Knight v FP Special Assets Ltd

The Supreme Court shall have power to award costs in all cases lawfully brought before it and not provided for otherwise than by this section.

Subject to the provisions of the Judicature Act and these Rules, the costs of and incident to all proceedings in the Court, including the administration of estates and trusts, shall be in the discretion of the Court or Judge: Provided that nothing herein contained shall deprive an executor, administrator, trustee, or mortgagee who has not unreasonably instituted or carried on or resisted any proceedings of any right to costs out of a particular estate or fund to which he would be entitled according to the Rules heretofore acted upon in Courts of Equity: Provided also, that, subject to the next following Rule, when any cause, matter, or issue is tried with a jury, the costs shall follow the event, unless the Judge by whom such cause, matter, or issue is tried, or the Court, shall for good cause otherwise order.

Historically, there were marked differences between the powers of the courts at common law and in equity to award costs [1] . The courts at common law had no inherent jurisdiction to award costs. In Garnett v. Bradley, Lord Blackburn summarized the position of the common law courts in this way [2] :

Costs in Courts of Common Law were not by Common Law at all, they were entirely and absolutely creatures of statute. There had been statutes passed at different times giving costs, some in one case and some in another, the earliest being the Statute of Gloucester, passed many centuries ago, which gave costs, if I recollect rightly, to demandants who recovered damages in a real action, which they had not had before. Subsequent statutes were passed at different times giving a Plaintiff a right to recover costs in any action, and there were other statutes passed at different times upon the subject of costs in the Common Law Courts. I think the first that gave costs to the Defendant was as late as James I., and there were several other statutes giving costs, but all those statutes went upon one principle throughout. The result was, that, as a general rule, in every case in Courts of Common Law the party who succeeded got his costs, whether he was Plaintiff or Defendant, whether he succeeded by a verdict or upon demurrer. I say the general rule established by all those numerous statutes (for there was no one statute which laid it down) was that the successful party got his ordinary taxed costs; in other words, that the costs followed the event, and that the party who was successful had them as a matter of right.

From that general rule, however, certain statutes made several exceptions in particular cases.

1. Garnett v. Bradley (1878), 3 App. Cas. 944, at pp. 953-954, 962. 2. ibid., at p. 962.

On the other hand, in equity the giving of costs was entirely discretionary [3] . The Court of Chancery exercised a wide discretion not only as to the circumstances under which costs were awarded but also as to the measure and extent of the costs [4] .

1. Jones v. Coxeter (1742), 2 Atk. 400 [26 E.R. 642]. 2. Andrews v. Barnes (1888), 39 Ch. D. 133, at p. 138.

Section 58 of the Supreme Court Act and the Costs Act came into operation on the same day, 31 December 1867. The Costs Act, "[a]n Act to Consolidate and Amend the Laws relating to Costs at Common Law", consolidated and amended earlier statutory provisions dealing with the award of costs at common law. The Act set out what order for costs was to be made in particular cases. For the most part, the provisions were expressed in mandatory terms. Thus, s. 5 provided that "[i]n all cases where the plaintiff is to recover damages he shall recover costs." Like other sections, it did not confer a discretionary power to order costs.

Read in conjunction with the Costs Act, s. 58 was plainly intended to confer upon the Supreme Court a discretionary power to award costs in all cases not otherwise provided for. At first glance, it might seem that this power was to extend not only to common law cases not governed by the provisions of the Costs Act but also to equity. However, s. 22 of the Supreme Court Act vested in the Supreme Court the equitable jurisdiction possessed by the Lord High Chancellor or other equity judges in England. As that equitable jurisdiction included a general discretionary jurisdiction to order costs, it would seem that there was no scope for the operation of s. 58 in equity, equity cases being otherwise provided for in the relevant respect.

It is important to note that the area of operation of s. 58 necessarily depended upon the scope, as it existed from time to time, of other legislative provisions dealing with the award of costs. Thus, the introduction of subsequent legislation or rules of court dealing with the award of costs in cases formerly governed by s. 58 would have the effect of reducing the scope of the power conferred by that section.

The inter-relationship between s. 58 and O. 91, r. 1

It follows that the content of the power conferred by s. 58 was reduced when the Judicature Act 1876 Q. ("the 1876 Act") came into operation. Section 16 made provision for the coming into operation at the commencement of that Act of certain rules of court, scheduled to the Act, to "thenceforth regulate the proceedings in the Court". One such rule was O. 54, r. 1 which was in similar terms to O. 91, r. 1. Section 24 of the 1876 Act repealed all enactments inconsistent with that Act. Because O. 54, r. 1 was expressed to apply to "all proceedings in the Court", there is an argument for saying that s. 58 was inconsistent with that rule in that the rule makes comprehensive provision governing all cases in the Court. However, the better view is that s. 58 was not repealed and that the effect of O. 54, r. 1 was simply to eliminate the scope for the operation of s. 58 by making comprehensive provision that costs in all proceedings in the Court were in its discretion. Because s. 58 is expressed to operate in the absence of any other applicable provisions, the introduction of comprehensive provisions does not repeal s. 58 but merely deprives it of content until the comprehensive provisions are amended in such a way as to leave an area on which s. 58 can operate. It is to be noted that, in Long v. McArthur, Griffith C.J. expressed the view that, after the 1876 Act, all costs were in the discretion of the Court and that [5] "the rules laid down in The Costs Act were repealed by implication".

Just as there was no inconsistency between s. 58 and O. 54, r. 1, there is no inconsistency between s. 58 and O. 91, r. 1. Order 91, r. 1 came into force on 1 January 1901 when the rules contained in the schedule to the 1876 Act were replaced. Order 91, r. 1 was given statutory force by s. 2 of the Supreme Court Acts Amendment (Rules Ratification) Act 1928 Q.. But these changes did not affect the operation of s. 58. Although it remained unrepealed, the comprehensive provision made for costs by O. 91, r. 1 meant that s. 58 was left without any work to do.

In England, a different view was taken of Ord. LXV, r. 1, which was the counterpart to O. 54, r. 1 and O. 91, r. 1. In In re Mills' Estate; Ex parte Commissioners of Works and Public Buildings [6] , the Court of Appeal held that Ord. LXV, r. 1 was regulatory only, providing for the way in which costs were to be dealt with when the court possessed power, otherwise conferred, to deal with costs. In reaching that decision, the Court deferred to earlier authority and it seems that the Court would have been minded to reach a different conclusion had it not been for that authority [7] . Later, in In re Fisher [8] , it was suggested that the rule would have been ultra vires if it had been construed as conferring power on the court to order costs, as distinct from regulating the exercise of a power otherwise enjoyed. That explanation of the decision in Mills' Estate can have no application to O. 54, r. 1 which had statutory force when it formed part of the schedule to the 1876 Act. Furthermore, the antecedent introduction of s. 58 and the terms in which it is expressed provide another reason for refusing to adopt the view which was taken in England. That view is inconsistent with the approach of Griffith C.J. in Long v. McArthur [9] which, in our opinion, was plainly correct.

1. (1886) 34 Ch. D. 24. 2. (1886) 34 Ch. D., at pp. 34, 38, 42. 3. [1894] 1 Ch. 450, at p. 454. 4. (1901) 11 Q.L.J., at p. 139.

It follows that the Full Court of the Supreme Court was in error in identifying s. 58 as the source of the power to make the orders which were made. Order 91, r. 1 was the relevant source of power. The question is whether it conferred jurisdiction to make an order for costs against the receivers and to that question we now turn.

Does O. 91, r. 1 confer jurisdiction to award costs against a non-party?

According to their natural and ordinary meaning, the words of the rule are sufficiently expansive to enable the Court to make an order for costs against a person, whether that person is formally a party to the proceedings or not. The jurisdiction and the discretion thereby conferred are not limited. Because they are not limited it is easy to postulate a variety of circumstances where an exercise of the jurisdiction against a non-party would be extravagant and unjust. However, the existence of that possibility provides no justification for the imposition by the courts, by way of implication, of an arbitrary limitation upon the general jurisdiction conferred by the rule. To do so would, as will appear, deny power to the Court to order costs against a non-party in cases in which, in the interests of justice, such orders should be made. The inevitable answer to arguments directed to limiting curial jurisdiction based on the supposition that the jurisdiction might lend itself to abuse is that the court will and should develop principles governing the exercise of the discretion which will ensure that the jurisdiction is not exercised in such a way as to give rise to abuse. And that is the answer to the appellants' case to the extent to which it seeks to confine the scope of the jurisdiction by reference to arguments in terrorem.

The main thrust of the appellants' argument is, however, that the rule should be construed by reference to the supposed principle, said to be recognized both at common law and in equity, that, beyond certain well-established exceptions (which do not include the present case), the courts do not have jurisdiction to order payment of costs by a non-party. The principle, so-called, is but a reflection of the general statement, often made, that a court cannot make an order against a person who is not a party to the proceedings. That, of course, is true. Generally speaking, only parties on the record of the proceedings are bound by the orders made in the proceedings. But there are now a variety of situations in which persons, not being parties in that sense, will be bound. In this respect, it is interesting to note that s. 1 of the 1876 Act defined "[p]arty" so as to include "every person served with notice of or attending any proceeding although not named on the Record".

The appellants rely on judicial statements, both at common law and in equity, which deny the existence in the courts of any general authority or power to order costs against a non-party. The weakness in these statements is that they invariably concede the existence of an exception or exceptions to the limiting general rule which they enunciate, thereby suggesting that the limitation enunciated is one which goes to the exercise of discretion rather than to the existence of jurisdiction. The distinction between the two concepts was not always recognized or closely observed in the eighteenth century, particularly in equity where it was not uncommon to speak of having "no jurisdiction" to make an order when all that the form of words signified was that, as a matter of settled principle, a discretion would not be exercised in the manner suggested.

Perhaps the strongest of the statements which lend some support to the appellants is that made by Lord Abinger C.B. in Hayward v. Giffard [10] where the Court of Exchequer refused to make an order for costs against a non-party to the action even though he was the real party interested in the outcome of the suit.

If we were at liberty to consult equity and justice, we should probably make this rule absolute. But the authority of the Courts at Westminster is derived from the Queen's writ, directing them to take cognizance of the suits mentioned in the writs respectively, and thus bringing the parties before them. This being so, they have no power to order any particular individual to come before them at their pleasure. In the present case, if it could have been shewn that Spencer had committed any contempt of Court, or been guilty, in respect of this suit, of any thing in the nature of barratry or maintenance, it would have been another matter; but we cannot make any order against an individual who is not party to any suit before us, nor has been guilty of any contempt, but merely because he has an interest in the event of the suit. Later, in similar vein, in Mobbs v. Vandenbrande, Blackburn J. observed [12] : In ordinary cases, where there has been no abuse of its process, the Court has no jurisdiction to order a person not a party on the record to pay costs. But the action of ejectment was an anomaly. Even the jurisdiction to order costs against non-parties in ejectment actions was said to stem from the power of the court to protect its process from abuse [13] . But it is significant that, in ejectment actions, the making of an order for costs was put upon the basis that the order was made against "the real party to the suit". Thus, in Doe dem. Masters v. Gray, Lord Tenterden C.J. said [14] : "In ejectment we can make the real party to the suit pay the costs." 1. ibid., at p. 196 [p. 1400]. 2. (1864) 33 L.J.Q.B. 177, at p. 180. 3. Hutchinson v. Greenwood (1854), 4 El. & Bl. 324, at p. 326 [119 E.R. 125, at p. 126]. 4. (1830) 10 B. & C. 615, at p. 616 [109 E.R. 579, at p. 579], cited with approval in Hutchinson v. Greenwood (1854), 4 El. & Bl., at p. 326 [119 E.R., at p. 126], per Lord Campbell C.J.

However, this approach was not confined to ejectment actions. In Hearsey v. Pechell, Tindal C.J. said [15] :

The real question is, whether this is the action of the Plaintiff, or substantially the action of Mr. Wood.

If it were an action which the Plaintiff would not have brought but for the instigation and countenance of Wood, the case would fall within the principle of Tenant v. Brown [16] , and another case in the Court of King's Bench, where a master was compelled to pay costs for his servant, whom he had put forward as a Defendant instead of himself. But it is not clear to me that this is an action which the Plaintiff would not have brought without the instigation of Wood.

1. (1826) 5 B. & C. 208 [108 E.R. 78].
   1. (1839) 5 Bing. (N.C.) 466, at pp. 468-469 [132 E.R. 1179, at pp. 1179-1180].
   2. (1826) 5 B. & C. 208 [108 E.R. 78].

Other instances of the exercise of the jurisdiction against a non-party who was the real party, otherwise than in actions of ejectment, were cases concerning a relator in a relator action by an Attorney-General [17] , a solicitor who instituted proceedings without authority [18] , a person interested in an estate who unnecessarily attended on the taking of an account and thereby occasioned additional costs [19] , an unsuccessful claimant to a beneficial interest in an estate [20] , a next friend who purported to institute an action on behalf of a person said to be of unsound mind when that person was of sound mind [21] , and the directors of a company which unsuccessfully petitioned for the appointment of an administrator [22] .

1. Attorney-General v. Logan , [1891] 2 Q.B. 100, at pp. 103, 106, approved in Wentworth v. Attorney-General (N.S.W.) (1984), 154 C.L.R. 518, at p. 527. 2. In re Gardiner; Ex parte Orgill (1890), 16 V.L.R. 641. 3. Sharp v. Lush (1879), 10 Ch. D. 468. 4. Re Knight; Knight v. Gardner (1887), 57 L.T. 238. 5. Palmer v. Walesby (1868), L.R. 3 Ch. 732. 6. In re Land and Property Trust Co. Plc. , [1991] 1 W.L.R. 601; [1991] 3 All E.R. 409.

In Ram Coomar Coondoo v. Chunder Canto Mookerjee, the Judicial Committee of the Privy Council sought to explain the exercise of the jurisdiction to order costs against persons who were not parties on the record [23] :

The instances in which persons other than parties to the suit have been held liable to costs in England, have been principally those of solicitors, over whom the Court exercises disciplinary jurisdiction, as in the case of In re Jones [24] . The Courts have also ordered the real parties to pay the costs in actions of ejectment, originally on the ground that that action was in form a fictitious proceeding, and having once assumed this power they have continued to exercise it in the actions substituted for that of ejectment. Again, the Courts, it has been said, would so interfere in case of any contempt or abuse of their proceedings: see Hayward v. Giffard. But all these cases relate to applications either in the cause itself, or to the summary jurisdiction of the Court. The Judicial Committee omitted to mention all the instances of orders for costs against non-parties mentioned in the previous paragraph of this judgment. Not all the cases in which orders were made against persons who were not parties on the record can be explained on the footing stated by the Judicial Committee. The relator cases are but one example. And it is artificial to attribute the orders for costs against solicitors to an exercise of the disciplinary power rather than to an exercise of the jurisdiction to award costs of the proceedings. 1. (1876) 2 App. Cas. 186, at p. 212. 2. (1870) L.R. 6 Ch. 497.

The cases awarding costs against non-parties are more readily explicable on the footing that there was no absence of jurisdiction to order costs against non-parties in the strict sense and that the jurisdiction could be exercised against persons who were considered to be the "real parties" to the litigation. That is how Lord Denman C.J. expressed the rule in Reg. v. Greene [25] , a decision which was overlooked in Ram Coomar Coondoo , which was an Indian appeal. Lord Denman C.J. said [26] :

We take the true rule to be that the Court may adjudge from all circumstances who is the party, and give costs against any party, or against an attorney, if the affidavit of the person sought to be charged, or any affidavit produced by an attorney, shews good ground for imposing them upon them respectively. But, if the claim for costs should arise from the affidavits produced in answer, there must be a special application. In the present case costs are asked in respect of the statements made in opposition to the rule. After the costs were taxed in that case, the Court held that the applicant's attorney was liable for the costs. On that occasion, Lord Denman C.J. said [27] : The question is, whether a person who, on a motion for a quo warranto information, acts as an attorney, is on that account to avoid payment of costs, when he has, in fact, been the relator, but has put forward another person in that capacity, who is unable to pay costs. I have no doubt that he is liable, where it appears that he is actually and virtually a relator. Patteson, Williams and Wightman JJ. agreed. 1. (1843) 4 Q.B. 646 [114 E.R. 1042]. 2. ibid., at p. 650 [p. 1044]. 3. ibid., at pp. 652-653 [pp. 1044-1045].

The person ordered to pay the costs in that case was a solicitor but that was not the ground on which the order for payment was made. It is plain from the Chief Justice's comments that it made no difference that the person ordered to pay costs was the solicitor on the motion; the principle applied was of general application.

The cases in which orders for costs have been made against non-parties, when considered in their entirety, justify the comment of Brooking J. in Burns Philp & Co. Ltd. v. Bhagat [28] :

I suspect that it is impossible to state with accuracy in what cases a court of common law or the Court of Chancery could or would award costs against someone who was not a party according to the record. But one thing is clear: there was a rule and there were exceptions to it, so that it could not be said that before the Judicature Acts the courts could or would never award costs against someone who was not a party in the strict sense. 1. Unreported; Supreme Court of Victoria; 31 January 1992.

Having regard to the variety and the nature of the circumstances in which an order for costs was made against a person who was not a party according to the record, we cannot accept that there was before the Judicature Acts a general rule that there was no jurisdiction to order costs against a non-party in the strict sense. It is plain enough that the courts from time to time awarded costs against a person who, not being a party on the record, was considered to be the "real party". It may be that these cases are capable of being explained on various grounds, including the ground that the non-party ordered to pay costs was guilty of abuse of process, taking a very broad view of what constitutes an abuse of process, but to say that does not deny that there was jurisdiction to make an order for costs against a non-party even if the jurisdiction was exercised in limited circumstances only.

Against this background, it is impossible to construe the wide and general words of O. 54, r. 1 and its successor O. 91, r. 1 as delimiting the jurisdiction to order payment of costs as one which was and is confined to parties to the proceedings. The language of the rule is quite inapt to give expression to the complex course of judicial decisions at common law and in equity before the Judicature Acts. Moreover, the extended concept of "party", including as it does a variety of persons on whom notice of proceedings is served, makes it inappropriate to introduce a limitation which was applied at a time when the concept of "party" related to a person on the record of the proceedings. It is preferable to interpret the words of the rule according to their natural and ordinary meaning as conferring a grant of jurisdiction to order costs not limited to parties on the record and ensure that the jurisdiction is exercised responsibly.

The appellants contend that the availability of an order for security for costs where the plaintiff is suing on behalf or for the benefit of another is a strong reason for denying the existence of a jurisdiction to order costs against a non-party. Indeed, it has been said that the practice of making such an order for security for costs and of staying the proceedings until it is given is the appropriate remedy [29] . No doubt it is an appropriate remedy in many cases but there are limitations attaching to the availability of security for costs. These limitations are such that security for costs is not a remedy in all cases in which justice calls for an order for the award of costs against a non-party. Security cannot be ordered against a defendant or a plaintiff who is an individual and who resides in the jurisdiction. The amount awarded as security is no more than an estimate of the future costs and it is not reasonable to expect a defendant to make further applications to the court at every stage when it appears that costs are escalating so as to render the amount of security previously awarded insufficient. And the availability of the remedy is scarcely a reason for denying the existence of jurisdiction to make an order for costs against the "real party" at the end of the trial of an action. The availability of an order for security for costs at an earlier stage of the litigation would, in many situations, be a strong argument for refusing to exercise a discretion to order costs against a non-party, but discretion must be distinguished from jurisdiction.

1. Ram Coomar Coondoo (1876), 2 App. Cas., at p. 211.

The decision of the House of Lords in Aiden Shipping Ltd. v. Interbulk Ltd. [30] provides support for the conclusion which we have reached. The provision under consideration in that case, s. 51(1) of the Supreme Court Act 1981 U.K., was couched in terms which differ from O. 91, r. 1. Section 51(1) provided:

Subject to the provisions of this or any other Act and to rules of court, the costs of and incidental to all proceedings , including the administration of estates and trusts, shall be in the discretion of the court, and the court shall have full power to determine by whom and to what extent the costs are to be paid. (Emphasis added.) Their Lordships held that there was no justification for implying a limitation on the power to the effect that costs could only be ordered to be paid by parties to the proceedings. Lord Goff of Chieveley (with whom the other members of the House of Lords agreed) remarked [31] : It is strange that courts should think it right to impose, by way of implication, a limit upon a wide statutory jurisdiction. Notwithstanding the obvious differences between the English provision and the Queensland rule, and the difference in contexts, it would be equally strange if this Court were to impose upon the general discretionary power conferred by O. 91, r. 1 (its predecessor, O. 54, r. 1, also having had statutory force) a like limitation [32] . 1. [1986] A.C. 965. 2. ibid., at p. 979. 3. Note the similar opinion expressed by the Full Court of the Federal Court (Black C.J., Northrop and Ryan JJ.) in relation to s. 32 of the Bankruptcy Act 1966 Cth in Bent v. Gough; unreported; 5 June 1992.

In criticizing the limitation which the courts below had chosen to introduce, namely, that courts should only be free to award costs against a person who is a party to proceedings, Lord Goff pointed out [31] that this was scarcely "an apt criterion" upon which to found a limitation on the jurisdiction to order costs in view of the extended statutory definition of "party" which included a person upon whom notice of the proceedings had been served pursuant to the rules or any other statutory provision. The same comment may rightly be made with respect to the suggested limitation in the present case.

His Lordship went on to refer [33] to the cases where costs may be awarded against a solicitor, against a relator in a relator action and against a next friend. He regarded them as cases in which costs may be awarded against a person who is not a party to the proceedings. His Lordship then said [33] :

The existence of these cases adds weight to [the] submission that no implied limitation with reference to the word "party" can be read into the broad terms of the statute; though, had these cases stood alone, I would perhaps have been unwilling to rely on such special cases as the sole justification for rejecting the previous authorities in the Court of Appeal. I prefer to proceed upon the broader ground, that there is no basis for the proposed implied limitation upon the express words of the statute; and, on that basis, I am happy to rely upon these special cases in support of that broader approach. We respectfully agree with these comments. 1. [1986] A.C., at p. 980. 2. [1986] A.C., at p. 980.

The conclusion that the wide words of O. 91, r. 1 should not be read down so as to preclude jurisdiction to make an order for costs against a non-party does not, of course, mean that a judge has an unfettered discretion to make any order that he or she chooses. The wide jurisdiction conferred by the rule "must be exercised judicially and in accordance with general legal principles pertaining to the law of costs", to take up the words of Lambert J.A. in Oasis Hotel Ltd. v. Zurich Insurance Co. [34] .

1. (1981) 124 D.L.R. (3d) 455, at p. 462. In that case, an order for costs as between solicitor and client was made against a director and principal shareholder of the insolvent plaintiff company, notwithstanding that he was a non-party, on the ground that he had instigated an action which sought to make the court an instrument of fraud.

Obviously, the prima facie general principle is that an order for costs is only made against a party to the litigation. As our discussion of the earlier authorities indicates, there are, however, a variety of circumstances in which considerations of justice may, in accordance with general principles relating to awards of costs, support an order for costs against a non-party. Thus, for example, there are several long-established categories of case in which equity recognized that it may be appropriate for such an order to be made [35] .

1. See the discussion in Oasis Hotel, ibid., at pp. 458-459.

For our part, we consider it appropriate to recognize a general category of case in which an order for costs should be made against a non-party and which would encompass the case of a receiver of a company who is not a party to the litigation. That category of case consists of circumstances where the party to the litigation is an insolvent person or man of straw, where the non-party has played an active part in the conduct of the litigation and where the non-party, or some person on whose behalf he or she is acting or by whom he or she has been appointed, has an interest in the subject of the litigation. Where the circumstances of a case fall within that category, an order for costs should be made against the non-party if the interests of justice require that it be made.

The conclusion that the jurisdiction conferred by O. 91, r. 1 is not limited to parties requires that the appeal be dismissed.

This appeal is against a judgment of the Full Court of the Supreme Court of Queensland (Williams and Ryan JJ. Dowsett J. dissenting) upholding the separate decisions of two single judges (Connolly J. and de Jersey J.) to award costs against the receivers and managers of two companies who had engaged in unsuccessful litigation in the name of the companies, acting apparently at the behest of and for the benefit of two banks which held the mortgage debentures under which the receivers and managers were appointed.

The appellants submit that the Court lacked jurisdiction to award costs against a person who was not a party to the litigation. The receivers and managers were, of course, not parties to the action in this case.

Until the decision of the House of Lords in Aiden Shipping Co. Ltd. v. Interbulk Ltd. [36] , the conventional view was in accordance with the appellants' submission [37] . But in that case it was held that the power to award costs was not limited to the parties to the action and it is contended by the respondents that, notwithstanding the different wording of the relevant English provision for costs, the decision should be followed in Australia or, at all events, in Queensland.

1. [1986] A.C. 965. 2. See Allman v. Daly [No. 2] , [1959] V.R. 614, at p. 623; Australian Guarantee Corporation Ltd. v. De Jager , [1984] V.R. 483, at pp. 501-502.

The power to award costs is now statutory. At common law the power had always been the creature of statute. Statutes were passed at different times starting as long ago as the Statute of Gloucester in 1278 (6 Edw. 1). But in equity the power to award costs formed part of the discretionary authority of the Lord Chancellor and was not derived from statute. The Court of Chancery "exercised a most wide discretion not only as to the circumstances under which costs were to be awarded, but apparently as to the measure and fullness of the costs" [38] . It awarded costs in all cases "not from any authority, but from conscience and arbitrio boni viri" [39] . With the fusion of the administration of law and equity, s. 16 of the Supreme Court of Judicature Act 1875 U.K. (38 & 39 Vict. c. 77) provided for rules of court, contained in the First Schedule to that Act, to regulate proceedings in the High Court of Justice and Court of Appeal. Those rules of court provided in O. 55, so far as is material, that:

Subject to the provisions of the Act, the costs of and incident to all proceedings in the High Court shall be in the discretion of the Court; but nothing herein contained shall deprive a trustee, mortgagee, or other person of any right to costs out of a particular estate or fund to which he would be entitled according to the rules hitherto acted upon in Courts of Equity. The rules scheduled to the Act were repealed by The Statute Law Revision Act 1883 U.K. (46 & 47 Vict. c. 39) and new rules referred to as The Rules of the Supreme Court 1883 were made pursuant to s. 19 of the Supreme Court of Judicature Act 1881 U.K. (44 & 45 Vict. c. 68). Order 65, r. 1 of these rules provided that, subject to the provisions of, among other things, the Judicature Acts and the rules of court, the costs of and incident to all proceedings in the Supreme Court, including the administration of estates and trusts, were within the discretion of the court or judge. 1. Andrews v. Barnes (1888), 39 Ch. D. 133, at p. 138. 2. Corporation of Burford v. Lenthall (1743), 2 Atk. 551, at p. 552 [26 E.R. 731, at p. 732].

In In re Mills' Estate; Ex parte Commissioners of Works and Public Buildings [40] it was held that the effect of the Judicature Acts and of O. 65 was not such as to confer any new jurisdiction to award costs, but was merely to regulate the mode in which costs were to be dealt with in cases where the court already had jurisdiction to award costs. Thus the relevant provisions did not confer power to award the costs of an application for getting out moneys paid into court in respect of land compulsorily acquired where the Acts under which the land was acquired made no provision for the payment of costs.

The legislature sought to overcome this restrictive interpretation of the relevant provisions by enacting s. 5 of the Supreme Court of Judicature Act 1890 U.K. (53 & 54 Vict. c. 44). That section provided:

Subject to the Supreme Court of Judicature Acts, and the rules of court made thereunder, and to the express provisions of any Statute, whether passed before or after the commencement of this Act, the costs of and incident to all proceedings in the Supreme Court, including the administration of estates and trusts, shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and to what extent such costs are to be paid. (Emphasis added.) The words of s. 5 of the Supreme Court of Judicature Act 1890 have been passed down and now find expression in an almost identical form in s. 51(1) of the Supreme Court Act 1981 U.K.. The Rules of the Supreme Court 1965 now simply provide in O. 62, r. 2(4): The powers and discretion of the Court under section 51 of the Act (which provides that the costs of and incidental to proceedings of the Supreme Court shall be in the discretion of the Court and that the Court shall have full power to determine by whom and to what extent the costs are to be paid) shall be exercised subject to and in accordance with this Order.

The efforts of the legislature to extend the court's jurisdiction to award costs met with resistance. In Forbes-Smith v. Forbes-Smith [41] , a divorce case, the wife petitioned for judicial separation and the husband petitioned for divorce on the ground of the wife's adultery. The wife's petition was dismissed and a decree nisi was made on the husband's petition but, notwithstanding a consolidation order, it was held that there was no jurisdiction to order the co-respondent to the husband's petition to pay the costs of the proceedings on the wife's petition. Collins L.J. said [42] :

The last point taken was upon s. 5 of the Act of 1890. The learned President has satisfactorily disposed of the argument upon that section, and I entirely concur with him. Some limitation must be put upon the generality of the words. They cannot enable the Court to order the costs to be paid by a stranger to the proceedings; they can only mean that the Court may order the costs to be paid by any of the parties. The section does not confer jurisdiction to visit a co-respondent with costs unless he is a party to the proceedings; and here the co-respondent was not a party to the wife's petition unless the consolidation order has made him one. I have already stated my reasons for holding that the consolidation order had no such effect. In my opinion, therefore, the learned President had no jurisdiction to order the co-respondent to pay the costs of the proceedings on the wife's petition, though, if he had jurisdiction, he may have had abundant ground for exercising his discretion in that way. 1. [1901] P. 258. 2. ibid., at p. 271.

Forbes-Smith v. Forbes-Smith was followed by the Court of Appeal in John Fairfax & Sons Pty. Ltd. v. E. C. de Witt & Co. (Australia) Pty. Ltd. [43] where it was held that, even when two actions were tried together, there was no jurisdiction in the absence of an order for consolidation to order the costs of a party to one set of proceedings to be paid by a party to the other.

In Aiden Shipping Co. Ltd. v. Interbulk Ltd. [44] the Court of Appeal reluctantly applied Forbes-Smith v. Forbes-Smith and John Fairfax & Sons Pty. Ltd. v. E. C. de Witt & Co. (Australia) Pty. Ltd., but those cases were overruled and the decision was reversed on appeal to the House of Lords. The judgment is contained in the speech of Lord Goff of Chieveley, who said [45] :

It is, I consider, important to remember that s. 51(1) of the Act of 1981 is concerned with the jurisdiction of the court to make orders as to costs. Furthermore, it is not to be forgotten that the jurisdiction conferred by the subsection is expressed to be subject to rules of court, as was the power conferred by s. 5 of the Act of 1890. It is therefore open to the rule-making authority (now the Supreme Court Rule Committee) to make rules which control the exercise of the court's jurisdiction under s. 51(1). In these circumstances, it is not surprising to find the jurisdiction conferred under s. 51(1), like its predecessors, to be expressed in wide terms. The subsection simply provides that "the court shall have full power to determine by whom the costs are to be paid." Such a provision is consistent with a policy under which jurisdiction to exercise the relevant discretionary power is expressed in wide terms, thus ensuring that the court has, so far as possible, freedom of action, leaving it to the rule-making authority to control the exercise of discretion (if it thinks it right to do so) by the making of rules of court, and to the appellate courts to establish principles upon which the discretionary power may, within the framework of the statute and the applicable rules of court, be exercised. Such a policy appears to me, I must confess, to be entirely sensible. It comes therefore as something of a surprise to discover that it has been suggested that any limitation should be held to be implied into the statutory provision which confers the relevant jurisdiction. 1. [1985] 1 W.L.R. 1222; [1985] 3 All E.R. 641. 2. [1986] A.C., at p. 975.

As I have said, the relevant provisions in Queensland do not contain the same wording as s. 5 of the Supreme Court of Judicature Act 1890 U.K.. In particular they do not confer express "power to determine by whom costs are to be paid". It is necessary briefly to trace those provisions historically. The law in Queensland relating to costs at common law was consolidated by the Costs Act 1867 Q.. At the same time s. 58 of the Supreme Court Act 1867 Q. provided:

The Supreme Court shall have power to award costs in all cases lawfully brought before it and not provided for otherwise than by this section. Costs in equity were covered by s. 22 of the Supreme Court Act which conferred upon the court the same equitable jurisdiction as was possessed by the Lord High Chancellor or other equity judges of England in the exercise of similar jurisdiction.

The Judicature Act 1876 Q. provided in s. 16 that the rules of court set forth in the schedule to that Act were to come into operation at the commencement of that Act. Section 17 of the Judicature Act provided for the making of rules of court from and after the commencement of the Act by the judges of the Supreme Court of Queensland, subject to annulment by Order in Council and in the manner provided in s. 22. The rules contained in the schedule to the Act provided by O. 54, r. 1:

Subject to the provisions of this Act the costs of and incident to all proceedings in the Court shall be in the discretion of the Court but nothing herein contained shall deprive a trustee mortgagee or other person of any right to costs out of a particular estate or fund to which he would be entitled according to the rules hitherto acted upon in Courts of Equity Provided that where any action or issue is tried by a jury the costs shall follow the event unless upon application made at the trial for good cause shown the Judge before whom such action or issue is tried or the Court shall otherwise order.

The Queensland Judicature Act was amended in 1900 and the amending Act (64 Vict. No. 6) provided in s. 3 that the authority of the judges to make rules under the Judicature Act extended to making, by way of re-enactment or otherwise, any rule to the same purport and effect as any rule contained in the schedule to the Act, with or without modification or amendment. The rules of court contained in the schedule to the Judicature Act at the time that Act was passed, together with the amending rules made from time to time, were repealed by The Repealing Rules 1900. New rules were thereupon promulgated under the authority of, among other sections, s. 17 of the Judicature Act and s. 3 of the amending Act of 1900. Order 91, r. 1 of these new rules ("The Rules of the Supreme Court 1900") provided, so far as is material:

Subject to the provisions of the Judicature Act [as amended] and these Rules, the costs of and incident to all proceedings in the Court, including the administration of estates and trusts, shall be in the discretion of the Court or Judge.

The next step was the Supreme Court Act 1921 Q., s. 11 of which conferred power on the Governor, with the concurrence of any two or more judges, to make by Order in Council all such rules of court "as may be deemed necessary or convenient for regulating the procedure and practice of the Supreme Court for the purpose of giving full effect to the Principal Act [the Judicature Act] and this Act and any other Act conferring jurisdiction power or authority on the Court". Section 11 also provided that, until repealed or superseded, the rules in force at the commencement of that Act were to continue except in so far as any of them were inconsistent with or repealed by that Act (s. 11(6)(i)). Thus O. 91, r. 1 continued in force. Section 12(2)(i) and (ii) of the Supreme Court Act 1921 repealed ss. 16 and 17 of the Judicature Act and s. 3 of the amending Act of 1900 respectively. Section 12(2)(iii) repealed the rule-making powers contained in ss. 52, 53 and 63 of the Supreme Court Act 1867. But s. 58 of the Supreme Court Act 1867 was allowed to stand and remains in force today.

Finally, in 1928, s. 2 of the Supreme Court Acts Amendment (Rules Ratification) Act 1928 Q. ratified all rules of court existing at the passing of that Act and made or purporting to have been made under the Judicature Act or the Supreme Court Act 1921 (s. 2(1)). It further provided that the existing rules and any rules made thereafter should have statutory force (s. 2(2)).

The relevant provisions which are in force in Queensland are, therefore, O. 91, r. 1 and s. 58 of the Supreme Court Act 1867. The respondents' primary submission is that either O. 91, r. 1 or s. 58 is sufficient to authorize the Supreme Court, in a proper case, to award costs against a person not a party to the proceedings before it. This submission basically raises no more than a question of construction. But the respondents also rely upon the recognized exceptions to the general principle that costs may not be awarded against a non-party. They say that this case falls within those exceptions or is sufficiently analogous to be included in them. In one sense, the exceptions, which admittedly do exist, create a logical difficulty in the way of the appellants' argument. If there are exceptions allowing costs to be awarded to non-parties, then the provisions conferring jurisdiction to award costs must encompass them. That is to say, the provisions must contemplate the award of costs to a non-party, if only in an exceptional case. Moreover, there is a certain artificiality in any proposition that an award of costs cannot be made against a person merely because he is not a party to the proceedings. If that were all, then it would be possible simply to join the person as a party for the purpose of obtaining an order for costs against him. Indeed, in the case of Mathias v. Yetts [46] that was said to have been the practice where it was otherwise appropriate to make an award of costs against a person who was not a party. When it is said that as a general principle costs ought not be awarded against a person who is not a party to the proceedings, what is really being asserted is, not that there is no jurisdiction to do so, but that there is no justification for it because generally speaking persons who are not parties lack a sufficient connection with the litigation to provide a proper basis upon which to award costs against them. Mere lack of joinder is not the reason and, as I have said, if it were, it could easily be cured. I am not sure that this distinction was always observed during argument.

In Mathias v. Yetts, Jessel M.R. pointed to a "well established" rule in equity, called the three A's rule, about which he said [47] :

it was this, in the case of what was then called an attorney (I am afraid the three A's would hardly do now), agent, or arbitrator, the rule was that if he was party to a fraud from which he got no benefit, he was liable to be made a defendant with the view of making him liable to the payment of the costs in case the principal defendant was unable to pay them. It consequently could have been no use making him a party if the principal defendant was solvent, and it was generally very invidious. The rule is no longer of any practical importance having regard to the power of the court to award damages [48] . Further, the situation of a solicitor is admittedly a special one. The jurisdiction to order him to pay the costs, whether of his own client or of the opposite side, is a summary jurisdiction to punish for misconduct and would appear to rest upon the duty of the court to supervise the conduct of its solicitors [49] . 1. ibid., at p. 502. 2. See Daniell's Chancery Practice, 8th ed. (1914), vol. I, p. 206. 3. See, e.g., Myers v. Elman , [1940] A.C. 282, at pp. 318-319, per Lord Wright.

But there was a clear exception to any rule that costs could not be awarded to a person who was not a party to the proceedings in the case of ejectment proceedings. This was recognized in Hayward v. Giffard [50] . The general rule, said Lord Abinger C.B., who delivered the judgment of the Court, was that it would not interfere to make a person who was not a party to the record pay the costs of the action, even though he was really the person interested in the outcome. But, his Lordship continued, one excepted case was ejectment "which is a fictitious proceeding" in which "the Courts allow the action to be brought in the name of a nominal plaintiff, and allow the landlord to come in and defend, but they take notice of the real parties litigant" [51] . Lord Abinger also pointed to other circumstances in which an order might be made against a person not a party to the proceedings when he said [52] :

In the present case, if it could have been shewn that Spencer [the person against whom an order for costs was sought] had committed any contempt of Court, or been guilty, in respect of this suit, of any thing in the nature of barratry or maintenance, it would have been another matter; but we cannot make any order against an individual who is not party to any suit before us, nor has been guilty of any contempt, but merely because he has an interest in the event of the suit. 1. (1838) 4 M. & W. 194 [150 E.R. 1399]. 2. (1838) 4 M. & W., at p. 197 [150 E.R., at p. 1400]. 3. ibid., at p. 196 [p. 1400]. See also Waldron v. Mitchell (1892), 8 W.N. (N.S.W.) 117; Hutchinson v. Greenwood (1854), 4 El. & Bl. 324 [119 E.R. 125]; Evans v. Rees (1842), 2 Q.B. 334 [114 E.R. 131]; Mobbs v. Vandenbrande (1864), 33 L.J. (N.S.) Q.B. 177; Ram Coomar Coondoo v. Chunder Canto Mookerjee (1876), 2 App. Cas. 186, at p. 212.

Further, there is authority which establishes that a next friend may be required to pay the costs of a suit commenced in the name of another [53] . And in Wentworth v. Attorney-General (N.S.W.) [54] this Court, relying upon Attorney-General v. Logan [55] , recognized that a relator might be made responsible for costs. Admittedly, the section in question in that case was s. 76(1) of the Supreme Court Act 1970 N.S.W. which placed costs in the discretion of the court and provided in the same terms as s. 5 of the English Act of 1890 that the court should have "full power to determine by whom and to what extent costs are to be paid". But of that provision this Court said [56] :

It would not be right to give that section a narrow interpretation and the argument submitted on behalf of the Attorney-General, that it does no more than change the rule that the costs follow the event, cannot be accepted. Section 76(1) confers a wide discretion on the Court to decide whether any and which party to proceedings shall pay costs to another party, and, if it binds the Crown, enables the Court to order the Crown, or the Attorney-General proceeding at the relation of a person or body, to pay the costs. And in Reg. v. Greene [1] where a rule nisi for a quo warranto information was not pursued, the court held that an attorney, who had set up an impecunious relator, should bear the costs on the discharge of the rule. The case does not however turn upon the fact that the person concerned was an attorney. Lord Denman C.J. said [2] : Nothing, however, is more certain than that this Court has in several instances granted costs against persons who have made affidavits without being strictly parties, especially against attorneys, who are considered as being before the Court, and, as its officers, bring cases to its notice. This has occurred in matters both of a civil and of a criminal character, and that too where the conduct has been impeached by affidavits in answer, and there has been no opportunity of shewing cause against granting costs. We take the true rule to be that the Court may adjudge from all circumstances who is the party, and give costs against any party, or against an attorney, if the affidavit of the person sought to be charged, or any affidavit produced by an attorney, shews good ground for imposing them upon them respectively. 1. Palmer v. Walesby (1868), 3 Ch. App. 732. 2. (1984) 154 C.L.R. 518, at p. 527. 3. [1891] 2 Q.B. 100, at p. 103. 4. (1984) 154 C.L.R., at pp. 527-528. 5. (1842) 4 Q.B. 646 [114 E.R. 1042]. 6. (1842) 4 Q.B., at pp. 649-650 [114 E.R., at pp. 1043-1044].

In a Canadian case, Re Sturmer and Town of Beaverton [3] , Reg. v. Greene was treated as authority for exercising jurisdiction to award costs against the real litigant where two ratepayers had put forward a third person, who was without means, as an applicant in an unsuccessful proceeding to quash a municipal by-law. Clute J. said [4] :

I do not find that Reg. v. Greene has ever been overruled or questioned. It is, I think, an authority in an application of this kind to give costs against the party who is the real litigant, although his name does not appear as the applicant making the motion. Middleton J. summarized the power to award costs at common law [5] : It is quite true that the jurisdiction of the Common Law Courts to award costs must, in general, be found in some statute; but it is equally a recognized exception to this general statement that the Common Law Courts always had power to award costs against one unsuccessfully invoking the aid of its process, even when the Court had no jurisdiction to entertain the application: R. v. Bennett [6] ; Re Cosmopolitan Life Association [7] ; In re Bombay Civil Fund Act [8] . And the Court always had power to award costs against the real applicant when the motion was made by him in the name of a man of straw for the purpose of avoiding liability. The Courts were never so blind as to be unable to see through the flimsy device nor so impotent as to be unable to act. He then dealt with the power to award costs in equity [9] : In Chancery, there never was any such limitation suggested as to the power of the Court over costs. The books contain many references as to the mode in which payment of costs may be enforced against persons not parties to the suit ; but singularly do not contain, so far as I can ascertain, any case in which the foundation of that jurisdiction or the principles by which the discretion of the Court was governed, are discussed. It should be added that in Re Sturmer and Town of Beaverton , s. 119 of the Ontario Judicature Act applied and was in the same terms as s. 5 of the English Act of 1890 [10] . 1. (1912) 25 O.L.R. 566. 2. ibid., at p. 571. 3. ibid., at p. 572. 4. (1902) 4 O.L.R. 205. 5. (1893) 15 P.R. 185. 6. (1888) 40 Ch. D. 288. 7. (1912) 25 O.L.R., at pp. 575-576. 8. cf. Rockwell Developments Ltd. v. Newtonbrook Plaza Ltd. (1972), 27 D.L.R. (3d) 651; Alexanian v. Dolinski (1973), 43 D.L.R. (3d) 649; see also Oasis Hotel Ltd. v. Zurich Insurance Co. (1981), 124 D.L.R. (3d) 455; Basran v. Basran (1981), 123 D.L.R. (3d) 508; Baker Acceptance Corporation Ltd. v. Gordon, Gordon and Electric Circus (1986), 70 B.C.L.R. 140; Young v. Young (1990), 75 D.L.R. (4th) 46; Burns Philp & Co. Ltd. v. Bhagat (unreported; Supreme Court of Victoria; 31 January 1992).

The cases therefore establish a long-asserted jurisdiction to award costs in appropriate cases against a person who is not a party to the proceedings where that person is the effective litigant standing behind an actual party or where there has been a contempt or abuse of the process of the court. Even if the cases were confined to ejectment proceedings (and clearly they are not), the principle lying behind the ejectment cases is that the real litigant rather than the nominal party may be made liable for costs. As Lord Campbell C.J. said in Hutchinson v. Greenwood [11] :

The principle is that the individuals who order an appearance to be entered in ejectment, in the names of those not really defending the suit, abuse our process, and that, as they substantially are the suitors, we have jurisdiction to make them pay the costs. There is no compelling reason to my mind why that principle should be confined to cases of ejectment. 1. (1854) 4 El. & Bl., at p. 326 [119 E.R., at p. 126].

Order 91, r. 1 of the Queensland Rules of the Supreme Court places the costs of and incident to all proceedings in the court in the discretion of the court or a judge. True it is that the rule does not expressly say that the discretion extends to determining who shall pay the costs as does the English Act of 1890. But no limit is imposed upon the discretion conferred and in the absence of any implied limit there is no justification for confining the jurisdiction with regard to the persons against whom costs may be awarded. I can see no more reason for implying such a limit in this case than there was in Aiden Shipping Co. Ltd. v. Interbulk Ltd. True it is that in general costs are not awarded against non-parties, but that is because it is generally inappropriate to do so. But I see nothing in the rule to prevent it being done in the exceptional case where it is appropriate to do so. Even the narrow view taken in England in In re Mills' Estate of O. 65, r. 1, which was that the object of that rule was not to confer a jurisdiction which did not previously exist but to regulate the manner in which the jurisdiction given to the court, and which the court had independently of the rule, was to be exercised, does not deny the existence of a jurisdiction to order a non-party to pay costs where appropriate. The wording of O. 91, r. 1 does not confine the discretion to award costs to the parties to the proceedings. The circumstances in which it would be appropriate to award costs to a non-party would necessarily be confined, but that is a question of discretion, not jurisdiction. I should add that the discretion to award costs is to be exercised judicially so that a person against whom costs may be awarded must, if not a party, be brought before the court. In many cases the convenient method of bringing him before the court would be to make him a party whereupon, even upon the appellants' argument, any problem of lack of jurisdiction would disappear.

It follows that, in my view, there was power under O. 91, r. 1 to award costs in this case against the receivers and managers. Since s. 58 of the Supreme Court Act 1867 does not apply where costs are otherwise provided for and, as O. 91, r. 1 does so provide, s. 58 has no application. Indeed, having regard to the breadth of O. 91, r. 1, it may be doubted whether s. 58 any longer has any practical operation at all [12] .

In Ram Coomar Coondoo v. Chunder Canto Mookerjee the appellants sought in a separate action to recover the costs incurred by them in litigation in which they were the successful defendants. The unsuccessful plaintiffs in that litigation were impecunious and unable to pay the costs. The appellants alleged that it was the respondent who effectively instigated and maintained the litigation at his own expense. There had been an application to join the respondent in those proceedings which had failed. The Privy Council rejected the appellants' claim, but did not deny the jurisdiction to award costs against a non-party, at all events in the original proceedings. The following observation was made [13] :

The instances in which persons other than parties to the suit have been held liable to costs in England, have been principally those of solicitors, over whom the Court exercises disciplinary jurisdiction, as in the case of In re Jones [14] . The Courts have also ordered the real parties to pay the costs in actions of ejectment, originally on the ground that that action was in form a fictitious proceeding, and having once assumed this power they have continued to exercise it in the actions substituted for that of ejectment. Again, the Courts, it has been said, would so interfere in case of any contempt or abuse of their proceedings: see Hayward v. Giffard. But all these cases relate to applications either in the cause itself, or to the summary jurisdiction of the Court. Thus the Privy Council rejected the notion that a separate action might be brought to recover costs against a non-party to litigation which was concluded. But their further observations point more widely to the desirability of confining the exceptions to the general principle that costs may not be awarded against persons who are not parties to the proceedings. They said of the appellants' attempt to resort to the general principles of justice, equity and good conscience [15] : The consequences of such a resort in cases of this character would be to make the law utterly uncertain, to raise, as before observed, interminable questions as to the degree of interference which would sustain the action, and mischievously to multiply and perpetuate litigation after the termination of the original suit. 1. (1876) 2 App. Cas., at p. 212. 2. (1870) L.R. 6 Ch. App. 497. 3. (1876) 2 App. Cas., at p. 214.

The only question raised in this appeal concerned the existence of jurisdiction to make an award of costs against a non-party. The question whether, given jurisdiction, an award ought to have been made against the receivers and managers in this case was not argued. There is some authority for making such an award [16] . Having regard to the limited nature of the appeal, I should do no more than observe that an order for security for costs must ordinarily be the appropriate remedy where a receiver and manager conducts litigation through a company which will be unable to pay the costs of the defendant if the defendant is successful in his defence [17] . Moreover, as Mason C.J. recognized in Devenish v. Jewel Food Stores Pty. Ltd. [18] , applications for security for costs should ordinarily be made promptly before significant expense is incurred. However, it is not possible to pursue these considerations in this appeal.

1. See In re Arthur Williams & Co.; Ex parte Official Receiver , [1913] 2 K.B. 88, at p. 94; Re Bacal Contracting Ltd. v. Modern Engineering (Bristol) Ltd. , [1980] 2 All E.R. 655; Greenwood Forest Products (1969) Ltd. v. Newnes Machine Ltd. (1986), 32 D.L.R. (4th) 279; Kelaw Pty. Ltd. v. Catco Developments Pty. Ltd. (1989), 15 N.S.W.L.R. 587, at p. 593. 2. See Sent v. Jet Corporation of Australia Pty. Ltd. (1984), 2 F.C.R. 201, at pp. 214-215. 3. (1990) 64 A.L.J.R. 533, at p. 534; 94 A.L.R. 664, at p. 666.

I agree with the judgment of Mason C.J. and Deane J. I would add one observation.

It is contrary to long-established principle and wholly inappropriate that the grant of power to a court (including the conferral of jurisdiction) should be construed as subject to a limitation not appearing in the words of that grant [19] . Save for a qualification which I shall later mention, a grant of power should be construed in accordance with ordinary principles and, thus, the words used should be given their full meaning unless there is something to indicate to the contrary. Powers conferred on a court are powers which must be exercised judicially and in accordance with legal principle. This consideration leads to the qualification to which I earlier referred. The necessity for the power to be exercised judicially tends in favour of the most liberal construction, for it denies the validity of considerations which might limit a grant of power to some different body, including, for example, that the power might be exercised arbitrarily or capriciously or to work oppression or abuse.

1. See Hyman v. Rose , [1912] A.C. 623, at p. 631; F.A.I. General Insurance Co. Ltd. v. Southern Cross Exploration N.L. (1988), 165 C.L.R. 268, at p. 290. McHugh J.

The question in this appeal is whether the Supreme Court of Queensland has power to make an order for costs against the receiver of a company on the ground that the receiver instituted, maintained or defended proceedings in the name of the company. The Full Court of the Supreme Court unanimously held that the Court has power under s. 58 of the Supreme Court Act 1867 Q. to make such an order. By majority (Williams and Ryan JJ., Dowsett J. dissenting), the Full Court also held that, in the circumstances of the present case, orders for costs against the receivers of two companies were properly made.

The appellants are the receivers and managers of Howe Corporation Pty. Ltd. ("Howe"), having been appointed to those offices by two banks which held a mortgage debenture over the assets of Howe. The first appellant is also the receiver and manager of Forest Pty. Ltd. ("Forest"), having been appointed to those offices by the same two banks. In December 1988, Forest commenced proceedings against the first two respondents for specific performance of an agreement for the sale of certain shares. Forest also commenced proceedings against the third respondent which had guaranteed the obligations of the first two respondents as purchasers of the shares. After the commencement of the action by Forest, the respondents brought a counterclaim against Howe. The solicitors on the record for Forest and for Howe were the solicitors who acted for the banks. The solicitors received their instructions in respect of the action and counterclaim from the banks and the appellants.

In February 1989, Dowsett J. ordered Forest to provide security in the sum of $40,000 for the costs of the respondents. At that time, the respondents had already incurred a liability for costs of $50,000, they were likely to incur a further liability for costs of $65,000 before the trial commenced, and they were likely to incur a liability for a further $100,000 in costs if the matter went to trial. However, the respondents made no subsequent application to increase the amount provided for security for costs.

The respondents entered judgment against Forest when the action did not proceed. After Howe failed to comply with an order for discovery, the respondents entered judgment against that company. Subsequently, the respondents applied to the Supreme Court for an order that the appellants be made parties to the counterclaim and for an order that Howe and the appellants pay the costs of the application and counterclaim. Connolly J., who heard the application, made the orders sought in relation to costs. His Honour thought that it was unnecessary to join the appellants as parties to the counterclaim because the banks had maintained the defence of Howe to the counterclaim. Subsequently, the respondents applied for an order that the first appellant, among others, pay the respondents' costs of the action brought by Forest. The application was heard by de Jersey J. who held that it was unnecessary to join the first appellant as a party because he was "the real instigator of the litigation and the person who has been conducting it; a person who, having caused the commencement of the action and then its abandonment should not be allowed now to shelter behind the company, devoid of assets".

The Full Court of the Supreme Court rejected appeals by the appellants against the orders made by Connolly and de Jersey JJ. [20] . The Full Court (Williams, Ryan and Dowsett JJ.) unanimously held that the orders were authorized by s. 58 of the Supreme Court Act. However, Dowsett J. thought that the exercise of the discretion conferred by that section had miscarried. He upheld the appeals.

In my opinion, s. 58 did not apply to the present case because O. 91, r. 1 of the Rules of the Supreme Court made provision for the costs of the action and counterclaim.

The Supreme Court shall have power to award costs in all cases lawfully brought before it and not provided for otherwise than by this section.

Subject to the provisions of the Judicature Act and these Rules, the costs of and incident to all proceedings in the Court, including the administration of estates and trusts, shall be in the discretion of the Court or Judge: Provided that nothing herein contained shall deprive an executor, administrator, trustee, or mortgagee who has not unreasonably instituted or carried on or resisted any proceedings of any right to costs out of a particular estate or fund to which he would be entitled according to the Rules heretofore acted upon in Courts of Equity: Provided also, that, subject to the next following Rule, when any cause, matter, or issue is tried with a jury, the costs shall follow the event, unless the Judge by whom such a cause, matter, or issue is tried, or the Court, shall for good cause otherwise order.

Order 91, r. 1 regulates the making of orders for costs in "all proceedings in the Court". That being so, the costs of all proceedings in the Court are in the discretion of the Court or Judge, subject to the provisions of the Judicature Act 1876 Q., the Rules of the Supreme Court, and the two provisos to O. 91, r. 1 itself. Furthermore, even if upon the proper construction of O. 91, r. 1 that rule does not empower the court to award costs against non-parties, it nevertheless provides for the costs of "all cases" brought before the Supreme Court within the meaning of s. 58. On that hypothesis, the rule makes provision for the costs of such cases because it declares that the orders for costs in all proceedings in the Supreme Court can only be made against persons who are parties to the proceedings. Section 58 of the Supreme Court Act, therefore, has no operation in respect of any case brought before the Supreme Court. By reason of O. 91, r. 1, the costs of all cases in that Court are "provided for otherwise than by" s. 58 [21] . Moreover, because the Supreme Court of Queensland has had a rule in similar form to O. 91, r. 1 since the enactment of the Judicature Act [22] , s. 58 has had no operation since 1876.

1. cf. Spicer v. Carmody (1948), 48 S.R.(N.S.W.) 348, at p. 350. 2. See O. 54, r. 1 in the schedule to the Judicature Act.

Section 58 became part of the law of Queensland on the same day as the Costs Act 1867 Q. consolidated various enactments which had provided for and regulated the awarding of costs at common law, common law courts having no inherent power to order costs [23] . Section 58 conferred a residual jurisdiction to award costs in cases not otherwise "provided for". Although the section is expressed in general terms, it has never had any operation in cases within the equitable jurisdiction of the Court. Section 22 of the Supreme Court Act provided that the Supreme Court should have the same "equitable jurisdiction within the said colony of Queensland and its dependencies" as was "possessed by the Lord High Chancellor or other equity judges of England". The equitable jurisdiction of the Lord Chancellor to award costs did not depend upon statute [24] . The jurisdiction was exercised "from conscience and arbitrio boni viri" [25] . It was entirely discretionary [26] . On the equity side of the Supreme Court, therefore, costs were otherwise "provided for" within the meaning of s. 58.

1. Garnett v. Bradley (1878), 3 App. Cas. 944, at pp. 953-954. 2. Andrews v. Barnes (1888), 39 Ch. D. 133, at p. 138. 3. Corporation of Burford v. Lenthall (1743), 2 Atk. 551, at p. 552 [26 E.R. 731, at p. 732]. 4. Jones v. Coxeter (1742), 2 Atk. 400 [26 E.R. 642].

The combined effect of the Costs Act and s. 22 of the Supreme Court Act was to limit the scope of operation of s. 58 in common law proceedings and to make it inapplicable in equity proceedings. Moreover, its scope was further reduced when the Judicature Act was passed in 1876. Section 16 of that Act provided that the Rules of Court contained in "the Schedule to this Act" were to come into operation at the commencement of the Act and "thenceforth regulate the proceedings in the Court". Order 54, r. 1, which was in similar terms to O. 91, r. 1, was one of the rules scheduled. Furthermore, s. 24 provided that "From and after the commencement of this Act all enactments inconsistent therewith shall be repealed." In Long. v. McArthur [27] , Griffith C.J. said:

The result was that after The Judicature Act was passed all costs were in the discretion of the Court, and the rules laid down in The Costs Act were repealed by implication. However, s. 58 of the Supreme Court Act was not inconsistent with O. 54, r. 1 because s. 58 applied only to cases lawfully brought before the Supreme Court for which no provision for costs was made otherwise than by that section. Nevertheless, although s. 58 remained in force after the Judicature Act, its operation was spent while O. 54, r. 1 remained in force because that rule applied "to all proceedings in the Court". 1. (1901) 11 Q.L.J. 136, at p. 139.

As from 1 January 1901, the rules contained in the schedule to the Judicature Act including O. 54, r. 1 were repealed. On the same date, new rules came into force which included the present O. 91, r. 1. In 1928, the Supreme Court Acts Amendment (Rules Ratification) Act 1928 Q. ratified all rules made under the Judicature Act and the Supreme Court Act 1921 Q. and gave the rules the force of law.

Because O. 54 and O. 91 have made provision for the costs of all cases lawfully brought before the Supreme Court since 1876, s. 58 has had no scope for operation since that year. In so far as In re The Nash Election Petition; Grant v. Dunstan and Carney [28] suggests that s. 58 has scope for operation in cases brought before the Supreme Court of Queensland, it was wrongly decided. In Nash , the Full Court held [29] that s. 58 gave it power to make an order for the costs of an appeal brought under s. 118 of the Elections Act 1915 Q.. However, their Honours appear to have overlooked that the appeal was a proceeding lawfully brought before the Court within the meaning of s. 58 and that that section did not apply.

1. [1952] St. R. Qd. 53. 2. ibid., at pp. 77-78.

It follows that the Full Court erred in the present case in concluding that s. 58 authorized the making of the orders for costs against the appellants. That section has no scope for operation while O. 91, r. 1 remains in its present form.

Order 91, r. 1 does not authorize the making of an order against a person who is not a party to proceedings in the Court. Apart from a dictum of Lord Denman in Reg. v. Greene [30] to which I will refer, the course of authority at common law was uniformly to the effect that the courts had no general authority to order non-parties to pay the costs of the action except in the case of ejectment. Thus, the courts of common law had no discretionary power to make a person who was not a party on the record pay the costs of the action even though he or she was the real party to the proceedings [31] . In Hayward , Lord Abinger C.B., with whose judgment Parke B. concurred, explained the reason for this rule [32] :

But the authority of the Courts at Westminster is derived from the Queen's Writ, directing them to take cognizance of the suits mentioned in the writs respectively, and thus bringing the parties before them. This being so, they have no power to order any particular individual to come before them at their pleasure. Exceptionally, the Court of King's Bench had jurisdiction to order the real party in ejectment proceedings to pay the costs [33] . In Mobbs [34] , Blackburn J. said that in: ordinary cases, where there has been no abuse of its process, the Court has no jurisdiction to order a person not a party on the record to pay costs. But the action of ejectment was an anomaly. In Hutchinson , Lord Campbell C.J. expressed the view that even the jurisdiction to order costs against non-parties in ejectment actions arose out of the power of the court to protect its process against abuse. He said [35] : The principle is that the individuals who order an appearance to be entered in ejectment, in the names of those not really defending the suit, abuse our process, and that, as they substantially are the suitors, we have jurisdiction to make them pay the costs. The courts also had jurisdiction to order a person to pay costs if the Attorney-General had proceeded "at the relation of" that person. Although the relator was not a party to the proceedings, the relator's name was inserted in the proceedings as a matter of practice so that that person could be made liable for costs [36] . 1. (1843) 4 Q.B. 646 [114 E.R. 1042]. 2. Hayward v. Giffard (1838), 4 M. & W. 194 [150 E.R. 1399]; Evans v. Rees (1842), 2 Q.B. 334 [114 E.R. 131]; Ram Coomar Coondoo v. Chunder Canto Mookerjee (1876), 2 App. Cas. 186; Coffee Tavern Co. v. De Young (1880), 6 V.L.R., L. 289; Calder v. Slattery (1885), 2 W.N. (N.S.W.) 38. 3. (1838) 4 M. & W., at p. 196 [150 E.R., at p. 1400]. 4. Doe dem. Masters v. Gray (1830), 10 B. & C. 615 [109 E.R. 579]; Hutchinson v. Greenwood (1854), 4 El. & Bl. 324 [119 E.R. 125]; Mobbs v. Vandenbrande (1864), 33 L.J.Q.B. 177. 5. ibid., at p. 180. See also Hayward v. Giffard (1838), 4 M. & W., at pp. 196-197 [150 E.R., at p. 1400]; Evans v. Rees (1842), 2 Q.B., at p. 340 [114 E.R., at p. 133]. 6. (1854) 4 El. & Bl., at p. 326 [119 E.R., at p. 126]. 7. Attorney-General v. Logan , [1891] 2 Q.B. 100, at p. 106.

In Chancery, the general rule was the same as in the common law courts: only a party would be ordered to pay the costs of the suit. Thus, where a suit was instituted by a class of persons on behalf of others, only the individuals of the class who were parties on the record were liable for the defendant's costs [37] . However, the Court of Chancery had a well-established rule of practice called "the rule as to the three A's" under which an attorney, agent or arbitrator who had been a "party to a fraud from which he got no benefit was liable to be made a defendant with the view of making him liable to the payment of the costs in case the principal defendant was unable to pay them" [38] . This rule continued to be applied after the Judicature Acts [39] . In Chancery, as in the common law courts, relators [40] could also be ordered to pay costs although not strictly parties to the proceedings.

1. Scott v. Pascall (1847), 2 Ph. 390 [41 E.R. 993]. 2. Mathias v. Yetts (1882), 46 L.T. 497, at p. 502. 3. Daniell's Chancery Practice, 8th ed. (1914), vol. 1, pp. 205-206. 4. Attorney-General v. Logan.

Under their summary jurisdiction, however, the Courts of Common Law and Chancery had jurisdiction to make an order for costs against a non-party if there had been "an abuse of process" or a contempt or if an attorney had been guilty of professional misconduct in relation to the litigation. In Ram Coomar Coondoo [41] , the Judicial Committee of the Privy Council said:

The instances in which persons other than parties to the suit have been held liable to costs in England, have been principally those of solicitors, over whom the Court exercises disciplinary jurisdiction, as in the case of In re Jones [42] . The Courts have also ordered the real parties to pay the costs in actions of ejectment, originally on the ground that that action was in form a fictitious proceeding, and having once assumed this power they have continued to exercise it in the actions substituted for that of ejectment. Again, the Courts, it has been said, would so interfere in case of any contempt or abuse of their proceedings: see Hayward v. Giffard [43] . But all these cases relate to applications either in the cause itself, or to the summary jurisdiction of the Court. Further, the courts had jurisdiction to order a next friend to pay costs if he or she purported to institute proceedings on behalf of a person on the ground that the person was of unsound mind and it turned out that that person was of sound mind [1] . Such a case "is the same as the more ordinary case of a person coming to inform the Court that a solicitor has abused its process by filing a bill in his name without authority" [2] . But unless the case came within one of the above categories, the remedy where the opposite party on the record was not the real litigant was to have the action stayed until the real party gave security for costs [3] . 1. (1876) 2 App. Cas., at p. 212. 2. (1870) L.R. 6 Ch. 497. 3. (1838) 4 M. & W. 194 [150 E.R. 1399]. 4. See Palmer v. Walesby (1868), L.R. 3 Ch. 732. 5. ibid., at p. 735. 6. See Tenant v. Brown (1826), 5 B. & C. 208 [108 E.R. 78]; Hearsey v. Pechell (1839), 5 Bing. (N.C.) 466 [132 E.R. 1179].

Moreover, in the absence of malice and want of probable cause, an action for the amount of costs incurred by a party to litigation could not be maintained against a person not a party to that litigation on the ground that he or she was the mover of and had an interest in the litigation [4] . In Ram Coomar Coondoo , Sir Montague E. Smith, giving the advice of the Judicial Committee, said [5] :

Interminable questions would arise as to the degree of meddling and assistance which would create the liability. So far as precedents exist, it is either in the original suit itself, or by the exercise of the summary jurisdiction of the Courts, that any such liability has been enforced. It is ordinary practice, if the Plaintiff is suing for another, to require security for costs, and to stay the proceedings until it is given. 1. Ram Coomar Coondoo v. Chunder Canto Mookerjee. 2. ibid., at p. 211.

A dictum of Lord Denman C.J. in Greene , however, suggests that the jurisdiction to order costs against non-parties is wider than the above statements of Blackburn J. and Lord Abinger C.B. would suggest. Lord Denman C.J. said [6] :

We take the true rule to be that the Court may adjudge from all circumstances who is the party, and give costs against any party, or against an attorney, if the affidavit of the person sought to be charged, or any affidavit produced by an attorney, shews good ground for imposing them upon them respectively. But, if the claim for costs should arise from the affidavits produced in answer, there must be a special application. In the present case costs are asked in respect of the statements made in opposition to the rule. The court held an order for costs could not be made in that case without a special application. After the costs were taxed, a rule was obtained calling on Simpson, the applicant's attorney, to show cause why he should not pay the amount of the taxed costs to the defendant. The court held that Simpson was liable for the costs. Lord Denman C.J. said [7] : The question is, whether a person who, on a motion for a quo warranto information, acts as an attorney, is on that account to avoid payment of costs, when he has, in fact, been the relator, but has put forward another person in that capacity, who is unable to pay costs. I have no doubt that he is liable, where it appears that he is actually and virtually a relator. It was not necessary in this case that the defendant should have made an application for the costs to Simpson, which, it may be supposed, would only have met with defiance. The ground of the decision, therefore, was narrower than the earlier dictum of Lord Denman C.J. in the same case. Simpson seems to have been held liable on the basis that he acted as attorney on the motion and was the real relator. It was well established that the court had power to order a solicitor to pay the costs of the proceedings if he had been guilty of professional misconduct in respect of the proceedings. In Myers v. Elman [8] , Lord Wright pointed out: But alongside the jurisdiction to strike off the Roll or to suspend, there existed in the Court the jurisdiction to punish a solicitor or attorney by ordering him to pay costs, sometimes the costs of his own client, sometimes those of the opposite party, sometimes, it may be, of both. The ground of such an order was that the solicitor had been guilty of professional misconduct (as it is generally called) not, however, of so serious a character as to justify striking him off the Roll or suspending him. This was a summary jurisdiction exercised by the Court which had tried the case in the course of which the misconduct was committed It was a summary jurisdiction, in which the intervention of the judge was invoked at the conclusion of the case either by motion in the Chancery Court or by a motion or application for a rule in the Courts of Common Law. 1. (1843) 4 Q.B., at p. 650 [114 E.R., at p. 1044]. 2. ibid., at pp. 652-653 [pp. 1044-1045]. 3. [1940] A.C. 282, at p. 318.

Prior to the passing of the Judicature Act 1876, it is tolerably clear that the Supreme Court had no jurisdiction to order a non-party to pay the costs of an action in that Court unless the action was in ejectment or the circumstances of the case called for the exercise of the summary jurisdiction. Moreover, the enactment of O. 54, r. 1 by the Judicature Act 1876 did not extend the jurisdiction of the Supreme Court of Queensland to order the payment of costs [9] . In Mills , commissioners had been incorporated under a statute for the purpose of acquiring lands and carrying out public works thereon. A special statute also gave them power to acquire land for the purpose of constructing a new street. Neither statute contained any provision for payment of the costs of applications for payment out of purchase moneys paid into court in respect of lands acquired under the statutes. The Court of Appeal (Chancery Division) unanimously held that the court had no jurisdiction under the equivalent of O. 54, r. 1 Q. to order the commissioners to pay the costs of the application. The Court followed Re Foster v. Great Western Railway Co. [10] . Fry L.J. said [11] that that case had decided "that the jurisdiction was confined to cases in respect to which, according to the existing law, there was jurisdiction as to costs".

1. In re Mills' Estate; Ex parte Commissioner of Works and Public Buildings (1886), 34 Ch. D. 24. 2. (1882) 8 Q.B.D. 515. 3. Mills (1886), 34 Ch. D., at pp. 42-43.

On the common law side, it was also recognized that the Rules enacted as part of the Judicature Acts had not extended the jurisdiction of the Court to order costs. Thus, the 13th edition of Archbold's Practice published in 1879 stated [12] :

In general, the Court have [sic] no power to order a person who is not a party to an action to pay the costs of it, although he be the real party interested. Hayward and Evans were among the cases cited in support of this proposition. 1. vol. 1, p. 458.

Section 5 of the Supreme Court of Judicature Act 1890 U.K.

In England, the jurisdictional deficiency in the rules exposed in Mills was overcome by enacting s. 5 of the Supreme Court of Judicature Act 1890 (53 & 54 Vict. c. 44). The terms of s. 5 were copied in other jurisdictions including New Zealand, Victoria and Ontario. That section substantially followed the words of O. 91, r. 1 but concluded with the words "and the court or judge shall have full power to determine by whom and to what extent such costs are to be paid". In In re Fisher [13] , the Court of Appeal held that s. 5 authorized the Court to order a public body to pay the costs of and incidental to a petition for payment out of court of moneys payable in respect of land compulsorily acquired.

Nevertheless, the effect of the case law until 1986 was that a court did not have power to order a person who was not a party to an action to pay the costs of that action except in a case where an order for the consolidation of that action with another action had been made [14] . The basis of this interpretation of s. 5 and its progeny was explained in Forbes-Smith [15] by Collins L.J. After referring to s. 5 of the Supreme Court of Judicature Act 1890, his Lordship said:

Some limitation must be put upon the generality of the words. They cannot enable the Court to order the costs to be paid by a stranger to the proceedings; they can only mean that the Court may order the costs to be paid by any of the parties. This view prevailed until Aiden Shipping Ltd v. Interbulk Ltd. [16] where the dictum of Collins L.J. was rejected and John Fairfax & Sons overruled. In Aiden, the House of Lords held that s. 51(1) of the Supreme Court Act 1981 U.K., which was relevantly in the same terms as s. 5 of the Supreme Court of Judicature Act, authorized the making of an order for costs against a person who was not a party to the action. Lord Goff of Chieveley said [17] that it was important to remember that s. 51(1) was concerned with the jurisdiction of the Court to make orders as to costs and that the jurisdiction was expressed to be subject to rules of court. His Lordship went on to say [18] : The subsection simply provides that "the court shall have full power to determine by whom the costs are to be paid." Such a provision is consistent with a policy under which jurisdiction to exercise the relevant discretionary power is expressed in wide terms, thus ensuring that the Court has, so far as possible, freedom of action, leaving it to the rule-making authority to control the exercise of discretion (if it thinks it right to do so) by the making of rules of court, and to the appellate courts to establish principles upon which the discretionary power may, within the framework of the statute and the applicable rules of court, be exercised. Such a policy appears to me, I must confess, to be entirely sensible. It comes therefore as something of a surprise to discover that it has been suggested that any limitation should be held to be implied into the statutory provision which confers the relevant jurisdiction. 1. Forbes-Smith v. Forbes-Smith , [1901] P. 258; John Fairfax & Sons Pty. Ltd. v. E. C. De Witt & Co. (Australia) Pty. Ltd. , [1958] 1 Q.B. 323; Allman v. Daly [No. 2] , [1959] V.R. 614; Rockwell Developments Ltd. v. Newtonbrook Plaza Ltd. (1972), 27 D.L.R. (3d) 651; Alexanian v. Dolinski (1973), 43 D.L.R. (3d) 649; A. v. S. , [1982] 1 N.Z.L.R. 726; Australian Guarantee Corporation Ltd. v. De Jager , [1984] V.R. 483. 2. [1901] P., at p. 271. 3. [1986] A.C. 965, at pp. 981-982. 4. ibid., at p. 975. 5. (1933) 48 C.L.R. 677, at p. 681.

Order 91, r. 1, however, does not confer jurisdiction on the Supreme Court to determine "by whom" costs shall be paid. Queensland has not enacted any provision similar to that of s. 5 of the Supreme Court of Judicature Act 1890 U.K.. Nor does O. 91, r. 1 expressly authorize the Court to order a non-party to an action to pay the costs of that action. If O. 91, r. 1 authorizes such an order, it is because the conferring of a discretion on the Court or Judge does so by implication. But an enactment should not be construed as authorizing the imposition of a legal liability on a person in the absence of clear words or a settled course of authority on an enactment in similar terms. In Woolf v. Snipe [18] , Dixon J. said that "Rules of Court ought not to be construed as enlarging or conferring jurisdiction or affecting substantive rights."

Prior to the Judicature Act 1876, the law of Queensland did not confer power on the Supreme Court to order a non-party to pay the costs of an action in that Court except under the summary jurisdiction or in an action of ejectment. The language of O. 91, r. 1 does not evince an intention to change the pre-Judicature Act position. When an action is brought in the Supreme Court by one person against another, the duty of the Court is to settle the dispute which has arisen between them after "an inquiry concerning the law as it is and the facts as they are, followed by an application of the law as determined to the facts as determined" [19] . The function of O. 91, r. 1 is to provide for the disposition of the costs which the parties to such an action in the Court have incurred. In that setting, the discretion which O. 91, r. 1 confers on the "Court or Judge" is naturally read as a discretion to be exercised between the parties.

1. Reg. v. Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty. Ltd. (1970), 123 C.L.R. 361, at p. 374.

The language of the rule provides little reason for concluding that one of its purposes is to confer jurisdiction to impose obligations on persons who are not parties to actions in the Supreme Court. Not only is there no reference to the person "by whom" the costs should be paid, as there was in s. 5 of the Supreme Court of Judicature Act 1890, but the rule provides no machinery for enabling a non-party to be brought before the Court for the purpose of determining his or her liability for the costs of the action. I am unable, therefore, to accept the proposition that under O. 91, r. 1, the Supreme Court has jurisdiction to order a complete stranger to the record to pay the costs of the proceedings but that, in the sound exercise of its discretion, the Court will only make such an order when the stranger has some connexion with the record. Counsel for the respondent boldly contended that the Court had jurisdiction to make any person in the court room pay the costs of the proceedings, but he said that "the manner of exercise" of the jurisdiction was "another question". If a court never has a discretion to make an order, however, it has no jurisdiction to make that order. A "jurisdiction" which can never be exercised is not a jurisdiction at all. The extent of the Court's jurisdiction to order costs and the extent of the discretion which is theoretically available to it in any case must be one and the same. To hold that O. 91, r. 1 is confined to making orders against the parties to the action is not to read down the words of that sub-rule. It is simply to give the sub-rule its ordinary and natural meaning in the context of its application to proceedings brought before the Supreme Court of Queensland.

Order 91, r. 1 should be read as confined to the making of orders against parties. Unless the orders the subject of this appeal were authorized under the summary jurisdiction of the Supreme Court, they were outside the jurisdiction of that Court.

The orders made in the present case do not fall within any of the established categories of orders made in the exercise of the summary jurisdiction. Nor is the present case sufficiently analogous to the established categories to bring it within the scope of the summary jurisdiction. Although the appellants, acting on behalf of the two banks, were the instigators of the action by Forest and of the defence by Howe, those two companies were not nominal parties to the action and counterclaim. If Forest had obtained judgment against the respondents, the proceeds of that judgment would have been the property of Forest. That the banks had an equitable interest in the assets of Forest is not a reason for concluding that Forest was not the real party bringing the action. Similarly, a successful defence by Howe of the counterclaim would protect Howe's assets even though the banks had an equitable interest in those assets.

In any event, it was the appellants, and not the banks, who were ordered to pay the costs in the present case. In instituting and defending the various proceedings, the appellants were the agents of the companies [20] . In principle, the actions of the appellants cannot be distinguished from those of the directors of a company who bring or defend an action on its behalf. If, under the summary jurisdiction, the Supreme Court could order the appellants to pay the costs of this action, it must follow that the Supreme Court has jurisdiction to order the payment of costs by the directors of any company which commences or defends an action in that Court.

As a matter of policy, provision for security for costs is a better remedy for protecting persons involved in litigation with insolvent companies than ordering a receiver to pay the costs of litigation after verdict. Public policy does not preclude an insolvent company from bringing or defending an action. Where it does so, the ordinary remedy is to stay the action until security for costs is provided. If adequate security is sought and provided, no question of ordering a third party to pay the costs ought to arise. If a party does not seek adequate security for costs, after a receiver has been appointed, it is difficult to see how that party can justly complain that the receiver ought to pay those costs after the litigation has been completed. Furthermore, applications for security "should be made promptly and before significant expense is incurred" by the company [21] . It would be an odd result if, in the exercise of the Court's discretion, an application made before trial to provide security for costs was refused on the ground of delay but the court could make an order for costs against the receiver after verdict.

1. See Devenish v. Jewel Food Stores Pty. Ltd. (1990), 64 A.L.J.R. 533, at p. 534; 94 A.L.R. 664, at p. 666.

Neither in principle nor in policy is there sufficient ground to include receivers as persons who fall within the summary jurisdiction of the court to order a non-party to pay the costs of an action heard in that court. The appeal should be allowed.