Case Principles Governing Cost Awards Restated

June 16, 2015

Posted on: Jun 16, 2015

The Employment Court recently made two clear statements about costs awards:

A successful party to litigation may claim a contribution to its costs in seeking costs.
The ability of a successful party to recover GST should be taken into account.

The Employment Court said that although it was relatively rare for parties to seek costs on costs in the Employment Court, there was no reason in principle why a party which is put to the time and expense of pursuing costs ought not to be able to claim a reasonable contribution towards them. It said that was consistent with the basic principle that costs should follow the event. It said in principle a successful party to litigation could claim a contribution to its costs in seeking costs.

The Employment Court also said that the ability of a successful party to recover GST should be taken into account when determining actual and reasonable costs. Judge Ford considered this approach to GST in Sai Systems Ltd vBird [2015] NZEmpC 13 and said:

I have a preference for the High Court GST-neutral approach although I see no reason why this Court, in the exercise of its discretion, cannot take the GST component into account in a general way in the award-making process if it deems it appropriate and just.

Booth v Big Kahuna Holdings Ltd [2015] NZEmpC 4

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