Kruger v Thompson

It was quite unheard of, in Courts where the practice of several taxations prevailed, that the mere chance of the litigant obtaining costs upon a decision at some subsequent stage of the case was to prevent his paying the costs already ordered to be paid under a separate judgment. Certainly no such rule ever existed in the old Court of Chancery and no such practice has been established under the Judicature Act; it does not seem to me that we ought to establish any such practice and that part of the application ought to fail.

1. Regard to these and other authorities demonstrates that there is no common approach to making a stay order in the present circumstances: see also Apostolidis v Kalenik [2010] VSCA 80; (2010) 24 VR 726; and Re Torbeckin Pty Ltd (in liq) (Stay) [2025] VSC 234. Rather, the discretion whether to grant a stay of enforcement of a cost order where there is impecuniosity of the party with the benefit of the cost order plus the possibility that there may be some further order as between the parties which may allow for a set-off is one which must be exercised in the particular circumstances of each case.
2. In the present case, Ms Kruger has been burdened with having to bring an appeal. The respondents chose to seek to support the reasoning of the primary judge. The fruits of success in that appeal include the benefit of the costs order. In the conduct of the appeal, the respondents did not seek to question the adverse credibility findings as to the account given by Mr Thompson. The appeal has been upheld on the basis that there were a number of material errors by the primary judge in assessing Ms Kruger's account. There is no indication as to when the retrial will occur. There is only the possibility that a costs order may be obtained by the respondents on the retrial. In the particular circumstances of the present case, there is a matter that bears upon assessing the prospect of that possibility becoming actuality, namely the fact that one member of this Court has found that Ms Kruger's allegations of breach should be upheld on appeal. Obviously, that conclusion is not determinative in any way. Nevertheless, it is a matter that takes the present case out of what might be said to be the ordinary case where there is no indication one way or the other as to the likelihood of a future order being obtained on the retrial that may be the basis for a set-off.
3. Having regard to those circumstances, we are not persuaded that there should be some form of stay of the order as to the costs of the appeal.
4. As to whether there should be a certificate under the Federal Proceedings (Costs) Act, the statutory discretion arises where an appeal has succeeded on a 'question of law'. As to that formulation, it has been held that a statutory right of appeal 'on a question of law' from the Administrative Appeals Tribunal is confined to an alleged departure from the legal requirements as to the way in which the fact-finding task must be undertaken. It does not extend to allowing an inquiry that would usurp the fact-finding function of the Tribunal. As to these distinctions, see Haritos v Federal Commissioner of Taxation [2015] FCAFC 92; (2015) 233 FCR 315 at [194] (Allsop CJ, Kenny, Besanko, Robertson and Mortimer JJ).
5. Significantly for present purposes, the right of appeal available to Ms Kruger was not so confined. She was entitled to bring an appeal on the ground of alleged error of fact by the primary judge, and did so. Consequently, in determining the appeal, it was not necessary to reach a conclusion as to whether the errors that were upheld were errors on a question of law or on a question of fact.
6. In some instances, a question as to whether there has been an error in fact-finding may be properly characterised as a question of law. For example, whether a factual finding was made without any evidence is often characterised as a question of law. On the other hand, whether there is sufficient evidence to support a factual finding is not a question of law. Aspects of the errors as to fact-finding that we have upheld might be said to have lacked any factual foundation. However, for the most part, the appeal invited the Full Court to determine that there were errors as to the factual reasoning undertaken by the primary judge.
7. Ultimately, even assuming that there were aspects of the contentions of Ms Kruger that were upheld that could be said to amount to success on a question of law, we are not persuaded that the statutory discretion should be exercised in favour of granting a certificate in the present case. In our view, significant aspects of the appeal did not raise a question of law. Rather, they alleged plain factual error. Further, there was no challenge to the adverse findings as to the credibility of the account given by Mr Thompson on which much of the case for the respondents depended. Therefore, there was no suggestion of an error in the approach to fact-finding that infected that aspect of the factual reasoning by the primary judge. In substance, the appeal was not allowed on the basis of error by the primary judge on a question of law.
8. As to the costs of the original trial, the usual order is that subject to any order of the judge conducting the hearing of the retrial, the costs of the original trial be costs in the retrial: Invisalign Australia Pty Ltd v SmileDirectClub LLC [2024] FCAFC 46 at [131] (O'Callaghan, Halley and Button JJ). An order in that form enables the judge conducting the retrial to take account of any aspect of the conduct of the retrial as a basis for modifying the order but otherwise requires the costs of the original trial and the costs of the retrial to be treated as the overall costs of conducting the proceedings which, in the usual course, will be met by the unsuccessful party. As no party suggested that there was some particular aspect of the way in which the original trial was conducted that would justify some different exercise of the discretion, there should be an order that subject to any order of the judge conducting the retrial, the costs of the original trial be costs in the retrial.

I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Colvin, Abraham and McElwaine.