The Court held that where a successful party abandons significant issues prior to or during trial, causing wasted costs to the opposing party, this justifies a reduction in the costs payable to the successful party, but does not justify ordering the successful party to pay the unsuccessful party's costs absent exceptional circumstances. Importantly, the Court also held that where a trial judge determines a clearly dominant and separable issue in the alternative and the otherwise successful party would have failed on that issue, the costs of that issue may be separated out and the costs order reduced accordingly, applying the Michael Hill (No 2) framework. The Court acknowledged this reasoning may be in tension with aspects of Michael Hill (No 2) at [22] but considered it consistent with the Court of Appeal's repeated statements that trial judges should generally determine all issues, and with the fairness principles underlying costs discretion.
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