Investec Bank (Australia) Limited v Glodale Pty Ltd & Ors

2 This hearing of the appeal involved a multiplicity of issues emerging from the notices of appeal and cross-appeal and the notice of contention. None of the parties achieved total victory. Each party was partially successful. After delivery of reasons, the Court heard submissions concerning the allocation of the costs of the appeal. Counsel for the appellant submitted that each party's costs should lie where they fall. The respondents argued that the general rule of costs following the event should apply.

3 Rule 64.24(1) of the Supreme Court (General Civil Procedure) Rules 2005 gives the Court of Appeal a discretion to make 'such order for the whole or any part of the costs of an appeal as it thinks fit'.[1]

4 The position as to costs where a party has been partially successful was summarised by Eames J in Pricom Pty Ltd v Sgarioto:[2]

As a general rule costs should follow the event, and a successful party should obtain all of the costs of the action even although it failed to establish some of the alternative heads of its claim: Ritter v Godfrey (1920) 2 KB 47. However, in the exercise of its discretion the court may decline to order costs in favour of a successful party, or may order the successful party to pay the costs of the unsuccessful party, where the plaintiff failed to establish discrete heads of claim, or failed to establish issues which it pursued in its claim, although ultimately succeeding on the basis of another discrete head of claim: Hughes v Western Australian Cricket Association Inc [1986] FCA 382; (1986) ATPR 40-748, per Toohey J at 48,136.

5 In McFadzean v Construction Forestry Mining and Energy Union,[3] this Court said:

No complaint is made by the appellants about the judge's method of making a single order in apportioning the costs. It was certainly open to his Honour to do so. Under r 63.04, the judge might have awarded costs in relation to particular questions or parts of the proceeding. We think it appropriate however, with respect, to observe that the approach taken by his Honour, of fixing of a certain proportion of a party's costs which should be paid by another party, has much to commend it.

In fixing costs a superior court may treat 'heads of controversy as units of litigation' and give directions to the taxing master in relation to them, such units not being circumscribed by pleadings, causes of action or issues capable in themselves of leading to the granting of relief. But to avoid the complications of taxation resulting from making orders recognising the entitlements to costs of a party on each action on which they were successful, the orders may be notionally set off against each other or other adjustments made so as to produce an order for a proportion of one party's costs. This approach to costs orders where an action has had mixed success has been followed in a number of cases. In Hughes v Western Australian Cricket Association (Inc), Toohey J had regard to the fact that the plaintiff had succeeded on some issues but failed on others, but concluded that: 'it would be unsatisfactory to attempt to apportion issues and leave the fixing of costs of those issues to the taxing officer. That would impose a very great burden on him and upon the parties' legal representatives.' In our view, the judge's approach to the apportionment of costs was particularly apposite in this case, having regard to the multiplicity of parties, actions, and issues, and the mixed success enjoyed by the plaintiffs. (Footnotes omitted.)

6 On the hearing of the appeal and cross-appeal, the respondents were successful in defending the findings of the trial judge as to breach of duty and in defending his Honour's finding as to the quantum of damages. They were also successful in establishing that the trial judge's findings in relation to the counterclaim should be set aside. On the other hand, they were unsuccessful in their attack upon the trial judge's finding as to the quantum of their loss and also as to the nature of the remedy determined by the trial judge. A considerable part of their submissions (both oral and written) was devoted to those issues upon which they were unsuccessful.

7 As this Court said in Major Engineering Pty Ltd v Helios Electroheat Pty Ltd (No 2):[4]

... Where there is a mixed outcome in the proceeding, such as here, the apportionment of the comparative importance of the relevant claims in the proceeding - here, the claim and the counterclaim - can only be carried out on a broad basis, it being primarily a matter of impression and evaluation, rather than arithmetic precision.

8 This is a case where there has been a mixed outcome - none of the parties has achieved total success and a sizeable part of the appeal has been devoted to issues upon which the respondents have failed. In those circumstances, it is not appropriate to apply the general rule. Rather, the respondents should have a percentage of their costs. Further, to make separate orders relating to costs on the appeal and the cross-appeal would simply add further expense and make the taxing of the bill of costs all the more difficult.

9 Taking into account the degree of success each party has enjoyed and the time devoted to each issue and its importance, we think it appropriate that the respondents have an order for 70 per cent of their costs of the appeal and that there be no order in relation to costs incurred on the cross-appeal.

[1] See also s 24 of the Supreme Court Act 1986.

[2] Unreported, Supreme Court of Victoria, Eames J, 10 April 1995, 24 April 1995, BC9503266, 5, cited with approval in Spotless Group Ltd v Premier Building & Consulting Pty Ltd [2008] VSCA 115, [13] and in McFadzean v Construction Mining and Energy Union [2007] VSCA 289, [152].

[3] [2007] VSCA 289 [157]-[158].

[4] [2006] VSCA 114 [5].