Zurich Australian Insurance Limited v CIMIC Group Limited & Ors (No 2)

1. [1]

   THE COURT: This Court handed down judgment and made orders in these appeals and cross-appeals (together, the “appeal proceedings”) on 18 September 2024: Zurich Australian Insurance Limited v CIMIC Group Limited & Ors [2024] NSWCA 229 (the “Appeal Judgment”). In the Appeal Judgment, we expressed (at [630]-[638]) some broad conclusions of principle as to where costs of the appeal proceedings should lie. However, having regard to the multiplicity of issues raised, we directed that the parties should confer and endeavour to reach agreement as to the costs of the appeal proceedings, failing which submissions should be filed with any disputed issues to be dealt with on the papers. Consistent with these orders, and subsequent orders extending time for compliance and permitting short reply submissions to be filed, submissions were filed by all parties to the appeal on 13 November 2024 and by some parties on 22 November 2024. These submissions reflect some measure of agreement between some parties, but no unanimous agreement as to whether this Court should make “issues based” costs orders, nor as to what orders should be made as to costs. It is thus necessary for this Court to resolve all issues as to the costs of the appeal proceedings within the parameters of our conclusions of principle in the Appeal Judgment at [630]-[633].

2. [2]

   In the interest of efficiency, we will not repeat any of our analysis or conclusions in the Appeal Judgment. This judgment assumes knowledge of, and should be read together with, the Appeal Judgment.

3. [3]

   The only evidence relied upon on the costs issues was an affidavit of Louise Cantrill affirmed on 13 November 2024 relied upon by Berkley Insurance Company (“Berkley”) and which contained various correspondence, and a letter of 21 July 2020 to Ms Cantrill from Allens Linklaters, solicitors for CIMIC Group Limited (“CIMIC”), relied upon by CIMIC.

The ambit of the costs issues the subject of this judgment

1. [4]

   The orders of 18 September 2024 finally resolved any questions arising on appeal as to the costs of the proceedings at first instance. The only matter upon which agreement and, if necessary, further submissions were sought was as to the costs of the appeal proceedings albeit within the confines of [630]-[633] of the Appeal Judgment. Thus, the submissions of Berkley as to orders that should be made in respect of the costs at first instance fall beyond the ambit of our orders and for that reason must be rejected. Further, contrary to Berkley’s submission, within the parameters of our conclusions as set out at [630]-[633] of the Appeal Judgment, agreement and, if necessary, submissions were sought as regards questions as to the costs orders that should be made in the appeal proceedings, not merely whether any special costs orders should be made.

Should issues based costs orders be made?

1. [5]

   AIG Australia Limited (“AIG”), CIMIC, Chubb Insurance Australia Limited (“Chubb”), Catlin Syndicate Limited and Catlin Australia Pty Limited (together, “Catlin”) and Liberty Mutual Insurance Company (“Liberty”) all submitted that issues based costs orders should be made and that these should reflect the issues as set out in the Agreed List of Issues (as defined and set out in the Appeal Judgment at [16] and [25] and, for convenience, annexed to this judgment) and also the issue of procedural fairness raised by Berkley. In support of that approach, it was submitted that this reflects the way the hearing of the appeal proceedings was conducted and the Appeal Judgment was structured and avoids the undue complexity necessarily involved in making orders by reference to particular proceedings or notices of contention. CIMIC submitted that issues based costs orders would produce a “fairer result” in circumstances where parties chose to engage to varying extents on different issues such that events based costs orders would not adequately reflect this complexity.

2. [6]

   Both Zurich Australian Insurance Limited (“Zurich”) and Arch Underwriting at Lloyd’s Limited on behalf of Syndicate 2012 and Dual Australia Pty Ltd (“Arch/Dual”) submitted that their costs as a whole should be paid by CIMIC. Zurich submits that its involvement in the proceedings arose by reason of the declaratory relief sought by CIMIC against the 2010 Insurers (as defined in the Appeal Judgment at [1]). As the declaration made in Order 13 of the orders made by the primary judge on 12 October 2022, following judgment in CIMIC Group Limited v AIG Group Limited [2022] NSWSC 999 (the “2010 Declaration”), was set aside on appeal, Zurich says that they should be paid the whole of their costs on appeal notwithstanding that they also (unsuccessfully) sought relief on appeal relating to the liability of the 2011 Insurers (as defined in the Appeal Judgment at [1]). Arch/Dual contend that they were wholly successful on appeal and that an issues based costs order may result in them not recovering all of their costs. Berkley seeks orders (including special costs orders) that the whole of its costs be paid by CIMIC on the basis that both the 2010 Declaration and the primary judge’s order that Berkley pay equitable contribution to AIG were set aside on appeal and its appeal was thus wholly successful. Berkley says that in these circumstances no separate order for costs should be made for the procedural fairness issue unsuccessfully raised by Berkley on appeal. Swiss Re International SE (“Swiss Re”) is agnostic as to whether or not an issues based costs order is made, given that its costs go solely to the issue of equitable contribution as between the 2011 and 2010 Insurers, on which it was successful.

3. [7]

   As this Court explained in Ryde Developments Pty Ltd v The Property Investors Alliance Pty Ltd (No 2) [2018] NSWCA 40 (Beazley P, as her Excellency then was, Payne JA and Barrett AJA):

4. [8]

   Recently, in Michael Hill Jeweller (Australia) Pty Ltd v Gispac Pty Ltd (No 2) [2024] NSWCA 274 at [20] (Bell CJ, Payne JA, Basten AJA), this Court emphasised that the phrase “dominant or separable” should not be applied as if it were a statutory test and involves two concepts, each of which should be treated flexibly.

5. [9]

   We consider that in these appeal proceedings the fairer course is to make an issues based costs order, reflecting the Agreed List of Issues and the issue of procedural fairness, albeit, within this structure, taking a relatively broad brush approach to this exercise. First, such orders reflect our position as set out in the Appeal Judgment (at [630]-[633]), but also reflect the reality of the parties’ conflicting positions on a range of issues as reflected in the four notices of appeal, three notices of cross-appeal, eight notices of contention and lengthy written and oral submissions. It is too simplistic in this appeal merely to frame costs by reference to the overall success of both the 2010 and 2011 Insurers on appeal, as that does not reflect the extent to which grounds were advanced and submissions made, and costs therefore spent, on discrete issues raised and determined by the Court.

6. [10]

   Second, save as regards the issue of procedural fairness, the 16 issues in the Agreed List of Issues were agreed by the parties to encapsulate the issues arising in the appeal proceedings. Six of the parties also provided the Court with documents cross-referencing their written submissions to the issues in the Agreed List of Issues. Oral submissions were made by reference to those issues which were identified by reference to the various notices of appeal and cross-appeal and notices of contention. Our judgment was also structured by reference to the Agreed List of Issues. In these circumstances, the appeal proceedings were conducted on the basis that these issues all required separate resolution and we resolved these issues separately, save where it was unnecessary and inappropriate to resolve any issue having regard to other findings made.

7. [11]

   Third, whilst there will inevitably be some complexity in assigning costs to one or other of the issues in the Agreed List of Issues, the reality is that most of the parties have already undergone the task of identifying which grounds advanced were referable to which issue. Further, they have identified specific parts of their written submissions that were referable to specific issues and, as already mentioned, the oral submissions were structured by reference to these issues.

8. [12]

   Fourth, we do not accept that there is any unfairness in this approach. As we explain below, where there would otherwise be unfairness, we have made orders by reference to grouped issues on the Agreed List of Issues. This reflects our view that some issues are properly characterised as subsidiary to other issues. However, where a separable issue of significance and complexity was dealt with at some length in written or oral submissions, or where a separable contention of no real substance led to some costs, then we consider that there is no unfairness in costs being ordered against the party or parties who were unsuccessful on the issue. This is so even if the party or parties’ contentions on that issue were made in support of an outcome that it ultimately succeeded in achieving.

What costs orders should be made?

1. [13]

   Issue 1 raised issues as to the 2011 Insurers’ liability to CIMIC. It was raised by Zurich (one of the 2010 Insurers) in grounds 7 to 9 of its amended notice of appeal. It was addressed and responded to by the 2010 Insurers at some length in written submissions and was addressed orally. Issue 1 raised questions of construction of some complexity which did not go directly to the question whether the primary judge erred in making the 2010 Declaration. Zurich’s contentions on these issues were obviously in CIMIC’s interest, but CIMIC did not address Issue 1 in written or oral submissions. Notwithstanding that Zurich’s involvement in the appeal stemmed from CIMIC’s (ultimately unsuccessful) application for declaratory relief against the 2010 Insurers, the fair outcome is that Zurich should pay AIG, Chubb, Catlin and Liberty’s costs of Issue 1.

2. [14]

   Issue 2 was raised by Chubb in its notice of appeal. It was also raised by AIG and Liberty in their notices of contention in the Zurich Appeal (as defined in the Appeal Judgment at [14]). We rejected the contentions advanced by Chubb, AIG and Liberty on Issue 2. Given that AIG and Liberty’s contentions were essentially defensive and only Chubb sought to disturb the primary judge’s findings, and consistent with the Appeal Judgment (at [633]), Chubb should pay CIMIC and Zurich’s costs of Issue 2.

3. [15]

   Issues 4 and 5 were raised by Berkley in its amended notice of appeal and by CIMIC and Catlin by way of notices of contention in the Berkley Appeal (as described in the Appeal Judgment at [14]). These issues went to the construction of the 2010 Policies (as defined in the Appeal Judgment at [7]) and to factual findings, which in turn went to the correctness of the legal basis underlying the 2010 Declaration. Issue 3 was raised by CIMIC in its notice of cross-appeal in the Berkley Appeal. CIMIC contended that if Berkley succeeded in its contentions on Issues 4 and/or 5, then that would have consequences for Catlin’s liability to indemnify CIMIC. Given our conclusions as to Issues 12 to 15, that the 2010 Declaration should not have been made, we concluded at [425]-[427] in the Appeal Judgment that it was neither necessary nor appropriate for Issues 3, 4 or 5 to be determined.

4. [16]

   Having regard to these matters, CIMIC should pay Berkley’s costs of Issues 3, 4 and 5. These were issues of some substance, which were addressed in some detail in written and oral submissions. They went directly to the question whether the primary judge was correct to make the 2010 Declaration. Whilst ultimately the Court did not determine these issues, in circumstances where the primary judge had made the 2010 Declaration, and it was adverse to the interests of the 2010 Insurers, it was reasonable for Berkley to raise these issues. Whilst, as CIMIC contends, there is the possibility that in future proceedings CIMIC may succeed on these issues, that does not make it unfair or inappropriate for CIMIC to pay Berkley’s costs of these issues in the appeal proceedings.

5. [17]

   Catlin does not contend that any party should pay its costs of Issues 3, 4 and 5 and indicated in its written submissions on costs that it would consent to orders which provide that Catlin bears its own costs of Issues 3, 4 and 5. Our orders have this effect.

6. [18]

   Issues 6 and 7 were raised by CIMIC in its notice of cross-appeal in the Berkley Appeal. These went to the essence of the 2011 Insurers’ liability to indemnify CIMIC (beyond the limited extent found by the primary judge). CIMIC was wholly unsuccessful on these issues. As already determined in the Appeal Judgment (at [630]), CIMIC should pay the costs of AIG, Chubb, Catlin and Liberty on these issues. CIMIC makes no contention to the contrary.

7. [19]

   Issue 8 was raised by AIG, Catlin, Chubb and Liberty in their notices of contention relating to CIMIC’s notice of cross-appeal filed in the Berkley Appeal, seeking additional findings of breach of s 21 of the Insurance Contracts Act 1984 (Cth) and misrepresentation by CIMIC. Those findings were all resisted by CIMIC. Issue 8 involved factual matters of considerable complexity, and detailed submissions were made in writing and orally on this issue. AIG, Catlin, Chubb and Liberty were successful in part on Issue 8, and this Court would, if necessary, have made some but not all of the additional findings of breach or misrepresentation contended for. We did not, however, make one key finding contended for by AIG, Catlin, Chubb and Liberty, namely that CIMIC knew, reasonably believed or believed that the payments referred to in the Iraq File Note (defined in the Appeal Judgment at [3]) were unlawful (see Appeal Judgment at [338]). Having regard to the obvious significance of such a finding, the appropriate order is that CIMIC pay 50% of AIG, Catlin, Chubb and Liberty’s costs of Issue 8.

8. [20]

   Issue 9 was raised by Catlin in its notice of contention relating to CIMIC’s notice of cross-appeal filed in the Berkley Appeal, contending that the primary judge should have found that CIMIC could have notified additional matters (to some extent consequent upon the matters raised in Issue 8) under the 2010 Policies. CIMIC and Berkley both addressed Issue 9 in their written and oral submissions. We found (at [428] of the Appeal Judgment) that it was neither necessary nor appropriate to consider Issue 9, given our conclusion that the primary judge should not have made the 2010 Declaration.

9. [21]

   We consider that the fair outcome is that the parties should bear their own costs of Issue 9. It would not be fair for CIMIC to bear Berkley’s costs of Issue 9 when this issue was raised by Catlin not CIMIC. As between Catlin and Berkley, we can see no sound basis to order that one rather than the other should pay the costs of this unresolved issue. Berkley’s success in having the 2010 Declaration set aside does not, of itself, merit an award of costs against Catlin in respect of Issue 9.

10. [22]

    Issue 10 challenged the primary judge’s findings as to the applicable retention in the 2011 Policies and was raised by CIMIC in its notice of cross-appeal in the Berkley Appeal as against the 2011 Insurers (these terms are, respectively defined in the Appeal Judgment at [14] and [1]). We found (at [280] of the Appeal Judgment) that Issue 10 did not arise given our finding that the 2011 Insurers were entitled to reduce their liability to nil.

11. [23]

    Whilst Issue 10 raised separate contentions by CIMIC as against the 2011 Insurers, the fair outcome is that the costs of Issue 10 should be met by CIMIC. Issue 10 is properly characterised as a subsidiary issue, forming part of CIMIC’s overall challenge to the primary judge’s findings as to the extent to which the 2011 Insurers were liable to indemnify CIMIC. Moreover, relatively little attention was given to Issue 10 in either the written or oral submissions. In these circumstances, the fair outcome is that CIMIC meet the 2011 Insurers’ costs of Issue 10. CIMIC made no submissions to the contrary.

12. [24]

    Issue 11 was raised by Berkley in its amended notice of appeal and both Swiss Re and AIG in their notices of contention in the Zurich Appeal. We found that the primary judge erred in her Honour’s findings as to equitable contribution. Issue 11 was thus resolved in favour of Berkley and Swiss Re and against AIG. Consistent with our conclusion at [632] of the Appeal Judgment, AIG should pay Berkley’s costs of Issue 11. AIG accepts, and we agree, that it should also pay Swiss Re’s costs of Issue 11.

13. [25]

    Given that we set aside the 2010 Declaration, and as we found at [631] of the Appeal Judgment, CIMIC should pay the costs of Zurich, Berkley, Swiss RE and Arch/Dual in respect of Issues 12 to 15. Contrary to CIMIC’s contention, in the circumstances of this appeal there is nothing unfair about this outcome. Rather, there would be unfairness if any of the 2010 Insurers were themselves required to meet the costs of Issues 12 to 15. The parties were at arm’s length during the course of this litigation and, given the complexity of the issues, it was reasonable for them to maintain separate representation and make separate submissions on these issues notwithstanding that there was no apparent conflict of interest between them: Statham v Shephard (No 2) (1974) 23 FLR 244 at 246-247 (Woodward J), regularly applied in this Court, see eg Local Democracy Matters Incorporated v Infrastructure NSW (No 2) [2019] NSWCA 118 at [20]-[23] (Leeming JA, Sackville and Emmett AJJA). Moreover, Arch/Dual was the only one of the 2010 Insurers who had an interest in, and made contentions on, Issue 14.

14. [26]

    Issue 16, seeking in part to set aside the primary judge’s orders of 23 June 2023 as to costs, was raised by CIMIC in its cross-appeal in the Berkley Appeal and by Berkley’s amended notice of appeal. Given our findings that the 2010 Declaration and the primary judge’s findings as to equitable contribution should be set aside, we set aside orders 7 and 8 of the primary judge’s orders of 23 June 2023 (dealing with these two matters) and re-exercised the costs discretion: Appeal Judgment at [612]-[623].

15. [27]

    We thus did not determine Issue 16 insofar as it involved Berkley’s challenge to orders 7 and 8 of the primary judge’s orders of 23 June 2023. We did, however, reject (at [616]-[617] of the Appeal Judgment) CIMIC’s challenge to orders 2, 3 and 6 of the primary judge’s orders of 23 June 2023 in favour of AIG, Chubb and Catlin. Taking a relatively broad brush approach on the issue of costs, consistent with our conclusion at [631] of the Appeal Judgment that CIMIC should pay the costs of the 2010 Insurers’ successful challenge to the 2010 Declaration, it is fair for CIMIC to pay the costs of all parties on Issue 16 save that Berkley’s costs of Issue 16 should be paid by AIG to the extent that Berkley challenged order 8 made by the primary judge on 23 June 2023.

16. [28]

    Only Berkley raised the issue of procedural fairness, contending that there was material unfairness to it in the primary judge’s conduct of the proceedings at first instance. We rejected Berkley’s contentions on this issue for the reasons set out in the Appeal Judgment at [624]-[629]. This was a discrete issue, albeit that it was raised by Berkley in support of its overall contention that the 2010 Declaration made by the primary judge should be set aside, and that comparatively little attention was given to this issue in written and oral submissions. Moreover, given the matters set out in the Appeal Judgment at [624]-[629], there was no substance whatsoever in Berkley’s complaint. In the circumstances, the fair outcome is for Berkley to bear CIMIC, AIG, Chubb, Catlin and Liberty’s costs of the procedural fairness issue.

Should an indemnity costs order be made in favour of Berkley?

1. [29]

   As set out above, we have already made orders as to the costs at first instance. No application was made to set aside or vary those orders. Thus, the only issues which properly remain for determination are those relating to the costs of the appeal proceedings. In this regard, Berkley seeks orders that CIMIC pay its costs of the appeal against the 2010 Declaration, and that AIG pay its costs of the appeal against the primary judge’s orders as to equitable contribution, both on an indemnity basis. In support of this, Berkley relies upon Ms Cantrill’s affidavit (which we refer to at [3] above) annexing correspondence as to costs, including what Berkley describes as a Calderbank offer of 15 July 2020 made to CIMIC, earlier correspondence addressed to CIMIC identifying flaws in CIMIC’s contentions, what is described as a Calderbank offer of 10 September 2020 and an offer of compromise pursuant to Uniform Civil Procedure Rules 2005 (NSW), r 20.26 (“UCPR”), served on AIG, together with a second Calderbank offer, on 7 April 2022.

2. [30]

   On the issue of whether Berkley is entitled to an indemnity costs order against it, CIMIC relied upon the letter of 21 July 2020 sent by its solicitors to Ms Cantrill (which we refer to at [3] above).

3. [31]

   As is apparent, the correspondence and offer relied upon by Berkley pre-date the hearing before the primary judge, which commenced on 16 May 2022. As explained in Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [37]-[43] (“Regency Media”), on appeal, an offer of compromise made in the court below has cost consequences, in the sense that it is a relevant consideration in the exercise of the court’s discretion as to costs, but it is not an offer under the rules applicable in this Court. This is because, on appeal, “parties are in a different position from that which they were in prior to or at trial”, and the parties should assess their cases accordingly: Regency Media at [40]. Relevant factors will include whether it was reasonable to support the reasoning of the primary judge in support of findings in favour of the relevant party. As Bell P, Macfarlan and Leeming JJA said in Valmont Interiors Pty Ltd v Giorgio Armani Australia Pty Ltd (No 3) [2021] NSWCA 160 at [10], having regard to extensive caselaw in this Court, although the Court may have regard to the earlier offer made in the context of proceedings at first instance, “the costs of the appeal are usually determined by reference to the issues in, and the outcome of, the appeal”.

4. [32]

   Further, it was open to Berkley to file a notice of motion under UCPR, r 36.16 within 14 days of the orders made by this Court on 18 September 2024 seeking an order for indemnity costs in respect of the proceedings at first instance as regards AIG’s claim for equitable contribution against Berkley. They did not do so.

5. [33]

   In the appeal proceedings both CIMIC and AIG sought to uphold the findings of the primary judge against Berkley. Whilst they were unsuccessful, it was not unreasonable for them to have done so. No separate offer of compromise was made by Berkley to either CIMIC or AIG pursuant to UCPR, rr 51.47 and 51.48 in relation to the appeal proceedings. We see no reason in this case to depart from the usual position as set out above. Berkley’s applications for indemnity costs should be refused.

Costs of the issue of the costs of the appeal proceedings

1. [34]

   The parties’ written submissions on the issue of the costs of the appeal proceedings were brief and the issue was determined on the papers. Having regard to the disproportionate complexity that would be involved in any attempt to allocate these costs to any particular issue, or to determine “success” given the plethora of different questions involved, no order will be made as to the costs of the submissions on the costs of the appeal proceedings.

Orders

1. [35]

   The Court makes the following orders as to the costs of the appeal proceedings 2022/334409, 2022/335502, 2022/334264 and 2022/336236.

2. [36]

   In these Orders, the “Agreed List of Issues” means the list set out in the Appeal Judgment at [25], all references to an issue by number are to that issue on the Agreed List of Issues, and all references to costs are to the costs of the appeal proceedings.

   1. (1)

      CIMIC Group Limited (“CIMIC”) pay:

   2. (2)

      Zurich pay the costs of AIG, Chubb, Catlin, and Liberty of Issue 1.

   3. (3)

      Chubb pay the costs of CIMIC and Zurich of Issue 2.

   4. (4)

      AIG pay:

   5. (5)

      Berkley pay the costs of CIMIC, AIG, Chubb, Catlin and Liberty arising from the issue of procedural unfairness raised by Berkley in the appeal proceedings.

   6. (6)

      Each party otherwise bear its own costs, including of the issue of the costs of the appeal proceedings.

   7. (1)

      Do cll 7.1 and 5.3 of the 2011 Primary Policy preclude the 2011 Insurers from reducing their liability under s 28 of the Insurance Contracts Act?

   8. (2)

      Does cl 5.3(ii) of the 2011 Policy operate so that the 2010 Primary Policy’s limit of liability (as reduced by amounts previously paid) applies to CIMIC’s claims?

   9. (3)

      What is the proper construction of cl 3.2(i) of the 2011 Primary Policy?

   10. (4)

       What is the proper construction of cl 5.1 of the 2010 Primary Policy?

   11. (5)

       If cl 5.1 is to be construed as contended for by Berkley, on the primary judge’s findings could CIMIC have notified under cl 5.1 of the 2010 Primary Policy?

   12. (6)

       Did the primary judge err in finding that CIMIC breached its duty of disclosure under s 21 of the Insurance Contracts Act, and made a misrepresentation to the 2011 Insurers?

   13. (7)

       Did the primary judge err in finding that the 2011 Insurers were entitled to reduce their liability to nil under s 28(3) of the Insurance Contracts Act?

   14. (8)

       Did the primary judge err in failing to find that CIMIC breached its duty of disclosure under s 21 of the Insurance Contracts Act, and made a misrepresentation to the 2011 Insurers, for the additional reason that from the date of the Iraq File Note (23 November 2010), CIMIC knew and/or reasonably believed or believed, but did not disclose to the 2011 Insurers, the facts recorded in the Iraq File Note and that the payments referred to therein were or may be unlawful?

   15. (9)

       Did the primary judge err in failing to find that, in addition to finding that CIMIC could have notified of the Iraq File Note under cl 5.1 of the 2010 Primary Policy or s 40(3) of the Insurance Contracts Act, CIMIC could also have notified under cl 5.1 and/or s 40(3):

   16. (10)

       Did the primary judge err in identifying the retention applicable to CIMIC’s claim against the 2011 Insurers?

   17. (11)

       Did the primary judge err in concluding that, if necessary, AIG was entitled to equitable contribution of 50% from Berkley and Swiss Re?

   18. (12)

       Did the primary judge err in making the 2010 Declaration against the 2010 Insurers based on the pleadings against them?

   19. (13)

       Did the primary judge err in making the 2010 Declaration against the 2010 Insurers where that relief does not address any ultimate or decisive fact?

   20. (14)

       Did the primary judge err in making the 2010 Declaration against Arch and Dual based on her Honour’s findings and the failure to deal with the submission summarised at J[623]?

   21. (15)

       Did the primary judge err in making the 2010 Declaration against the 2010 Insurers on the grounds that the 2010 Declaration was hypothetical, lacked utility (including because CIMIC has never made a claim or notified any circumstances to the 2010 Insurers and it is too late for it to do so), was contingent upon the claim against the 2011 Insurers failing, was vague and failed to quell any justiciable controversy?

   22. (16)

       Did the primary judge err in exercising the costs discretion?