Costs of the appeal
11 The disposition of costs is in the Court's discretion; and of course that discretion must be exercised judicially, having regard to the applicable principles and the justice of the case in all the circumstances: s 43 of the Federal Court of Australia Act 1976 (Cth) ('the Act'), discussed in Ruddock v Vadarlis (No 2) at [9]-[10]. As Black CJ and French J said in that case at [11]:
Within the general discretion of the courts to award costs it is accepted by decisions in both Australian and English jurisdictions that:
• Ordinarily costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order.
• 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.
• 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.
In support of these propositions their Honours referred to Hughes v Western Australian Cricket at 48,136.
12 As indicated above, where an appeal is successful, ordinarily a respondent will be ordered to pay the costs of the appeal and of the first instance proceeding but this is not an invariable rule. The discretion, which is conferred on the Court by s 43 of the Act, "enables it to respond to the wide variety of circumstances that may arise in relation to the making of costs orders": Ruddock v Vadarlis (No 2) at [16].
13 The issue in the appeal was whether, as the appellant Commissioner argued on the appeal, the first respondent held an equitable interest in residential property purchased in the name of the second respondent. The first ground of the Commissioner's case was that the primary judge was wrong to find to the contrary by reason of what the appellant called the Cummins inference. The Court rejected this ground: Reasons at [10]-[11]. The appellant Commissioner's second ground was that, apart from any Cummins inference, the Court should infer from the evidence that the first respondent intended to retain a 50% beneficial interest in the property. The Court accepted that this was indeed what the first and second respondents had intended: Reasons at [27].
14 The outcome of the appeal indicates that the appellant Commissioner is entitled to his costs of the appeal and the costs of the proceeding at first instance.
15 There may be some force in the second respondent's submission that what the Court identified as an error in the primary judge's reasons could have been more clearly identified by the appellant as such. We do not consider, however, that there was so little clarity in the appellant's argument that the appellant should be deprived of the costs of the appeal. As the second respondent properly noted, the Commissioner's submissions on the appeal included a contention that the presumption of advancement was rebutted by evidence as to the actual intention of the first respondent, including that "the contribution of the first respondent to the purchase of the matrimonial home … was secured by mortgage against the matrimonial home itself … [which] could be lost if there was a mortgagee sale of the matrimonial home": see appellant's outline of submissions at [44]. Further, in answer to the Court's questions at the hearing of the appeal, senior counsel for the Commissioner submitted that "the fact that Mr Bosanac assumed a substantial liability without getting any benefit would further support an inference that he intended to [obtain a] beneficial [interest]"; and further submitted that the primary judge had erred, in consequence, by failing "to take that into consideration": see transcript at p 7; also pp 18-19. The point was, furthermore, clearly raised with counsel for the second respondent, who did not express any surprise when the point was raised. Nor did counsel for the second respondent indicate that he had any difficulty in addressing point: transcript pp 33, 34. We conclude that there was not such a failure on the appellant's part "to properly articulate an argument before the Court" as to justify a departure from the ordinary rule that, as the successful party, the appellant is entitled to the costs of the appeal. In so far as the second respondent suggested that the appellant had not raised the ground "at all", this submission must also be rejected: see second respondent's submissions on costs at [2], [4].
16 Of course, a successful appellant who has failed on some issues may be deprived of the costs of the issues on which the party failed or ordered to pay the costs of them to the other party. The determination of costs on an issue by issue basis is ordinarily not desirable, however; and the fact that a court does not accept all of a successful party's submissions does not necessarily make it appropriate to deal with costs on an issue by issue basis: see Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) [2015] HCA 53; 90 ALJR 270; 327 ALR 192 at [6] and Commissioner of Taxation v AusNet Transmission Group Pty Ltd (No 2) [2015] FCAFC 124 at [23]. We do not consider that the justice of the case warrants the determination of costs on an issue by issue basis in this case. As already noted, the Commissioner succeeded on a ground identified in his Notice of Appeal and argued in the proceeding below. The point at issue was specifically addressed at the hearing of the appeal, without objection or complaint. Further, in our view, while the failure by the primary judge to include in his consideration the fact that the first respondent had "assumed a substantial liability without acquiring any beneficial interest" was critical in the Court's reasons, it was not the sole basis on which the Court departed from the primary judge's determination of the issue: see, e.g. Reasons at [24]-[26].