Case: Cretazzo v Lombardi (1975) 13 SASR 4
Outcome: cited
It is well accepted that the general discretion conferred by s 43 is absolute and unfettered but that it must be exercised judicially and cannot be exercised on grounds unconnected with the litigation: see Cretazzo v Lombardi (1975) 13 SASR 4 at 11; Re Wilcox; Ex parte Venture Industries Pty Ltd (1996) 141 ALR 727 at 732. Nonetheless, it is equally well accepted that in the exercise of that discretion: (i) ordinarily costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order; (ii) where a litigant has succeeded only upon a portion of the claim, the circumstances may make it reasonable that the litigant bear the expense of litigating that portion upon which he or she has failed; and (iii) 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 parties' 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 law. Ruddock v Vadarlis [2001] FCA 1865 ; (2001) 115 FCR 229 at [11] approving Hughes v Western Australian Cricket Association (Inc) (1986) 69 ALR 660; ATPR 40-748 at 48,136. See generally Dal Pont, Laws of Costs , ch 8 (2003). 3 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."