Case: Ruddock v Vadarlis (No 2) (2001) 115 FCR 229
Outcome: applied
The general principle is that costs ordinarily follow the event and that a successful litigant receives costs in the absence of special circumstances justifying some other order ( Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at [11] per Black CJ and French J). This reflects the principle that the award of costs to a successful party is principally by way of perceived restorative justice ( Ruddock at [12]). In Ruddock at [13], Black CJ and French J discussed the fact that novel legal issues and public interest litigation are cases where the usual rationale for the award of costs, that the successful party has been wronged at the hands of the losing party, does not necessarily apply. A losing party may, as their Honours point out, have had very good legal grounds for its position and conducted itself in the litigation in an entirely reasonable way and an order that costs follow the event may work unfairness. It may also, as their Honours observed, pose a significant barrier against parties of modest means even if the contemplated claim has substantial merit. 9 Chief Justice Black and French J said at [13] that criticisms concerning costs in public interest litigation did not justify a global modification of the usual rule that costs follow the event, but that the ability to exercise discretion is desirable. Further, as noted at [14], the compensatory principle ' was long subject to a limited public interest qualification at common law '. The further factor, that a party is deprived of costs because of its conduct of the proceedings, does not presently apply to Virgin, although Virgin submits that the applicants' conduct of the proceedings to date, in the amendment of pleadings and provision of particulars, is relevant. 10 The fact that the proceedings are brought otherwise than for the personal or financial gain of the applicant does not detract from the general proposition that ordinarily costs follow the event ( Ruddock at [18]). The fact that litigation can be characterised as being "in the public interest" does not, of itself, mean that the usual order is not made. However, the nature and purpose of the proceedings are still relevant in the exercise of the discretion to award costs and the exercise of the discretion takes account of all of the circumstances ( Ruddock at [18] [19]; [24]). There is no error in taking into account in a decision whether to award costs matters such as the absence of personal gain on the part of the applicants, the fact that a significant number of members of the public may be affected and that the basis of the challenge is arguable and raises "significant issues" as to the interpretation and application of statutory provisions ( Oshlack v Richmond River Council [1998] HCA 11 ; (1998) 193 CLR 72 at [20] per Gaudron and Gummow JJ, at [49] per McHugh J). The same circumstances are relevant to an order under Order 62A r 1 which, while making provision for the costs of a successful party, departs from the usual order that would otherwise be made. 45 The existence of a public interest in the determination of the issues in litigation is a factor of some significance in the awarding of costs. However, public interest and an arguable case are not necessarily decisive and not, of themselves, sufficient to prevent the usual costs order being made ( Ruddock at [18] [19]; Woodlands at 148; Physical Disability at [7]). The usual order for costs applies notwithstanding that the Act is beneficial legislation ( Fetherston at [9] per Heerey J). However, discretionary considerations may lead to a different result ( Fetherston at [12]).