Case: Cretazzo v Lombardi (1975) 13 SASR 4
Outcome: cited
The power of the Court to make orders for costs derives from s 43 of the Federal Court of Australia Act 1976 (Cth). As a general rule, the successful litigant in a proceeding is entitled to receive its costs ordinarily, costs follow the event. The power to order costs is discretionary, although it must be exercised judicially and not against the successful party except for some good reason connected with the case: Milne v Attorney-General for the State of Tasmania [1956] HCA 48 ; (1956) 95 CLR 460 at 477; Ruddock v Vadarlis (No 2) [2001] FCA 1865 ; (2001) 115 FCR 229 at 234; and Cretazzo v Lombardi (1975) 13 SASR 4 at 11 per Bray CJ. It is well established that the discretion conferred on the Court is very wide, and enables the Court to respond to the wide variety of circumstances that may arise in relation to the making of costs orders. 13 Justice Toohey said in Hughes v Western Australian Cricket Association (Inc) [1986] ATPR 40-748 at 48,136: The discretion [in respect of costs] must of course be exercised judicially. There are decisions, both of Australian and English courts, that throw light on the way in which the discretion is to be exercised. I shall not refer to those decisions in any detail; I shall simply set out in a summary way what I understand to be their effect. 1. Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order. Ritter v Godfrey [1920] 2 KB 47. 2. Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed. Forster v Farquhar [1893] 1 QB 564. 3. A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs of them. In this sense, "issue" does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law. Cretazzo v Lombardi (1975) 13 SASR 4 at 12. There is no difficulty in stating the principles; their application to the facts of a particular case is not always easy. Also it is necessary to keep in mind the caveat by Jacobs J in Cretazzo v Lombardi at 16. His Honour sounded what he described as "a note of cautious disapproval" of applications to apportion costs according to the success or failure of one party or the other on the various issues of fact or law which arise in the course of a trial. His Honour commented: "But trials occur daily in which the party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law. The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case. There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on his success in those particular issues". These observations were approved by Cooper J (with whom Sheppard and Neaves JJ agreed) in Cummings v Lewis (1993) 41 FCR 559 at 602-603.