressed TfNSW’s costs of the two plaintiffs who failed. In submissions, it is contended that those two unsuccessful plaintiffs should in principle be ordered to pay such costs as were incurred “solely by reason of the joinder of Ms Hunt and Mr Zisti to the proceedings”, and that because (so it is said) those costs would have been de minimis, they may be put to one side. We shall return to the significance of this, in the context of representative proceedings.
The procedural background is regrettably convoluted. The issue before this Court is defined by orders made by the High Court on 11 March 2026 remitting the proceedings “for determination of that aspect of the cross-appeal dealing with the costs of the proceedings below (being the application for leave to appeal in proceedings 2024/253975)”. That issue is to be determined on the papers, based on materials supplied by the parties. The Court offered an oral hearing (which was to be the morning of 16 June 2026) but expressed the view after receiving the parties’ written submissions that it would be unnecessary. Both sides thereafter indicated that they were content with that course.
In order to understand the issue to be determined by this Court, and the manner in which it is to be resolved, it is necessary to address the lengthy procedural history. The clearest way of doing so is one which departs from a strictly chronological account. The course we have taken may be summarised as follows:
These reasons commence with the history of the claims in nuisance at first instance and in this Court.
Hunt Leather Pty Ltd, Ms Sophie Hunt, Ancio Investments Pty Ltd and Mr Nicholas Zisti were the named plaintiffs in representative proceedings brought pursuant to Part 10 of the Civil Procedure Act 2005 (NSW) on behalf of persons said to have been affected by the construction and development of the Sydney Light Rail. There was a trial over six weeks in November and December 2022 of all issues concerning those four plaintiffs, who sued in private and public nuisance, in respect of three premises: a Hunt Leather store on George St in the Strand Arcade, a second store operated by Hunt Leather inside the Queen Victoria Building (QVB) which had a window which faced George St, and various restaurant businesses operated by Mr Zisti’s company Ancio at premises on Anzac Parade Kensington.
The result of the trial was that Ms Hunt and Mr Zisti failed entirely. An order was made on 3 August 2023, “Claims of the second and fourth plaintiffs dismissed”. Their claim had been confined to public nuisance. The primary judge found that they had not established all elements of that tort, and that in any event the defendant had a defence under s 141 of the Roads Act 1993 (NSW): Hunt Leather Pty Ltd v Transport for NSW [2023] NSWSC 840; 257 LGERA 1 at [947]-[981].
However, the other two plaintiffs, who are the present appellants, obtained the benefit of an order, “Judgment in favour of the first and third plaintiffs for sums to be quantified”. Hunt Leather was partially successful. It obtained a judgment in its favour in respect of the Strand Arcade shop, but failed in relation to its shop within the QVB. Ancio was successful on its claim in respect of its Anzac Parade premises. See Hunt Leather Pty Ltd v Transport for NSW [2023] NSWSC 840; 257 LGERA 1.
By a separate judgment following a further hearing in December 2023, the primary judge dismissed Hunt Leather’s and Ancio’s claim that the damages should include a 40% commission they were liable to pay to a litigation funder: Hunt Leather Pty Ltd v Transport for NSW (No 4) [2024] NSWSC 140.
The claims of the successful two plaintiffs were quantified in amounts of $3,693,164 (Hunt Leather) and $317,773 (Ancio). Even so, that success was partial. As noted above, Hunt Leather entirely failed in relation to its QVB store. Separately, both Hunt Leather and Ancio had sought damages for the entire period of construction, rather than merely the period by which the construction over the various stages of the route exceeded what had been stated in the “Initial Delivery Program” or “IDP” (this was referred to as “Case C”, as opposed to “Case A” which would yield damages for the whole period of construction).
Significantly, this litigation was representative proceedings, and so the result of the test cases affected the claims of a large number of group members. Those with claims in public nuisance are bound by the dismissal of the claims of Ms Hunt and Mr Zisti: , s 179. Those with claims comparable to those of Hunt Leather’s QVB store are, at least at the level of practical reality, faced with the need to establish that their claim should somehow be distinguished from that claim. And those with claims in private nuisance pursuant to disturbance such as was suffered by Hunt Leather’s Strand Arcade store or Ancio’s businesses will only be entitled to damages in accordance with what was described as “Case C”.
For the reasons already given, the appeal must be allowed. Turning to the cross-appeal, whether or not the partial costs order made by the primary judge and noted at [4] above discloses reviewable error is entirely arid, because the order will in any event be set aside. Likewise, the question whether damages should include a litigation funder’s fee does not arise. However, unlike the exercise of the discretion as to the costs of this particular trial, the question concerning the recoverability of the funder’s fee was the subject of full submissions, is a question of principle, and one which will recur in other cases. It is addressed below.
By judgment delivered on 17 December 2025, all members of the High Court allowed the appeal in part. All members of the Court agreed on a number of aspects of that ultimate outcome, which may be summarised thus:
All agreed that the claim based on common issues 10 and 11 had been correctly rejected by the trial judge and this Court, for the reasons given by Gordon and Edelman JJ.
All held, albeit for different reasons, that this Court had erred in allowing TfNSW’s appeal from the judgments in favour of Hunt Leather and Ancio based on private nuisance. Accordingly, all reinstated the judgments of the primary judge in favour of Hunt Leather and Ancio.
All agreed, but for different reasons, that the appellants were not entitled to “Case A” damages for the entirety of the period of disruption, but only for “Case C” damages for the disruption that occurred for periods longer than in the Amended IDP, as explained below.
In order to resolve the challenge to the exercise of the discretion as to costs by the primary judge, it is unnecessary to seek to summarise how the substantive questions of nuisance were addressed by the members of the High Court. However, it is desirable to summarise what was said concerning Hunt Leather’s and Ancio’s renewed challenge concerning damages based on “Case A”, as well as what was said as to costs.
Fact-finding in the present case was complicated by the multiplicity of ways in which Hunt Leather and Ancio chose to put their cases that TfNSW was liable to them in private nuisance and by a forensic stand-off between them and TfNSW as to the onus of proof of relevant facts.
One aspect of that dispute potentially bears on the question of costs. Just as there had been before the primary judge, there was a dispute in the High Court whether, if TfNSW were liable for nuisance, the period of liability should extend to the whole of the time of construction, or just to the period identified by the primary judge (being the period in excess of the Amended IDP). The issue was addressed in the reasons for judgment by reference to “Case A” and “Case C”.
Beech-Jones J explained at [278] that “Case A contended that there was a private nuisance for the entire period that there was a substantial interference with the appellants' common and ordinary use of the land” and at [279]-[280] that “by closing submissions at the trial Case C appears to have been confined to a claim for private nuisance in respect of only part of the period during which the construction works, according to the appellants, created a substantial interference with the appellants' ordinary use of the land, being that period for which the continuation of the construction works was not reasonable” and “the only available guide before the Court as to the period for which the construction works were reasonable was the original Initial Delivery Program as reformulated in the Amended IDP”.
As noted above, all members of the High Court rejected Hunt Leather’s and Ancio’s submission based on Case A (which is to say, a rejection of the submission that damages should be calculated by reference to the whole of the period of construction, rather than merely the amended IPD). Their Honours did so for different reasons.
Gageler CJ noted the issue at [46]-[47] and his confirmation of the reasons of the primary judge at [53] is inconsistent with Case A.
Gordon and Edelman JJ summarised Case A, Case B and Case C at [82]-[85]. Their Honours touched on the point in addressing “issue 3” (which on their view did not arise) at [135]-[137] but dealt with it dispositively when dealing with the defence of statutory authority. Their Honours addressed this at [160]-[165] under the heading “TfNSW has a partial defence of statutory authority” and concluded at [164]-[165]:
For the same reasons that it failed to establish that its conduct was “conveniently done” for this period, TfNSW failed to establish a defence of statutory authority for the period of unreasonable delay asserted by Mr Griffith and found by the trial judge to be a private nuisance.
The defence of statutory authority relied upon by TfNSW succeeds only in part; TfNSW failed to establish statutory authority for the period of nuisance found by the trial judge.
The “period of nuisance found by the trial judge” corresponds to “Case C”.
Jagot J addressed this expressly, concluding at [250] that the period of liability “must be confined to the period of liability as determined by the primary judge”. That conclusion appears to be based at least in part on the plaintiffs’ forensic decisions which led to limited findings being made at trial: at [249].
Beech-Jones J said at [299]:
As I do not accept that either s 43A of the Civil Liability Act applies to this proceeding, or the statutory authorisation aspect of the respondent's case is made out, the effect of the above is that Case C as articulated at trial is made out subject to the respondent discharging the onus it bore of proving that such use was "conveniently done". As I have explained, the forensic contest at the trial in relation to Case C concerned interference with the appellants' use of the land beyond the periods identified in the Amended IDP. As noted by Gordon and Edelman JJ, the respondent did not discharge that onus in relation to those periods.
Hunt Leather and Ancio Investments have succeeded in part in their appeals, in effect restoring the result reached by the trial judge. The trial judge made orders for costs which apportioned the costs between Hunt Leather and Ancio Investments and TfNSW, based upon matters including the unsuccessful claims brought for public nuisance and the similarly unsuccessful arguments by Hunt Leather and Ancio Investments that the damages award should include reasonable litigation funding costs [Hunt Leather Pty Ltd v Transport for NSW [No 5] [2024] NSWSC 776 at [20]-[33]]. There is no basis to disturb those costs orders.
Beech-Jones J relevantly agreed with Gordon and Edelman JJ: at [259]. The remaining members of the Court did not separately return to the partial costs order made by the primary judge.
The orders made on 17 December 2025 allowed the appeal in part, set aside the orders made by this Court and in lieu thereof ordered that the appeal and cross-appeal be dismissed with costs.
The proceedings be remitted to the Court of Appeal of the Supreme Court of New South Wales for determination of that aspect of the cross-appeal dealing with the costs of the proceedings below (being the application for leave to appeal in proceedings 2024/253975)
The primary judge entertained relatively brief oral argument on 13 June 2024, occupying 12 pages of transcript, prior to a part-heard criminal trial. The parties had previously supplied written submissions, which adopted extreme positions, and which the primary judge had evidently read in advance of the hearing. The plaintiffs sought the entirety of their costs, including the costs of the litigation funding commission, on the basis that the costs thrown away by the failure of the claims of Ms Hunt and Mr Zisti were de minimis. TfNSW sought an order that it pay one third of the plaintiffs’ costs. During the hearing, the primary judge indicated that he regarded the litigation funding commission as severable and was not going to accept TfNSW’s submission that it pay one third of the plaintiffs’ costs.
In light of the criminal trial, the primary judge was obliged to reserve. He gave reasons ten days later. The entirety of the dispositive portion of those reasons is reproduced below.
16 Looking, at least generally, at the outcome of this case, it must be that the corporate plaintiffs have won. They succeeded in nuisance and recovered substantial damages. The fact that one of the corporate plaintiffs, Hunt Leather, did not succeed in respect of one of the two stores for which it sought damages does not mean that Hunt Leather did not succeed.
17 Having said that, the matter cannot be looked at as if the plaintiffs have merely not recovered all of the damages they sought.
18 Perhaps generally, in a case as complex as this which has interwoven issues, the Court will not apportion costs between successful and failed issues, particularly if it cannot be said that the issue on which the successful party failed took up a significant portion of the hearing time (Avopiling Pty Ltd v Bosevski (2018) 98 NSLWR 171 at [173] per Payne JA, McColl and White JJA agreeing). Further, if the issues are not in some way severable, it may be difficult to make different costs orders for different issues. Yet, the Court has a general discretion to determine costs and it does not seem to me that there is anything inherently inappropriate or contrary to the interests of justice that there be some apportioning of costs where it is feasible and practical to do so.
19 Costs are not punitive and a party should not be discouraged from pursuing all issues at the same time but, when there is some clear identification of matters on which the otherwise successful party has not succeeded, it may be appropriate to vary the usual costs order. I must exercise the discretion in respect of costs fairly, reflecting not only the overall result but also the nature of the proceedings and of the issues.
20 The defendant contends for the approach of equating the individual plaintiffs’ claims in public nuisance with the corporate plaintiffs’ claims in private nuisance and then assessing what costs order should be made based on the number of stores involved. That is, the plaintiffs only won on two of the three stores. This leads to a rather generous assessment in favour of the defendant that the defendant should only pay one third of the plaintiffs’ costs.
21 The plaintiffs go to the other extreme, suggesting that the costs involved in the issues on which the plaintiff did not succeed would be de minimis.
22 I do not accept either of those positions. Dealing with common questions 10 and 11 firstly, the issues arising under common questions 10 and 11 (the litigation funding issue) were dealt with quite separately from the rest of the case. Mr Bannon SC for the plaintiffs announced at the commencement of the hearing that those issues would not be dealt with as part of the main hearing. They were subsequently listed for a separate hearing date and separate submissions were made. Evidence was only prepared after the plaintiffs achieved some success on the main issues.
23 Subject to some more general apportioning exercise, the plaintiffs should be ordered to pay the defendant's costs in respect of and relating to common questions 10 and 11.
24 The separation of the other issues is more difficult. This is because there was substantial overlap in the evidence adduced in support of the private nuisance claim and the evidence adduced in respect of the public nuisance claim. Further, there was also substantial overlap in respect of the evidence adduced in respect of Fee Zone 5 (covering the Hunt Leather Strand Arcade store) and Fee Zone 6 (covering the Hunter Leather QVB store).
25 Importantly, these proceedings are representative proceedings. The lead plaintiffs agreed to be lead plaintiffs no doubt to recover damages themselves but also for the purpose of establishing a liability on the part of the defendant for the benefit of members of the class and to determine the parameters of the class action. If the plaintiffs had succeeded in the claim in public nuisance, that would have opened up the possibility of a large number of similar claims.
26 If Hunt Leather had succeeded in respect of its claim arising out of the QVB store, then it would follow that that might have opened the potential for claims of business owners along the route who suffered different types of interference than that suffered by Hunt Leather in the Strand Arcade and Ancio on Anzac Parade.
27 As costs are compensatory, in my view, it is fair that some allowance be made in favour of the defendant for the costs in defending these potentially significant claims. I accept that there was substantial overlap in the evidence, but I do not accept the plaintiffs' position that the issue should be approached with reference to only identifying additional or extra costs incurred by the defendant in respect of the public nuisance and QVB stores. That seems to me to be an impractical approach.
28 Further, it rather ignores the fact that the claims brought by two of the plaintiffs failed altogether, such that conventionally the defendant should be entitled to an order for costs against those two plaintiffs as the defendant won against those plaintiffs completely.
29 Assessing or apportioning costs in these circumstances is very much a matter of impression. Although I accept that the plaintiffs succeeded on the major issue, that is the general entitlement to damages based on private nuisance, I am entitled to have regard to the fact that this is a case pursued by lead plaintiffs, supported by a litigation funder, with the intent of establishing guidelines for any members of the class who seek damages as a result of the interference from the Sydney Light Rail.
30 The plaintiffs chose to expand the claim to include a claim in public nuisance. Hunt Leather chose to seek damages not only in respect of the Strand Arcade store but also the QVB store where the basis of the claim was a much less direct interference, at best for the plaintiffs. Two of the named plaintiffs did not succeed at all. Again, this is significant because the variation in the costs order involves not just the successful plaintiffs not succeeding on some limited issues but two of the plaintiffs not succeeding at all. Any cost order should reflect that two plaintiffs did not succeed at all on a separate issue. Yet there was a substantial overlap in the evidence between that relied on by the corporate plaintiffs and the individual plaintiffs.
31 In my view, the just and practical way to deal with the particular costs issues arising is to simply reduce the costs payable by the defendant to the plaintiffs.
32 The appropriate order is that there be a reduction in the costs payable by the defendant to the plaintiffs of 35%. I do not intend by this order to be revoking any orders that might have been made in respect of costs prior to the hearing (if any such orders were made).
33 I thus revoke the orders I made for costs on 12 March 2024 and make the following orders:
(1) the plaintiffs are to pay the defendant’s costs as agreed or assessed as arising in respect of common questions 10 and 11;
(2) except in respect of the costs arising in respect of common questions 10 and 11, the defendant is to pay 65% of the plaintiffs’ (that is all of the plaintiffs) costs as agreed or assessed.
1. In determining that (other than in respect of common questions 10 and 11) there should be a reduction in the costs payable by the respondent to the appellants of 35% (Primary Judgment of 24 June 2024 (PJ3), [32]) the primary judge
a. erred in failing to consider the question of costs in accordance with recognised principles as to when costs should be apportioned on an issue-by-issue basis;
b. should have determined that
i. on the basis of his own findings at PJ3 [24], [25] and [30] neither the issue of public nuisance nor the issue of whether the first appellant's business at the Queen Victoria Building (QVB Store) had experienced a substantial interference with its enjoyment of land (unsuccessful issues) was clearly dominant or severable, or took up a significant par of the trial by way of evidence or argument
ii. for that reason, there should not have been any reduction in the costs payable by the respondent to the first and second appellants having regard to the unsuccessful issues; and
iii. as to the position of the individual plaintiffs, the respondent was entitled only to the marginal additional cost occasioned by their joinder which in the circumstances was de minimis; and
c. in the alternative to (b), if and to the extent it was within the proper exercise of the primary judge's discretion to order that there be a reduction in the costs payable by the respondent to the appellants, the primary judge failed to take into account a relevant consideration, and/or denied the appellants procedural fairness, in that the primary judge:
i. did not take into account the extent to which the unsuccessful issues had in fact increased costs; and
ii. did not receive any evidence as to the extent to which the unsuccessful issues had in fact increased costs, despite the appellants seeking an opportunity to put such evidence before the Court in the event that the primary judge determined to order that there be a reduction in the costs payable by the respondent to the appellants.
The appellants sought to rely on an affidavit of Ms Amanda Banton purportedly only on the question of leave to appeal but, as shall be explained further below, in fact sought to deploy it in support of its argument on the costs appeal: see at [63]-[67] below. Although the body of the affidavit was dated “June” 2024, it was sworn in Mykonos, Greece and a handwritten date 22 July 2024 was inserted. It was not read before the primary judge (who it will be recalled conducted a hearing on 13 June 2024 and delivered reasons and made orders on costs on 24 June 2024).
In her affidavit, Ms Banton stated that estimates of costs would better be prepared by a costs assessor (para 15), but relying on her own experience, she said that “the costs associated with pursuing the Public Nuisance Claims and QVB Store Claim were at most 10% of the total costs of the Primary Proceedings” (para 16). Ms Banton then explained, in seven subparagraphs, why various categories of evidence either did not concern the public nuisance or QVB claims, or else would mostly or wholly have been required in any case if the private nuisance claims had run by themselves. She added in an eighth subparagraph that only 34 paragraphs of the judgment addressed the public nuisance claims, which she says was “consistent with my estimate of the proportion of the Trial that was spent addressing the Public Nuisance Claims”.
It is plain from the affidavit that Ms Banton’s reference to “at most 10%” was a reference to those costs which were wholly and exclusively attributable to Ms Hunt’s and Mr Zisti’s claims for public nuisance. For example, she explained that “the programming and utilities expert evidence ... was relevant to both the Public Nuisance and the private nuisance claims brought by the second and fourth plaintiffs … However, the entirety of the programming and utilities evidence would have been required if only the Private Nuisance Claims had been pursued and no part of that evidence related only to the Public Nuisance Claims”.
Ms Banton said that the plaintiffs incurred approximately $18.9 million in costs to date in prosecuting the Primary Proceedings. Nothing is said as to the nature of the services, the people who performed them or their charge out rates, or anything else as to how the amount was calculated.
Ms Banton said that if the plaintiffs recovered 70% of their costs and 100% of their disbursements, the reduction in recoverable costs by reason of the 65% order would be around $5.4 million. Ms Banton did not explain that calculation, nor did she disclose what allowance (if any) had been made for the costs incurred by reference to common issues 10 and 11. However, it is likely that they are relatively small, and may be put to one side for present purposes.
If $5.4 million has been lost because of the order that TfNSW pay 65% rather than 100% of the recoverable costs, then the total amount of recoverable costs is 100 / 35 x $5,400,000 = $15.428m. The $15.428m represents a sum of recoverable costs and recoverable disbursements. On Ms Banton’s assumptions that 100% of disbursements and 70% of solicitor costs would be recoverable, the difference between total costs of $18.9m and the recoverable costs of $15.428m of $3.472m must represent the 30% of costs which are not recoverable. That leads to the conclusion that solicitor costs were $11.573m and disbursements (which are likely principally to be fees paid to counsel and expert witnesses) were therefore $7.327m.
What has been remitted to this Court by the High Court is “that aspect of the cross-appeal dealing with the costs of the proceedings below (being the application for leave to appeal in proceedings 2024/253975)”.
As noted above, the notice of appeal filed on 7 March 2024 by Hunt Leather and Ancio, which was treated as a cross-appeal, was a fresh proceeding 2023/465963 and full argument on the two grounds of the notice of appeal took place in this Court over three days in July 2024. However, rather than amending the extant proceedings in this Court, Hunt Leather and Ancio filed a further originating process, a summons seeking leave to appeal on 8 July 2024 after this Court had reserved judgment, in accordance with directions made by consent. That proceeding was given the number 2024/253975.
It is desirable to explain how this came about. Senior counsel for Hunt Leather and Ancio, immediately after announcing his appearance on the first day of the hearing, added the following (transcript 1 July 2024, p 1):
Could I just mention one matter? Last Monday, his Honour, Cavanagh J, handed down a costs judgment in relation to the main proceedings in which he ordered costs against us in the commission - part of [the] case, which we don’t cavil with, subject to any success we have on that here - but he also ordered us that we only got 65% of our costs in relation to the main appeal because we lost on public nuisance and didn’t prove any damage on fee zone six.
We wish to seek leave to appeal in relation to that. I’ve suggested a course in relation to that, and I can hand up some short minutes, which I only just provided to our learned friends this morning, but for consideration by him during the course of the next day or so, that it provides a regime whereby we file a motion on any material and submissions, and it be dealt with on the papers in due course.
BELL CJ: So, would it come in as an amended notice of appeal? Is that how it would come in, adding a challenge to an amended notice of cross-appeal?
BANNON: We need leave to appeal and then if we got leave, then yes, it would have to be an amended notice of appeal from the main proceedings.
BELL CJ: May or may not need leave, depending on its nexus to the cross appeal, actually.
Now, fee zone 6, just harking to something that’s likely to captivate your Honours about our costs to date. To say, coming back to it, we only got 65% of our costs on the basis we lost on public nuisance. But public nuisance, there’s no different evidence. And we also lost because we didn’t win on Hunt QVB Store because that store suffered no loss, that was fee zone 6. That’s the stretch between Market and King. But nevertheless, we won in showing that there was a delay, but not one which contributed to the losses of Hunt Leather, but nevertheless, would be of benefit in about potentially in relation to anybody else along that strip.
Anyway, that’s probably not going to pique your Honours’ interest on the cost issue, but it saves me having to come back later. To the extent there’s any flippancy in that, your Honours, it’s a serious issue, the amount of the costs, obviously, but we do say there are errors in the way his Honour approached it, notwithstanding the discretionary nature of it.
BANNON: I won’t be more than an hour on the funding thing. We’re still a bit up in the air on the - what do your Honours - do you have a view as to what to do about costs?
OWENS: There was some short minutes that were provided. I think I had instructions to say we consent to those. I can’t argue it. I still don’t have a notice of appeal or anything more than the brief articulation then.
BELL CJ: No, we will defer that until tomorrow.
OWENS: So, if--
BELL CJ: I’m not sure I’ve seen the short minutes, but--
OWENS: I see.
BELL CJ: --they may have been sent through.
OWENS: I think they were handed up on the first morning
MITCHELMORE JA: They were handed up yesterday.
BANNON: It was just a program for us to file things.
BELL CJ: I see.
OWENS: In any event, what - the basic plan was, there would--
BELL CJ: Yes.
OWENS: --there would be an exchange of written submissions after Mr Bannon puts on a notice of appeal or an application for leave. And--
BELL CJ: Then it will be dealt with on the--
OWENS: On the papers.
BELL CJ: Yes. Are there some agreed orders on the costs?
BANNON: Yes, I’m pretty sure they agreed. Yes, I had Mr Owens, said he agreed. I was just double-checking. I thought I had that agreement from Mr Owens, but I didn’t. The only qualification, they haven’t seen our application and if that causes some concern about the dates, then we may have to set up a revised set, but subject to that, they’re agreed.
LEEMING JA: Is anything happening in the Common Law Division?
BANNON: No. On this case?
LEEMING JA: I’m just looking. Your timetable, looking at paras 6 and 7, has submissions coming in for the next eight weeks, thereby guaranteeing you don’t get a decision in the next eight weeks, and if there are people - I’m just conscious there are hundreds of people involved in this.
BANNON: Yes. No, I think everything is awaiting the outcome of the appeal.
BELL CJ: All right. In those circumstances, I’ll make orders in accordance with the short minutes, which I will initial and date this 3rd day of July 2024.
1. On or before 8 July 2024, the respondents are to file and serve their summons seeking leave to appeal from the costs order made by his Honour Justice Cavanagh on 24 June 2024 (Leave Application).
2. The Leave Application is to be accompanied by a Draft Notice of Appeal but otherwise the requirements of UCPR r 51.12 are dispensed with.
3. The Leave Application is to be heard and determined together with argument on appeal, on the papers.
4. Any party who wishes to refer to materials relevant to the Leave Application which are not contained in the existing Appeal Books for this appeal and appeal 2023/465963 which are relevant to the Leave Application, save for the orders and reasons of his Honour Justice Cavanagh published on 24 June 2024, are to annex such materials to an affidavit filed in respect of the Leave Application.
5. On or before 22 July 2024, the respondents are to file and serve their written submissions in respect of the Leave Application and the appeal on costs, together with any affidavit evidence on which they rely.
6. On or before 12 August 2024, the appellant is to file and serve its written submissions in respect of the Leave Application and the appeal on costs, together with any affidavit evidence on which it relies and any Draft Notice of Contention.
7. On or before 26 August 2024, the respondents are to file and serve their written submissions in reply.
Thus the regime proposed by the parties saw the creation of a third proceeding, confined to the challenge to the discretion as to costs. It was given a separate number, which was the number identified in the High Court’s order.
It would have been possible, and indeed preferable, for the challenge to the costs order to have been propounded by way of an amendment to the existing proceeding 2023/465963 (which in form was an appeal but which all parties treated, sensibly, as a cross-appeal). The reference in the High Court’s order to “that aspect of the cross-appeal dealing with the costs of the proceedings below” is a reference to that proceeding.
If Hunt Leather and Ancio had amended their extant proceeding to include a challenge as to costs, as had been suggested when the challenge was first raised, they would not need a grant of leave to appeal, although they would still have needed leave to amend. The source of any qualification to the entitlement to an appeal came from s 101(2)(c) of the Supreme Court Act 1970 (NSW) which relevantly refers to appeals from orders “as to costs only which are in the discretion of the Court”. If the challenge to the order that TfNSW pay 65% of the plaintiffs’ costs were included as ground 3 of the extant appeal, that appeal would not fall within the terms of s 101(2)(c), and that would be so notwithstanding the rejection of the ground challenging the litigation funding costs: see Housman v Camuglia (2021) 104 NSWLR 615; [2021] NSWCA 106 at [84]. However, because of the choice to commence a separate proceeding, s 101(2)(c) prima facie applies.
We do not think that anything should turn on Hunt Leather’s and Ancio’s decision to file a separate summons seeking leave to appeal, thereby falling within the rule that provides that appeals which are confined to a question of costs only lie by grant of leave. That would be a triumph of form over substance, and it would not sit well with the terms of the remitter ordered by the High Court.
The preferable course, which is consistent with the form of the High Court’s order and reflects its apparent intent, as well as now conforming with the wishes of the appellants, is to treat the summons filed on 8 July 2024 in proceeding 2024/00253975 as an application to amend the extant notice of appeal filed 7 March 2024 in proceeding 2023/00465963, which hitherto has been described as the “cross-appeal”, by reference to the latest draft notice of appeal. TfNSW accepts this is appropriate.
The real significance of the above is the use which may be made of Ms Banton’s affidavit. TfNSW submitted that it followed that the need for Ms Banton’s affidavit goes away. TfNSW also complained that despite the appellants’ disavowal of any application to adduce further evidence, and their statement that the affidavit is relevant only to leave, their submissions “contain repeated references to this affidavit in a context that appears to suggest its relevance to the substantive issues on the appeal”.
Ms Banton’s evidence illustrates the injustice of the primary judge’s approach. As already noted, her estimate is that a 35% cost reduction amounts to approximately $5.4 million. However, her estimate is that the costs associated with pursuing the public nuisance claims and the claim in respect of the QVB Store were at most 10% of the plaintiffs’ total costs of the proceedings below. The $5.4 million shortfall, under the litigation funding agreements signed by the plaintiffs and funded group members, may ultimately be borne by the group.
TfNSW submits that this Court should have no regard to Ms Banton’s affidavit.
In response the appellants submitted that the affidavit is “equally applicable” to the application to amend, and the Court should not disregard it. However, the appellants made no response to the criticism that the affidavit was illegitimately sought to be used in substantive submissions. In truth, there is no answer that can be made to TfNSW’s submission on that issue.
The appellants may not through the device of reading an affidavit on the issue of leave (which ultimately was a non-issue) obtain a review by this Court of the exercise of a costs discretion on the basis of evidence which was available at first instance but which they chose not to adduce. Accordingly, as already noted, we shall disregard the submissions that invoke an injustice based on either the size of the costs, or the opinion belatedly provided by Ms Banton as to the proportion of those costs attributable to issues on which the plaintiffs failed. We note for completeness that even if that were not so, there are overwhelming difficulties attendant upon the affidavit. Those difficulties are not merely the absence of a basis for the opinion, the inherent contestability of the apportionment exercise undertaken, the properly disclosed fact that a costs assessor would be better qualified to adduce such evidence and the fact that the affidavit has not been the subject of critique by TfNSW. The most important defect is that the affidavit proceeds on the basis that what matters is the extent to which costs were incurred exclusively referable to the claims in public nuisance by Ms Hunt and Mr Zisti. The real issue in this appeal is the fact that many costs were incurred both in propounding the successful claims in private nuisance and in propounding the unsuccessful claims in public nuisance.
At the end of their grounds of appeal, and in the alternative, is a claim that the appellants were denied procedural fairness. Conventionally, this should be addressed at the outset: see the decisions collected in Hanna v Commissioner of Police [2026] NSWCA 120 at [81]. We proceed accordingly.
The appellants say that “although not recorded by the primary judge, Hunt Leather and Ancio further submitted that the primary judge did not have a proper evidentiary basis to apportion costs on an issue-by-issue basis, in the context of a lengthy trial with costs likely to run into the tens of millions”. It is best to reproduce that submission verbatim. It was made at the conclusion of counsel’s submissions in chief at the hearing as to costs:
Can I make one final submission to your Honour, which is if your Honour did consider it to reduce the cost order in my clients’ favour, the problem is your Honour doesn’t have any evidentiary basis at the moment to do that. Your Honour doesn’t have a basis to say it’s 5% or it’s 10% or any other percentage. So if your Honour was minded to order some reduction, bearing in mind my primary position is we simply shouldn’t do issue by issue, then the appropriate order would be that the defendant pay my client’s costs save for the costs in relation to QVB and that the first and third plaintiffs pay the defendant’s costs in relation to the QVB.
Maybe, at some point, an application for a gross sum order will be made where there might be an evidentiary basis to work out what the reduction should be or maybe the parties will agree or otherwise they’ll have to fight it out in taxation. That, in my submission, is all that your Honour could do on the materials your Honour has. May it please the Court.
The costs in this case run into the many millions, the tens of millions. And so, this is why a reduction of 20%, if your Honour’s putting a thumb in the air and picking out a figure and saying, it’s about 20%, that’s worth more than many cases. And that’s why your Honour simply couldn’t do it in this case without a proper basis in my submission. And that's why your Honour would have to leave it for a gross sum application or consign the parties to the nightmare of taxation, trying to sort it out in that assessment, if they can’t agree to it. That’s all I wish to say in reply, your Honour
The appellants went on to say that a reduction of 35% is of “real significance” in the present case. They invoked the affidavit of Ms Banton to contend that they incurred approximately $18.9 million in actual costs prosecuting the primary claims (excluding any amount of the funding commission that might be recoverable as costs), and say that making “reasonable assumptions as to what may be recoverable in costs assessment”, the reduction ordered by the primary judge amounts to approximately $5.4 million. It is sufficient to proceed on the self-evident basis that the pecuniary effect of the partial costs order will be very large; whether it is $5.4 million or some smaller million dollar amount is neither here nor there.
The appellants submitted that in the event that the primary judge determined to award costs on an issue-by-issue basis, he ought not do so in the context of the present case without a proper basis, referring to Australian Receivables Ltd v Tekitu Pty Ltd [2011] NSWSC 1425 at [63]. They proceeded to submit that:
The primary judge apparently considered it open to him to make a “broad brush” evaluation of the appropriate reduction, on the basis of authorities such as Avopiling Pty Ltd v Bosevski [2018] NSWCA 146; 98 NSWLR 171 at [176]. It may be accepted that the authorities support a “broad brush” approach. However, every case is different, and the approach adopted to the costs of an appeal lasting two hearing days is not necessarily the same as would be appropriate to the costs of a trial at first instance, taking place over six weeks, in circumstances where the proceedings were commenced more than four years earlier, involving extensive document production and expert evidence.
In making an apportionment, it was incumbent on the primary judge to take account of the extent to which the issues on which the plaintiffs had not succeeded had in fact increased the parties’ costs: Doppstadt at [18]. Nothing in the primary reasons indicates that his Honour took this into account, apparently because his Honour considered it to be “impractical” to identify the additional or extra costs incurred by TNSW in respect of the public nuisance and QVB Store claims. … His Honour appears to have settled on the reduction of 35% simply by applying his Honour's view as to the degree of success which the plaintiffs had enjoyed.
The appellants said that the primary judge had two options: making offsetting costs orders, requiring TfNSW to pay the plaintiffs’ costs but also requiring the plaintiffs to pay TfNSW’s additional costs occasioned by the inclusion of the QVB store and public nuisance claims, or else he could have adjourned the costs hearing so that evidence could be adduced as to the extent of the costs of those issues, sufficient to enable a “broad brush” reduction on a proper, informed basis. The appellants said that it was not open to the primary judge “to reduce the plaintiffs' costs by an arbitrary percentage, worth millions of dollars, based only on his own impressionistic view of the plaintiffs’ degree of success”.
The respondents submitted that the appellants’ reliance on the multi-million dollar consequences did not assist them. “The scale of the proceedings affects the dollar consequences of any percentage order, not the appropriateness of making one”. That with respect must be right. Contrary to this, the appellants said that this missed the point, because:
[a] two-day trial may be able to be apportioned as a matter of instinct and impression; the same cannot be said of the primary proceedings, which are a complex class action that had been ongoing four years as at the date of the initial trial, were heard over a six week trial and had costs running into the many millions of dollars. The scale of the proceedings and absence of any evidentiary basis for a 35% reduction worth millions is directly relevant to whether the exercise of discretion was sufficiently unreasonable and unjust [to] be a House v R error.
But that appeal to rhetoric is no answer to the point; it merely restates the assertion. The notion that some different legal principle is involved, or that a different level of evidence is essential, before the exercise of the costs discretion when costs are $200,000 or $2,000,000 or $20,000,000 is misconceived. True it is that the parties might seek, if they so chose, to adduce additional evidence if the amounts were large. One premise of s 60 of the Civil Procedure Act is that the larger the amount at stake, the more appropriate it may be to spend more time and money preparing evidence on that issue. But the appellants chose not to take that course. There was no suggestion there was a lack of time to adduce such evidence as they wished to adduce on the question of costs (the main judgment had been delivered almost 11 months earlier).
The appellants did not seek an adjournment before the primary judge. But they said that that did not matter, because “they squarely raised the submission that there was no evidence to support an apportionment” and “an alternative available to the trial judge was to permit that circumstance to be rectified”.
We do not accept that submission. The issue presently being considered is whether the primary judge proceeded in a way which was procedurally fair. We do not accept the proposition that a party who chooses to litigate an issue on a certain basis, saying that only limited options are available on the evidence, can complain that there has not been a procedurally fair hearing if that contention is rejected and the issue is determined on the basis of the evidence before the Court. Separately from that, a litigant may consider that the issue was not determined correctly, and we shall address this shortly when dealing with the balance of this sub-ground, but there is nothing procedurally unfair in rejecting the submission. To the contrary, the court proceeded as the respondent had sought, and as the appellants must have known was a possibility, and in accordance with s 56 of the Civil Procedure Act.
Another way of putting this is that the proposition that the appellants were entitled in effect to have two bites at the cherry must be rejected. The appellants say that they were entitled to a further opportunity to adduce evidence if the primary judge rejected their submission that they were entitled to the entirety of their costs, and rejected their submission that there should not be a partial order. This is contrary to basic aspects of litigation. A party cannot ordinarily litigate on the basis that if a submission is not accepted, the party is entitled to return with better evidence on the point.
It is convenient to summarise the approach adopted by the primary judge.
First, his Honour identified the costs of common questions 10 and 11 as severable, and made a costs order in relation to those costs. No complaint is made of that element of the exercise of discretion.
Secondly, his Honour said that costs were not punitive and the discretion had to be exercised fairly: at [19]. Again, no complaint is made of that, nor could it be.
Thirdly, his Honour considered whether this was a case where the plaintiffs had merely obtained a judgment less than the maximum they had sought, such that there was no reason to make a special order as to costs. His Honour rejected that characterisation. It may be noted that the corporate plaintiffs failed on “Case A”, which was their best case, but the primary judge did not rely on this in order to reduce the costs to which they were entitled. Instead, his Honour did not accept the proposition that the costs involved where the plaintiffs did not succeed were de minimis. To the contrary, he said at [24] there was “substantial overlap” in the evidence adduced in support of the private nuisance claim and the evidence adduced in support of the public nuisance claim. He added at [24] that there was substantial overlap in the evidence in respect of Zone 5 (Hunt Leather’s Strand Arcade store) and Zone 6 (Hunt Leather’s QVB store). There is no challenge to that, which is a finding of fact based on his Honour’s view of the evidence relied on at trial in the cases propounded by all four plaintiffs.
Fourthly, his Honour did not accept that the appropriate costs order would reflect identifying only those additional or extra costs incurred by the defendant in respect of the public nuisance claim and QVB store: at [27]. This is the aspect of his Honour’s reasons which is said to give rise to an error of principle, to which we shall return.
Fifthly, his Honour was conscious that the defendants had succeeded entirely against Ms Hunt and Mr Zisti on their claims for public nuisance, noting at [28] that “the claims brought by two of the plaintiffs failed altogether, such that conventionally the defendant should be entitled to an order for costs against those two plaintiffs as the defendant won against those plaintiffs completely”, and at [30] that “the variation in the costs order involves not just the successful plaintiffs not succeeding on some limited issues but two of the plaintiffs not succeeding at all”. Of course, as a statement of the outcome of the trial, that is unexceptional.
The difficulty faced by his Honour was how the discretion as to costs should be informed by the fact that Hunt Leather and Ancio had incurred substantial costs in respect of private nuisance, while Ms Hunt and Ms Zisti had incurred substantial costs in respect of public nuisance, and there was a substantial overlap in those two costs. Had there been separate trials, the starting point would be that Hunt Leather and Ancio would have been entitled to their costs on the issue of private nuisance against TfNSW, but also TfNSW would have been entitled to its costs on public nuisance against Ms Hunt and Mr Zisti. But there were not separate trials. Further, the single trial was the trial of a representative proceeding, with consequences for many other group members.
The appellants acknowledged the need to identify House v The King (1936) 55 CLR 499; [1936] HCA 40 error. They said such error was manifest because the discretion to apportion costs by reference to issues requires special or exceptional circumstances. They relied on statements to that effect in Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 as well as Cretazzo v Lombardi (1975) 13 SASR 4 at 16 and Tonna v Mendonca (No 2) [2020] NSWSC 306 at [170].
The appellants submitted that there was error in departing from the established principle. But the decisions on which they rely did not address the essential difficulty confronted by and grappled with the primary judge here, which was the same costs being incurred by four separate plaintiffs, two of which succeeded and two of whom failed.
A deal of attention was given to the decision of Einstein J in Currabubula Holdings Pty Ltd v State Bank of NSW [2000] NSWSC 232. The high point of the appellant’s submission was the endorsement in that case at [104] of a statement from a Canadian textbook on costs:
Where several plaintiffs sue by the same solicitor, and one succeeds while the others fail, the successful plaintiff will be entitled to recover the whole of his costs from the defendant and not merely a proportion. The unsuccessful plaintiffs will be obliged to pay the defendant’s costs as occasioned by their having been joined unless the Court otherwise orders.’
To recapitulate: the purpose of the rule of thumb, applied to the case of multiple, variously successful and unsuccessful defendants, is to prevent a plaintiff who has only been partially successful, from being unjustly enriched and to prevent unsuccessful defendants from being unfairly burdened by the thrusting onto them of the whole of the plaintiff’s costs, not referable to the action against one or other defendants. That purpose, applied to the present situation mutatis mutandis, would not be achieved by an application of the rule of thumb. As the extracts of the judgment of 3 May 1999 earlier set out make plain, the vast majority of the trial concerned the liability of the Bank to Currabubula. On those issues the Bank was substantially unsuccessful. I particularly accept as correct the submissions of Mr Gleeson set out in the italicised sections of paragraphs 24 and 27 of the judgment. The purpose of joining Paola was only to address the matter of locus standi. Most of the costs incurred by the Bank in defending itself against the second defendant, Paola, would have been incurred even if it had faced only one defendant, Currabubula. To apply the rule of thumb in this circumstance is to require Paola Holdings to immunise the Bank against half the joint costs incurred by Currabubula in pursuing an action in which it was essentially successful. Not only would those costs have been incurred in any event had Paola Holdings not been joined but, a fortiori, the majority of the costs were substantially concerned with the pursuit of Currabubula’s claim, Paola Holding’s role in the litigation being subsidiary to Currabubula’s. Application of the rule of thumb in this instance would result only in a windfall gain to the Bank at the expense of Paola Holdings. To my mind, this case falls within the approach taken by Singleton LJ in Korner v H Korner & Co Ltd (supra, at 17): no authority compels the Court to follow the rule in every class of case and the Court will not do so where its application would, as here, achieve an injustice.
First, notwithstanding the fact that the formulation in the Canadian textbook is expressed inflexibly, that cannot be the law in New South Wales. Indeed, as Einstein J explicitly recognised in the concluding sentence in the passage reproduced above, courts are not compelled to follow any strict rule in complex cases such as the present.
Secondly, the Canadian textbook, and Einstein J’s decision, were a reaction to a so-called “rule of thumb” worked out in pre-Judicature chancery litigation where a plaintiff succeeded against one but not all defendants. The perceived need to join all parties made such cases a recurring phenomenon before the Judicature reforms (these days, proceedings are not defeated for want of parties: see UCPR r 6.23 and the account in Boyd v Thorn (2017) 96 NSWLR 390; [2017] NSWCA 210 at [96]-[102]). Under the pre-Judicature regime, when costs came to be taxed, the successful plaintiff was allowed a pro rata share of common costs, and all of the costs solely referable to the claim against that defendant. In Currabubula, Einstein J departed from that rule where there were two plaintiffs, one of whom had only been joined to address an issue of standing, and where most of the costs incurred by the bank in responding to that claim would have been incurred in any event.
Thirdly, no one suggested that the pre-Judicature “rule of thumb” should be applied in the present case. However, the plaintiffs strenuously submitted that there was House v The King error in departing from the approach taken in Currabubula. With this we do not agree. Neither Currabubula itself nor the handful of decisions which have followed it on which the appellants relied were representative proceedings. We incline to the view that it would be unjust to apply the approach in Currabubula to the present case, where the failure of the claims by Ms Hunt and Mr Zisti carried with it the resolution in favour of TfNSW of all claims which might be brought against it based on public nuisance. That is because it is ordinarily sensible, in funded representative proceedings, to consider the costs of multiple representative plaintiffs as a single unit. But it is not necessary to go so far as to express a concluded view. It is sufficient to say that there is no House v The King error in not applying Currabubula.
Fourthly, as the respondents observed, Parker J explained that the rule identified by Einstein J is a rule of assessment, rather than a rule as to the exercise of the cost discretion: Makaritis v Makaritis (No 3) [2023] NSWSC 409 at [120]-[121] (an appeal was dismissed but there was no separate challenge to the exercise of the costs discretion: Hellenic Property Holdings Pty Ltd v Makaritis [2025] NSWCA 13). Parker J said (at [120]-[121]):
Costs are in the court’s discretion and the court has power to make an order departing from the usual costs order in favour of a successful party which covers all of the common costs of the claim or defence, as the case may be. In particular, the court may, in a proper case, make an order that the successful co-defendants should receive only a share of the common costs (referred to by Campbell JA in Wardle as a “per defendant” order). But if the “rule of thumb” only comes into play at the time of assessment, it would have no direct bearing on whether the court should make such an order, and caution may be required in doing so. A per-defendant order may operate unfairly where, unknown to the court at the time it makes the order, the defendants have agreed among themselves on an unequal division of the costs of the defence (under this State’s system of external assessment of costs, there is no possibility of changing the rules of court, as Singleton LJ suggested in Korner, so as to allow an order once made to be amended so as to clarify or overcome the effect of the “rule”).
Even if the “rule of thumb” falls to be applied at the time the court makes costs orders, there is ample authority that it is only to be applied in appropriate circumstances: apart from Korner, see James at [54], [56]; Loureiro v Mac Aus Unit Pty Ltd (No 3) [2022] NSWSC 358 at [22]-[25].
In order to resolve this appeal, the only question is whether there was House v The King error in the trial judge not applying the approach in Currabubula. We do not think there was. The failure by the primary judge to follow what in substance would have been an extrapolation of what was said in Currabubula in the circumstances of this representative proceeding does not disclose House v The King error.
Stepping back from the detailed submissions, it may be observed that, ultimately, the appellants denied that this was a case where there was a “mixed outcome”. That submission ignored the fact that Ms Hunt and Mr Zisti failed. Their failure was not de minimis, on at least two bases. The first is that the primary judge rejected as a matter of fact the proposition that the costs solely attributable to their claims were de minimis. Secondly, the failure of the claims in public nuisance by Ms Hunt and Ms Zisti as representative plaintiffs carried with it the failure of all group members’ claims for public nuisance.
Pausing there, we favour the view that it would be both unprincipled and unfair to set at nought the failure of the claims in public nuisance, coupled with the fact that substantial costs were incurred by both sides in adducing evidence which was relevant bot**h to the corporate plaintiffs’ successful claims in private nuisance and the natural person plaintiffs’ unsuccessful claims in public nuisance. This is one of the fundamental difficulties with these grounds of appeal. But once again we do not need to go so far. The same considerations suffice to enable us to conclude that there was no appellable error in the trial judge taking the course he did.
What then was the primary judge to do? It is ordinarily undesirable to make an issues based costs order. If both sides are each entitled to the costs of some but not all issues, then it will be necessary for there to be agreement or assessment of not one but both side’s costs. Further, that process will be complicated because it is often contestable whether costs relate solely to one issue or more than one issue, and if the latter how those costs are to be apportioned: the respondents pointed to a recent example of this in this Court: The Owners – Strata Plan No 31337 v Balacco (No 2) [2026] NSWCA 84 at [16]. Such an order may carry with it a very significant increase in contestable issues.
As a general principle, issues based costs orders tend to be made when the costs are “severable”, which is to say, readily identifiable, and independent of the balance of the costs. In the present case, the costs of the claim for damages based on the litigation funding premium answered that description: there was a separate hearing, on separate evidence, of that issue.
Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation: James v Surf Road Nominees Pty Ltd (No 2), citing Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 272.
Those principles expose the absence of any House v The King error in the primary judge’s decision. There was a mixed outcome of the multiple causes of action litigated on a final basis before the primary judge. The question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation.
These grounds are not made out.
The appellants’ final submissions were that the primary judge lacked a proper basis to attribute a percentage apportionment.
As noted above, the appellants referred to cases where courts have refrained from making such orders because the court is not satisfied that there is a sufficient evidentiary basis for them, notably Australian Receivables Ltd v Tekitu Pty Ltd [2011] NSWSC 1425 at [63]. They said that the primary judge was bound to have regard to the extent to which the issues on which the plaintiffs had not succeeded had in fact increased the parties’ costs, citing Doppstadt (No 2) at [18], and that his Honour had not done so. They acknowledged that it was open to the primary judge to make offsetting costs orders, or to adjourn the matter for better evidence, but denied that it was open to him to make the orders he made.
We do not accept that submission. The order that results from the exercise of the discretion as to costs must be one that is fair in all the circumstances. There will be cases where the court cannot be satisfied that any broad-brush assessment would be fair, in which case the matter may be left to assessment or (in an exceptional case) the parties might be given an opportunity to adduce further evidence. But the primary judge was in a privileged position. Further, arithmetical exactitude is illusory, and it is well-settled that the matter is one of impression. The primary judge was plainly satisfied that the order that he made was one which was fair.
The appellants said that the approach of refraining from making a partial costs order is “commonly taken, particularly in complex cases”. That empirical proposition was asserted to be supported by two examples: James v Royal Bank of Scotland [2015] NSWSC 970 and Johnson Tiles Pty Ltd v Esso Aust**ralia Pty Ltd (No 2) [2003] VSC 212. Two examples do not establish that an approach is common. Even if that be the case, the issue is whether there is House v The King error, and that would not be established merely by the trial judge declining in the particular facts before him not to follow an approach which is commonly taken.
It is also not difficult to see why the order that TfNSW pay not only its own costs, but 65% of the plaintiffs’ costs was open to the primary judge. That order recognises the reality that the solicitors and experts and counsel were mostly or entirely retained by all plaintiffs and paid for by the litigation funder, such that it is artificial to distinguish the costs of Hunt Leather from the costs of Ms Hunt. It recognises that in relation to the costs incurred which bore upon both the corporate plaintiffs’ claim in private nuisance and the natural person plaintiffs’ claim in public nuisance, the former succeeded but the latter failed. It recognises that the litigation has consequences for all members of a potentially large class, and that there was real benefit to TfNSW in defeating the claims in public nuisance. Once it is recognised that not only was it sensible to avoid an issues based exercise of discretion, but also that it was open to make allowance for the natural person plaintiffs’ failure and TfNSW’s success on public nuisance, then a fraction along the lines reached by the primary judge is well within the range of available exercises of discretion. True it is that the proportion of 65% at which the primary judge arrived was based on matters of impression and evaluation, rather than actual evidence of the costs in fact incurred, but the appellants chose to invite the Court to exercise its discretion without such evidence, and cannot now complain that his Honour adhered to authority permitting that approach. Moreover, the trial judge was uniquely well placed to form the impression and make the evaluation he did given his intimate familiarity with the issues in, evidence adduced and submissions made during the trial.
For the reasons given above, it is desirable formally to clarify that the application remitted by the High Court to this Court is to be treated as an application to amend the appeal filed on 7 March 2024 in proceeding 2023/00465963 which has been treated by both sides and by this Court and the High Court as a cross-appeal. That amendment should be allowed. However, the substance of the new ground must be dismissed. There is no reason for the costs of this application not to follow the event.
The Court makes the following orders:
1. Treat the summons filed on 8 July 2024 in 2024/00253975 as an application to amend the cross-appeal, being the notice of appeal filed in 2024/00465963.
2. Grant leave to amend the cross-appeal by adding as ground 3 the ground attached as a draft notice of appeal to the summons filed on 8 July 2024.
3. Dismiss ground 3 of the cross-appeal as amended.
4. The appellants to pay the respondent’s costs of ground 3 of the cross-appeal, including the costs of the summons filed on 8 July 2024 in 2024/00253975.
**********
Hunt Leather Pty Ltd
Transport for NSW
[2026] NSWCA 120
[1936] HCA 40
[2026] NSWCA 84
(2017) 96 NSWLR 390
(1975) 13 SASR 4
(1936) 55 CLR 499
(2021) 104 NSWLR 615
(2024) 115 NSWLR 489
(1993) 26 IPR 261
The Court treated the 8 July 2024 summons as an application to amend the cross-appeal, granted leave to add ground 3, dismissed ground 3, and ordered the appellants to pay the respondent's costs of ground 3, including the summons costs.
These reasons then deal with the two judgments delivered by the High Court, the latter varying the order made in the former, and remitting part of the “cross-appeal” to this Court.
We then return to the decision at first instance on costs, and the procedure by which an appeal from that decision was brought.
We then address whether it is necessary that there be a grant of leave and the use which may be made of an affidavit concerning costs sworn by Ms Banton after the decision of the primary judge.
Thereafter, we address the grounds of appeal, commencing with the complaint that there was a denial of procedural fairness by the primary judge, and then addressing whether his Honour’s decision as to costs departed from legal principle or was not founded on evidence.
TfNSW appealed as of right from the final judgments ordered against it. Ms Hunt and Mr Zisti did not seek to cross-appeal from the dismissal of the claims made by them based on public nuisance. Hunt Leather did not seek to cross-appeal from the dismissal of its claim based on the QVB store. However, Hunt Leather and Ancio did seek to cross-appeal from the judgment in their favour, on two bases. Ground 1 of their notice of appeal filed on 7 March 2024 maintained that the primary judge should have found that “the construction without more constituted an actionable nuisance”, with the result that “the period of actionable nuisance was the entirety of the occupation period in respect of each Fee Zone”. That is to say, ground 1 sought to increase the judgment amounts by reference to damages based on “Case A”. Ground 2 challenged the dismissal of the claim to recover damages for the 40% funding commission.
Procedurally, it is important to notice two consequences of what occurred.
First, Hunt Leather and Ancio had filed a notice of appeal. They were entitled to file a cross-appeal pursuant to UCPR r 51.17 and the two bases in grounds 1 and 2 of the notice of appeal, if made out, would have altered the calculation of the damages to which Hunt Leather and Ancio were entitled.
Secondly, because Hunt Leather and Ancio filed a separate notice of appeal, which is an originating process, it was a separate proceeding and was allocated a new proceeding number in accordance with UCPR 4.11(1). That number was 2023/00465963 (it was given a 2023 file number because a notice of intention to appeal was filed and served in late December 2023).
It will be convenient hereafter to refer to the appeal filed by Hunt Leather and Ancio on 7 March 2024 as the cross-appeal.
Some three months after, on 13 June 2024, the primary judge heard argument on the question of costs. His Honour delivered judgment on 24 June 2024: Hunt Leather Pty Ltd v Transport for NSW (No 5) [2024] NSWSC 776. Those are the orders which are the subject of this latest appeal. The entirety of the dispositive part of his Honour’s reasoning is reproduced below.
The judgment on costs was delivered shortly prior to the hearing of TfNSW’s appeal and the cross-appeal, which had been set down on 1, 2 and 3 July 2024. Significantly for present purposes, when the original appeal and cross-appeal were heard by this Court in July 2024, the cross-appeal was treated as being expanded to challenge the order that TfNSW pay 65% of the costs of the claims for private nuisance, as will be explained below.
This Court by a joint judgment allowed TfNSW’s appeal and dismissed the cross-appeal: Transport for NSW v Hunt Leather Pty Ltd; Hunt Leather Pty Ltd v Transport for NSW (2024) 115 NSWLR 489; [2024] NSWCA 227. The appeal was allowed on the basis that the trial judge had erred in finding that the interference caused by TfNSW and its contractors during part of the period of construction had been unreasonable. It followed that both grounds of the cross-appeal fell away, although this Court addressed the second ground (concerning the 40% litigation funding commission) separately, rejecting it even if the plaintiffs had succeeded in nuisance.
When the parties’ announced their appearances on 1 July 2024, senior counsel for Hunt Leather and Ancio stated that he appeared for the respondents on the appeal and the cross-appellants on the cross-appeal. That nomenclature reflected the parties’ written submissions, and it reflected the usual course when both sides seek to challenge different orders made by the primary judge. This Court followed the approach of the parties and treated the notice of appeal filed in proceeding 2023/465963 as a cross-appeal, albeit without an explicit order to that effect. Hence this Court ordered that the cross-appeal be dismissed.
We shall return to the procedural mechanism adopted by Hunt Leather and Ancio to agitate their application to challenge the costs order, because in fact a substantive question – whether or not the appeal is as of right – turns upon this. We address this under the heading “Leave to appeal?” below.
Having found that the entirety of the proceedings should be dismissed, and that costs followed the event both on appeal and at first instance, it was unnecessary to deal with the challenge to the partial costs order made by the primary judge. This Court explained the course it took at [182]:
Finally, Ms Banton explained that there was a funding agreement in place.
There is no reason to doubt that the costs of running a trial over six weeks, and with the associated preparation, were very high. There is also no particular reason to think that the recoverable costs were as high as Ms Banton deposes. Ms Banton appropriately acknowledges that a costs assessor would give better evidence of what would be recoverable. The proposition that 70% of solicitors’ costs and 100% of all disbursements would be recoverable, in a case where no less than $18.9m has been spent in the trial of four lead plaintiffs over six weeks, warrants careful scrutiny before it be accepted. There may be good reason for those costs, especially the solicitors’ costs, to be as high as they were, but on their face they are very high. We are conscious of a familiar problem in representative proceedings and costs, namely, the lack of the ordinary oversight by a single client before costs are incurred. The litigation funder will commonly be obliged to pay all costs up to a capped maximum, and may have little control over the way those costs are incurred, while neither the representative plaintiffs still less the group members may have any incentive to impose discipline upon the costs being incurred. This is an aspect of the moral hazard associated with representative proceedings explained in B Chen and M Legg, “An Economic Perspective on Costs in Australian Class Actions” (2022) 45(3) Melbourne University Law Review 950 at 956-958; see also J Kirk, “The Case for Contradictors in Approving Class Action Settlements” (2018) 92 ALJ 716 at 725. It coheres with the phenomenon that in at least some representative proceedings, grossly excessive costs have on occasion been incurred. See for an extreme example Re Zita (a solicitor) [2022] VSC 354 (Banksia Securities class action). There are many occasions when referees have been appointed to review the reasonableness of costs (examples may be found in Caason Investments Pty Ltd v Cao (No 2) [2018] FCA 527 [121]-[123]).
Three things may be noted relevant to the issues before this Court. First, evidence concerning the proportion of costs which were incurred solely by reference to issues on which the plaintiffs failed was not placed before the primary judge when exercising the discretion as to costs, and if it had been, it is likely in this litigation where the parties have hitherto shown no reluctance to dispute issues and to adopt extreme positions that there would have been a controversy about it. Secondly, no reliance could be placed on that affidavit on the substance of the appeal because it would be impossible to satisfy the conditions in s 75A of the Supreme Court Act 1970 (NSW) on the adducing of further evidence. To the extent that reliance was sought to be placed on the affidavit by the appellants in their submissions, Ms Banton’s evidence should be rejected (see further [65]-[67] below). Thirdly, nothing turns on whether the plaintiffs’ recoverable costs are $3 million or $8 million or $13 million. For the reasons which will be given below, the only issue is whether there was appellable error in the apportionment made by the primary judge that all four plaintiffs obtain 65% of their costs excluding the costs of the litigation funding commission.
There is force in this submission. For example, concerning the claim that there was a denial of procedural fairness, the appellants submit:
The primary judge also expressly bore in mind that the proceedings were representative proceedings, and that the dismissal of the claims of Ms Hunt and Mr Zisti would be of considerable value to TfNSW, as would the dismissal of the claim based on Hunt Leather’s QVB store. There could be no error in having regard to those matters. They were not extraneous to the discretion to order costs, but rather an important aspect of it. This point warrants some elaboration. This is not a case where, say, there were two plaintiffs (say, a natural person and a company owned and controlled by that person) with a single claim, where one plaintiff succeeded and the other failed. This is a case where there were distinct causes of action on the part of the successful and unsuccessful plaintiffs, and the consequences of both the corporate plaintiffs’ success and the natural person plaintiffs’ failure are significant for other group members and the overall liability of TfNSW.
There was one further potential complexity, namely, that Hunt Leather failed in relation to its QVB store. The primary judge was alert to the fact that substantial evidence had been directed to Zone 6, in respect of which Hunt Leather failed, as would other class members with comparable claims. Indeed, it is quite possible that there would be more, perhaps many more, group members with claims based on premises comparable to Hunt Leather’s QVB store (for example, persons who occupied other shops in the QVB, and other similar tenancies in centres along the route), than group members whose premises were accessed directly from George St or other roads affected by the construction.
Bearing those matters in mind, we turn to the particular challenges made to his Honour’s exercise of discretion.
The principles applicable where there is partial success are well established. They may be found in Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [18]-[21]. Significantly for present purposes, the reasons included at [19]:
This ground is not made out.