Case: Instant Colour Pty Ltd v Canon Australia Pty Ltd [1996] FCA 1097
Outcome: cited
What can constitute "special circumstances" capable of disentitling a successful party from a costs award has been the subject of helpful consideration by Nicholson J in Instant Colour Pty Ltd v Canon Australia Pty Ltd [1996] FCA 1097. I am content for present purposes to reiterate what his Honour there said of the authorities on this matter: "(a) In Ritter v Godfrey [1920] 2 KB 47 at 60, Atkin LJ stated 'principles upon which a judge is to discern whether the necessary materials exist' for the exercise of discretion as to costs as follows: 'In the case of a wholly successful defendant, in my opinion the judge must give the defendant his costs unless there is evidence that the defendant (1) brought about the litigation; or (2) has done something connected with the institution or the conduct of the suit calculated to occasion unnecessary litigation and expense; or (3) had done some wrongful act in the course of the transaction of which the plaintiff complains.' Atkin LJ continued: '(2) I think, would include improper conduct in or connected with the litigation calculated to defeat or delay justice. Such conduct would also be included in (3) which, I think, further extends to cases where the facts complained of, though they do not give the plaintiff a cause of action, disclose a wrong to the public: King v Gillard [1905] 2 Ch 11, by which I understand some criminal or quasi criminal misconduct, eg a fraud or crime or preparation for a fraud or crime, or possibly some act of serious oppression. Such conduct must, however, be in the course of the transaction complained of.' (b) In Donald Campbell &amp; Co Ltd v Pollak [1927] AC 732 at 811-12, Viscount Cave LC adversely criticised the correctness of Atkin LJ's guiding principles but on the basis they were too restrictive: Verna Trading Pty Ltd v New India Assurance Co Ltd [1991] 1 VR 129 at 153 per Kaye J. As Viscount Cave LC formulated it, the discretion cannot be exercised against a successful party 'except for some reason connected with the case': Donald Campbell (supra). (c) In Australia it has been accepted the general discretion of a trial judge as to costs ought not be fettered by the rules formulated by Atkin LJ: Verna Trading (supra) at 154 and see: Cretazzo v Lombardi (1975) 13 SASR 4 at 11-12 per Bray CJ. (d) The principle as to the exercise of the discretion is the same in the case of plaintiffs and defendants, but it is clear that considerations sufficient to justify a refusal of costs to a plaintiff are not necessarily sufficient in the case of a defendant, for the former initiates the litigation while the latter is brought into it against his will: Ritter v Godfrey (supra) at 52-3 per Sterndale MR, approved in Donald Campbell (supra) at 811-12 per Viscount Cave LC. (e) More compelling circumstances are required for the exercise of discretion as a result of which a successful defendant is not only denied his costs but also compelled to pay the whole or part of the plaintiff's costs of the proceedings. This is so for the reason the proceedings are initiated by the plaintiff and the plaintiff fails to gain the relief which he sought: Verna Trading at 154. (f) In more recent English authority - Scherer v Counting Instruments Ltd [1986] 1 WLR 615 at 621 - Buckley LJ, in summarising the principles governing the making of cost orders, included the principle that: 'the grounds must be connected with the case. This may extend to any matter relating to the litigation and the parties conduct in it, and also to the circumstances leading to the litigation, but no further.' (g) In Jamal v Secretary, Department of Health (1988) 14 NSWLR 252 at 271-2, Mahoney JA recognised that in respect of costs on an appeal, conduct in relation to the matter under appeal may be discreditable to an extent warranting deprivation of costs: see Jones v Merionethshire Permanent Benefit Building Society [1892] 1 Ch 173 at 187-8 and Borthwick v Evening Post (1888) 37 ChD 449 at 465." 15 I do not consider it profitable or appropriate to attempt to apportion costs by reference to the applicants' success or lack of success on the misrepresentation and non-disclosure issues the more so as those issues were not separable in any event from the issues of reliance and causation: cf Instant Colour Pty Ltd , at 18. 16 As I have earlier indicated, there are parts of the applicants' claims for the costs of which Sladojevic is entitled to be paid. For example, the fiduciary claim, as I foreshadowed at the very beginning of the trial was quite misconceived. Its failure was inevitable. This said, I am satisfied that because of his conduct in connection with the litigation or with what reasonably was litigated by the applicants in the circumstances (e.g. the Georgiadis letter), I am satisfied he should incur a significant abatement of the costs to which he would otherwise be entitled as a successful defendant in respect of the claims based on misrepresentation and those relating to non-disclosure which were abandoned. Sladojevic's conduct permeated this part of the Rawley litigation.