The success of a party in a case, as well as their procedural conduct, are factors that the court takes into account in awarding costs.

The law grants the court discretionary power to award costs, which is exercised judicially. The general rule is that costs are awarded in favour of the successful party and against the unsuccessful party and this also applies to interlocutory applications.

When deciding whether or not to issue an order for costs, the court takes into account all the circumstances, including the procedural conduct of the parties. In order to deviate from the rule that costs follow the result, there must be sufficient reasons related to which party has unduly contributed to the costs or part of them and not related to the outcome of the proceedings.

The matter is regulated by law by article 43 of the Courts Law, Law 14/1960, which determines that the costs of any civil procedure are under the discretionary power of the court, which has full authority to decide by which party and to what extent they will be paid.

In addition to the legislative provision, the new Civil Procedure Rules of 2023, in Part 39, provide that the unsuccessful party shall pay the costs of the successful party and that such an order shall also be issued on any application during the course of the judicial proceedings.

The court, when deciding whether to make an order for costs and what it will make, shall take into account all the circumstances, including the conduct of the parties, which is set out in Part 39.2 as including: (a) conduct before as well as during the proceedings and in particular the extent to which the parties complied with any relevant pre-trial protocol, (b) whether it was reasonable for a party to raise, advance or dispute a particular claim or issue, (c) the manner in which a party has advanced or defended its case or a particular claim or issue, and (d) whether a claimant who has succeeded in his claim in whole or in part has exaggerated their claim.

Judgement of Court of Appeal

The judgement issued by the Court of Appeal in C.A.386/19, dated March 18, had as its subject an appeal against the decision of the court of first instance in favour of the plaintiff and against the defendant for a specific amount, while awarding the costs of the proceedings against the plaintiff and in favour of the defendant.

The plaintiff in her appeal alleged that the Court of First Instance had wrongly decided that despite the success of her claim, costs should be awarded against her on the grounds that the amount for which the judgment was issued had been offered to her from the outset and she had not accepted it.

She also argued that the decision on costs was the result of an error by the court which deviated from the general case law rule that costs follow the result.

The Court of Appeal in its decision proceeded to analyse the case law and a referred to the legislation, judging as sufficient the justification of the court of first instance for the contested order. While the amount for which the decision was issued was sent by check from the respondent before the filing of the lawsuit, she nevertheless did not accept it, claiming damages, declarations and orders that were rejected by the court of first instance.

The question posed by the Court of Appeal was whether the court of first instance correctly exercised its discretion regarding the issue of costs. It concluded, as is apparent from the case law, that the procedural conduct of the parties may deprive them of part or all of the costs. A deviation from the rule is justified if there are sufficient reasons relating to the cause of the costs of the proceedings.

The outcome of the action did not vindicate the appellant in relation to her claims, on the contrary, it vindicated the respondent. The cause of the costs of the proceedings was due to the appellant’s side, which did not prove its case against the respondent to the required extent and its claims were rejected. Therefore, the court of first instance correctly exercised its discretion on the issue of costs and dismissed the appeal.

George Coucounis is a lawyer specialising in Immovable Property Law, based in Larnaca. E-mail: [email protected], tel: 24818288