• Lawyers in Sydney
• Lawyers in Melbourne
• Lawyers in Brisbane
• Lawyers in Perth
• Family lawyers
• Employment lawyers
• Criminal lawyers
• Wills and estates lawyers
• Find a lawyer

Parties: Clarkson Williams Partners Pty Limited (Appellant) Sonja Vaughan (Respondent) Representation: Counsel Mr G Ng with Mr Y Lusk (Appellant) Mr RL Crowe with Mr R Arthur (Respondent)

Solicitors Yeldham Price O’Brien Lusk Solicitors (Appellant) Donohue & Co Solicitors (Respondent)

File Number: ACTCA 13 of 2015

THE COURT:

1. The appellant succeeded in its appeal to the Court of Appeal against a judgment of a single judge: see Clarkson Williams Partners Pty Ltd v Vaughan [2016] ACTCA 1. The parties have now provided written submissions as to the costs of the appeal.

2. The appellant submits that there is no basis for departing from the general rule that costs follow the event, and that the respondent should pay its costs. The respondent submits that there should be no order as to costs because the appellant failed on most of its grounds of appeal, and the failed grounds added significantly to the costs of the appeal.

3. The grounds of appeal were summarised in our judgment on the appeal as raising six issues. The first five grounds asserted that the primary judge had erred in finding that the appellant had engaged in misleading or deceptive conduct.

4. The last ground contended that his Honour’s assessment of damages was erroneous. The respondent cross-appealed on the basis of different error in the assessment of damages. Each party conceded the other’s ground concerning assessment of damages. Those grounds can be regarded as a neutral factor in considering the question of costs.

5. The appellant succeeded in only one of its five grounds of appeal concerning the primary judge’s findings of misleading or deceptive conduct. This was, of course, enough to require that the appeal be allowed.

6. In view of the appellant’s ultimate success, although on only one of five grounds, the question is whether the respondent should be required to pay the appellant’s costs of the appeal, or whether some other order should be made.

7. Rule 1721(1) of the Court Procedures Rules 2006 (ACT) (“the Rules”) provides, “The costs of a proceeding or of an application in a proceeding are in the discretion of the court”.

8. As Refshauge J noted in Lewis v Chief Executive, Department of Justice and Community Safety (ACT) and Ors (No 2) [2014] ACTSC 196 (Lewis) at [13], the discretion must be exercised judicially, and the result should be fair, having regard to the particular facts and circumstances of the proceeding: see also Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at 234 [9], per Black CJ and French J.

9. Ordinarily, costs follow the event: Oshlack v Richmond River Council (1998) 193 CLR 72 at [67] (McHugh J) and [120]-[122] (Kirby J). However, the Rules themselves recognise that the circumstances of the case may make it appropriate to depart from the usual rule. Rule 1705(1) provides, “The court may make an order for costs in relation to a particular issue in, or a particular part of, a proceeding”.

10. In Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38], the NSW Court of Appeal summarised the principles governing the making of orders for costs where the successful party has not succeeded on all issues:

• Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed. • In relation to trials it has been said that it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument. A similar approach is adopted on appeal. • If the appellant loses on a separate issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue. • Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed. • A separable issue can relate to “any disputed question of fact or law” before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter. • Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation. (Citations omitted.)

11. The appellant relies upon the opinion of Refshauge J in Lewis at [26] that:

Even where the issues are separable, it would seem to me that, unless they played either a dominant part in the proceedings or have extended the hearing or the preparation for it appreciably, it would not usually be in the public interest to make separate costs provisions for such issues.

12. This view provides an appropriate starting point. However, it must be remembered that the Court has a broad discretion, and the discretion must be exercised having regard to the particular circumstances of the particular case. Ultimately, the Court is required to determine the appropriate order in the interests of justice.

13. There is ample authority supporting the respondent’s submission that a party may be deprived of an order for costs where the party succeeds on some issues but not others.

14. In Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 3) [2007] FCAFC 119, a Full Court of the Federal Court said at [11]:

The usual practice is that costs follow the event and the Court will order the recovery of costs by the successful party on a party-party basis but success or failure on separate issues may lead the court to engage in a process of apportionment…It is appropriate that, where one party, although successful overall, raised and pursued unsuccessful grounds or abandoned grounds that the other party was expected to meet in preparation of and in the course of the hearing, and as a consequence costs have been thrown away or incurred, such costs should be paid by the successful party. (Citations omitted.)

15. In Hughes v Western Australian Cricket Association Inc [1986] ATPR 40-748, Toohey J stated the principles as follows at 48,136:

16. Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order. 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. 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. (Citations omitted.) See also Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107, Roadshow Films Pty Ltd v iiNet Ltd (No 4) (2010) 269 ALR 606 at 610–613; [2010] FCA 645, per Cowdroy J; Dias Aluminium Products Pty Ltd v Ullrich Aluminium Pty Ltd (No 2) (2005) 225 ALR 569 at 570; [2005] FCA 1400, per Crennan J, Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane Industries Pty Ltd (1993) 26 IPR 261, Victoria v Sportsbet Pty Ltd (No 2) [2012] FCAFC 174 at [8], Chen v Chan [2009] VSCA 2 at [10], Correa v Whittingham (No 2) [2013] NSWCA 471 at [27].

17. In this case, the appellant raised and argued five grounds which asserted that the primary judge erred in finding that the appellant had engaged in misleading or deceptive conduct. Each of those grounds raised substantial and discrete issues. The four grounds on which appellant failed, taken together, played a dominant part in the written submissions and oral argument. The part played by those grounds in adding to the costs of the appeal is significant enough to displace the usual rule that costs follow the event.

18. The fair outcome is that there should be no order as to the costs of the appeal.

I certify that the preceding seventeen [17] numbered paragraphs are a true copy of the Reasons for Judgment of the Court.

Associate: David Hoitink

Date: 1 April 2016