In this Insight, Legal Costs Consultant Kieran Pulley of Rose Legal Costing examines the recent Court of Appeal decision in Sader v Elgammal [2025] NSWCA 111, which reinforces the discretionary nature of costs orders in Class 4 proceedings before the Land and Environment Court.
The article explores the procedural context of the case, the Court’s reasoning in dismissing the appeal, and the broader implications for parties seeking to challenge costs rulings. It serves as a reminder that appellate intervention in costs matters remains rare, and that the threshold for disturbing discretionary orders is high.
Background
The parties reside on neighbouring properties in Connells Point, NSW. Disputes arose in the Land and Environment Court (LEC) following development works undertaken on the first respondent’s land, relating to conditions imposed under the original construction certificate. That certificate was subject to multiple modifications, the most recent of which excluded both a landscape plan (referred to as Landscape Plan Rev F) and an External Works Plan. The proceedings were ultimately dismissed by consent.
Appeal
The New South Wales Court of Appeal considered a procedural issue relating to costs in Class 4 proceedings under the Uniform Civil Procedure Rules (UCPR). It is worth distinguishing this from a Class 1 merits appeal, where the usual approach is for each party to bear their own costs.
The central question before the Court of Appeal was whether the primary judge had erred in declining to make a costs order following an application brought under UCPR 42.20(1). The appellants submitted that the decision not to award costs was mistaken and that the circumstances of the case justified a different outcome.
However, the Court; comprising Kirk JA and Free JA, with Griffiths AJA, dismissed the appeal. It found that the matter did not raise any question of legal principle or public importance and that the appellants had failed to establish a clear injustice beyond what was merely arguable. As a result, the Court refused leave to appeal and ordered the appellants to pay the respondents’ costs.
Consideration
The Court noted that appellate courts are generally “loath” to interfere with costs orders, as emphasised in Rickus v Motor Trades Association of Australia Superannuation Fund Pty Ltd [2010] FCAFC 16; 265 ALR 112 at [113] (per Jacobson, Siopis and Foster JJ). There is also a well-established reluctance to encourage appeals solely on costs issues, as reaffirmed in Ouwens Casserly Real Estate Pty Ltd v Harcourts South Australia Pty Ltd [2017] SASCFC 69 at [7] (per Kourakis CJ, Peek and Stanley JJ).
In this case, the Court of Appeal considered it was open to the primary judge to characterise the resolution as a compromise rather than a capitulation. This view was reinforced by the applicants’ expressed willingness to abandon various claims for relief.
Key Learnings
This case underscores the discretionary nature of costs orders and the high threshold for appellate intervention in such matters. Legal practitioners and parties involved in similar proceedings should approach appeals on costs with caution, keeping in mind the deference typically afforded to primary decisions.
Our data indicates that a smaller proportion of matters in the Land and Environment Court result in costs orders, reflecting the elevated threshold that applies in this jurisdiction.
About Kieran Pulley, Legal Costs Consultant
Kieran Pulley is a senior Legal Costs Consultant Sydney with significant experience advising clients across New South Wales and Victoria on complex costs disputes. As part of the team at Rose Legal Costing Melbourne, Kieran regularly acts in solicitor/client and party/party Legal Costs Assessments Sydney and frequently assists with preparing expert reports in support of Security for Costs applications and related Legal Costs Dispute Resolution Melbourne matters.
