Can a determination of a separate question in a proceeding trigger a costs order on the ordinary basis?

Relying on the judgment of Bergin CJ in Eq (sitting as a Judge of Appeal) in Floruit Holdings Pty Ltd v Sebastian – Builders and Developers Pty Ltd [2009] NSWCA 411, 7:

The fact that the appellants may not be successful in the main case in the District Court, by reason of a failure to prove causation or for any other reason,does not in my view disentitle them to their costs of the hearing in relation to the separate question, which was a discrete issue. The appellants should have their costs of the hearing of the separate question in the District Court.

Reserving costs, especially in complex litigation, on interlocutory questions will often better “reflect the justice of the situation” for the reasons explained by Spender J inO’Keefe Nominees Pty Ltd v BP Australia(No 2) [1995] FCA 1079.

Relying on Ajkay v Hickey & Co. Pty Ltd [2011] NSWSC 822, Pembroke J (at [21]) said:

The question is whether there should be a costs order on the separate question at all or whether I should wait until final resolution of the proceedings. Sometimes the determination of a separate question will resolve the whole proceedings. Sometimes it will only resolve part of the litigation, leaving much for further hearing. Even if the separate question only resolves part of the litigation, the issue will have been identified because of its perceived legal or practical significance to the parties. As a matter of policy, my view is that unless there are compelling reasons to the contrary, orders for the costs of a separate question should be made at the time of the separate hearing and should not await the conclusion of the proceedings.

UNIFORM CIVIL PROCEDURE RULES 2005 – REG 42.7

42.7 Interlocutory applications and reserved costs

(1) Unless the court orders otherwise, the costs of any application or other step in any proceedings, including:

(a) costs that are reserved, and

(b) costs in respect of any such application or step in respect of which no order as to costs is made,

are to be paid and otherwise dealt with in the same way as the general costs of the proceedings.

There are cases where the court will apportion costs where an issue “is clearly dominant or separable”: Waters v PC Henderson (Aust) Pty Ltd (1994) 254 ALR 328 at 330 – 331;Turkmani v Visvalingam (No 2) [2009] NSWCA 279 at [12] and [15].