Appellant v First Respondent

2 The Commission and the second respondent, Mr Butler, sought costs against Mr Mulholland. Their applications were resisted and, by consent, the issues were addressed in written submissions.

3 Mr Mulholland submits that there should be no orders as to costs against him or, alternatively, that any such orders should be stayed until the determination of any appeal. He makes a number of arguments in support of this submission, which I will address in turn.

Section 109 of the Victorian Civil and Administrative Tribunal Act 1998

4 Mr Mulholland first submits that the Court should follow the practice at VCAT where, in accordance with s 109 of the Victorian Civil and Administrative Tribunal Act 1998 ('the VCAT Act'), parties generally bear their own costs. He submits that this should be done because the proceeding was an appeal from a determination of the Tribunal.

5 I agree with the Commission's response that there is no reason for s 109 to apply to an appeal brought under s 148 of the VCAT Act. There is no reason for the VCAT practice to be followed.

6 Section 24 of the Supreme Court Act 1986 applies. It provides that costs shall be awarded in the exercise of the Court's discretion. That discretion is to be exercised judicially by reference to factors pertinent to the litigation.[1] The usual rule is that costs follow the event and will be awarded in favour of the successful party.[2]

7 Mr Mulholland argues that the Commission should not have the benefit of a costs order because it was carrying out its statutory function in defending the appeal. He refers to the Commission having adopted the practice endorsed by the High Court in R v Australian Broadcasting Tribunal; ex parte Hardiman[3] at the Tribunal and a 'neutral' position in the Court.

8 As the Commission points out, the proceeding in this Court was an appeal from the Tribunal's decision under s 148 of the VCAT Act, rather than from the determination of the Commission (which had been reviewed by the Tribunal). The Commission did not adopt the practice endorsed in Hardiman.

9 I agree with the Commission that its participation in the proceeding was necessary to assist the Court and to defend its actions in making the primary decisions under challenge. This was particularly so when Mr Mulholland sought to argue matters not covered by the grounds upon which he had been given leave to appeal.

10 There is no substance to Mr Mulholland's argument that no costs should be awarded to the Commission because it was 'performing a public service within its normal statutory functions as a Government agency'. As the Commission submits, such an argument could be mounted in most, if not all, proceedings for judicial review of administrative decisions.

11 Mr Mulholland then cites the High Court's decision in Oshlack v Richmond River Council[4] in support of his argument that no order for costs should be made because this was a case in which there were sufficient special circumstances to justify a departure from the 'ordinary rule'.

12 He relies upon judicial recognition of the public interest in ensuring that a political party is administered in accordance with a correct construction of its rules, citing Coleman v Liberal Party of Australia, New South Wales Division (No 2).[5] He contends that he instituted the litigation against the Commission and Mr Butler to obtain a determination as to the proper construction of the rules of the Democratic Labor Party and that he was not motivated by personal gain. He maintains that the proceedings were not frivolous or vexatious and involved what he asserts was an important question of law of interest to a significant section of the public (not limited to members of the DLP). He argues that, in light of his personal financial position, the merits of the litigation, his motivation for instigating it and its 'shared public interest aspect', it would be appropriate that there be no orders for costs.

13 Something more than the categorisation of proceedings as 'public interest litigation' is needed before a successful defendant should be denied costs.[6]

14 The circumstances of this case are quite different from those in Oshlack where the judge found 'sufficient special circumstances' justifying a departure from the ordinary rule. There, the proceeding was supported by a significant group of members of the public, it was motivated by the plaintiff's desire to preserve the habitat of an endangered koala and to uphold environmental law and it resolved 'significant issues' as to the interpretation and administration of certain statutory provisions.[7]

15 Whilst I recognise that every case will turn on its own facts, I agree with the Commission that this proceeding does not involve a 'public interest' aspect warranting a departure from the usual situation in the exercise of my discretion. I note that I have taken it into account that the construction of r 4 of the DLP Rules will be of interest to some people and, in particular, those involved in the ongoing struggle for positions in the party between Mr Mulholland and his supporters and Mr Butler and his camp.

16 Mr Mulholland mentions his personal financial situation but he gives no additional detail. The Commission refers to Knight v Secretary to the Department of Justice[8] where Kellam J stated that even the unsuccessful party's inability to meet a costs order would not alone constitute 'a sufficiently special circumstance or sufficiently good reason to justify departure from the normal rule' as to costs.[9]

17 Mr Mulholland does not rely upon his asserted impecuniosity alone, but, even so, he does not persuade me to exercise my discretion so as to make no order against him in all the circumstances to which he adverts.

18 Mr Mulholland also argues that the costs of this proceeding should be determined in an ongoing related proceeding in the Court (No SCI 2008/009511) between him and Mr Butler. He generally argues that there is 'an overlap of issues' and the likelihood of 'either the same costs or a duplication of costs'. I agree with the Commission that, in the circumstances of this case, the existence of another proceeding between Mr Mulholland and Mr Butler has no relevance to the exercise of the costs discretion in this proceeding, particularly in relation to the Commission's costs.

19 Mr Mulholland then maintains that he has identified a number of grounds for a further appeal 'with reasonable prospect of success'. He submits that, if the costs are not determined in the related proceeding, they should be determined in the future appeal. I also agree with the Commission that any such foreshadowed appeal can have no bearing on the award of costs.

20 Mr Mulholland additionally submits that, in any event, no order for costs should be made in favour of Mr Butler.

21 I am not persuaded by Mr Mulholland's submission that Mr Butler is not entitled to costs because, in Mr Mulholland's view, he was not a necessary party at any stage. Nor am I persuaded that the unrepresented Mr Butler should be denied any legal costs he can substantiate on the basis of Mr Mulholland's assertion that Mr Butler's affidavit material was 'vexatious, defamatory and untrue' and unrelated to the issue of the correctness of the Commission's decision. Mr Butler was a successful respondent to the proceedings at VCAT and was a respondent in the appeal and is entitled to an order for costs in the exercise of the Court's discretion.

Alternative application for a stay of costs order

22 Mr Mulholland then argues that any costs order should be stayed until such time as his further appeal is determined. He makes no further submissions in support of this application.

23 I am not persuaded that Mr Mulholland has made out a case for a stay of execution, pending his appeal or otherwise, in his submissions resisting the costs application. He can apply for such a stay in the context of his appeal under r 64.25 of the Supreme Court (General Civil Procedure) Rules 2005, if he so desires.

24 Costs should follow the event in this case and Mr Mulholland should be ordered to pay the costs of the respondents who successfully resisted his appeal. The application for a stay should be rejected.

[1] Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534, 557 (Dawson J).

[2] Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72, 97 [67] (McHugh J).

[3] [1980] HCA 13; (1980) 144 CLR 13.

[4] [1998] HCA 11; (1998) 193 CLR 72.

[5] [2007] NSWSC 736; (2007) 212 FLR 271, 281 (Palmer J).

[6] Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72, 89 [49] (Gaudron and Gummow JJ).

[7] See Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72, 80-1 [20] (Gaudron and Gummow JJ).

[8] [2004] VSC 29.

[9] Knight v Secretary to the Department of Justice [2004] VSC 29, [5].