Case: Cummings v Lewis (1993) 41 FCR 559
Outcome: cited
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. 17 Although, I note that Cooper J, in referring to the above passage of Wilcox J, in the decision of Cummings 41 FCR at 603 said: Wilcox J was of the view that to persist in a denial that the statements as found were made was unreasonable and was conduct which unreasonably prolonged the proceedings. It is no answer to say that a party is entitled to test the evidence to show that nothing was said which might amount to the representations as pleaded. A party always has that right in litigation. However, the question which is relevant to the issue as to costs is whether or not the exercise of that right, or the manner in which it was exercised, was reasonable in all the circumstances; and, whether the exercise of the right had the effect of unreasonably prolonging the proceedings. It was this issue which Wilcox J found against the respondents and upon which he based his decision. 18 There must be some element connected to the proceeding to make it fair and reasonable to deprive a successful litigant of its costs. A good reason not to follow the ordinary rule may arise because of the unreasonable or inappropriate conduct of the successful litigant. It may also arise where there is an ability to identify separate issues or inquiries where the successful litigant has failed. 19 There may be other circumstances in which there needs to be some qualification to the starting point of presuming that the successful party is entitled to its costs where justice requires it. Any determination will always depend on the circumstances arising for the decision of the judge who has conducted the trial and who is considering the appropriate order as to costs. 21 The fact that a successful party has lost on a particular issue or inquiry does not necessarily mean that the party has acted in the litigation inappropriately or unreasonably. Nevertheless, in certain circumstances, it may be an appropriate exercise of the court's discretion to apportion costs according to success or failure on a particular distinct or severable issue or inquiry irrespective of any inappropriate or unreasonable behaviour on the part of the successful party: see Cummings 41 FCR at 599-604; Hughes [1986] ATPR at 48,136.