Renshaw v New South Wales Lotteries Corporation Pty Ltd

General Principles

As to the principles applicable in that respect I refer to my judgment in Moseley v AB (No 2) [2017] NSWSC 1812 at [65]-[79], extracted below: [65] The court's primary task is to determine whether the facts of the case or specific costs provisions impact upon the court's jurisdiction to make costs orders. Unless there are statutory provisions to the contrary, the court's discretion to determine such issues is unfettered: Civil Procedure Act 2005 s 98(1) (extracted above at [59]). [66] The central and overriding principle in this regard is that of doing justice to the parties in each particular case. This involves a heavily contextual assessment that focuses upon the conduct of the litigation itself. A discretion exercised on grounds unconnected with the litigation, or on no grounds at all, is arbitrary or capricious rather than fair or just (see Peters v Peters (1907) 7 SR (NSW) 398 at 399 (per Street J); Cretazzo v Lombardi (1975) 13 SASR 4 at 11 (per Bray CJ); Scharer v Counting Instruments Ltd [1986] 1 WLR 615 at 621 (per Buckley LJ). [67] The discretion must be exercised judicially and "according to rules of reason and justice, not according to private opinion … or even benevolence … or sympathy": Williams v Lewer [1974] 2 NSWLR 91 at 95. [68] This discretion may be exercised whenever the circumstances warrant, having regard to the scope and purpose of the s 98 of the Civil Procedure Act: Oshlack v Richmond River Council (1998) 193 CLR 72; Hamod v State of NSW [2011] NSWCA 375 at [813]. However, the discretion must be exercised on a principled basis (see Smith v Sydney West Area Health Service (No 2) [2009] NSWCA 62 at [11]), and in accordance with the principles of proportionality: Civil Procedure Act s 60. [69] In Oshlack v Richmond River Council, McHugh J observed the discretion, whilst unfettered, is not to be applied without guidance or qualification (at [65]-[67]): The discretion must be exercised judicially [65] Although the statutory discretion is broadly stated, it is not unqualified. It clearly cannot be exercised capriciously. Importantly, the discretion must be exercised judicially in accordance with established principle and factors directly connected with the litigation. In this manner, the law has gradually developed principles to guide the proper exercise of the discretion and, in some cases, to highlight extraneous considerations which, if taken into account, will cause the exercise of the discretion to miscarry. Consistent with the aim of justice, the law could not have developed otherwise. As Mason CJ said in Latoudis it does not follow that any attempt to formulate a principle or a guideline according to which the discretion should be exercised would constitute a fetter upon the discretion not intended by the legislature. Indeed, a refusal to formulate a principle or guideline can only lead to exercises of discretion which are seen to be inconsistent, a result which would not have been contemplated by the legislature with any degree of equanimity. [66] By far the most important factor which courts have viewed as guiding the exercise of the costs discretion is the result of the litigation. A successful litigant is generally entitled to an award of costs. As Devlin J said in Smeaton Hanscomb & Co Ltd v Sassoon I Setty, Son & Co (No 2), when setting aside an arbitrator's costs award: the arbitrator is not directing his mind to one of the most, if not the most, important of the elements which ought to affect his discretion, namely the result of the case. Prima facie, a successful party is entitled to his costs. To deprive him of his costs or to require him to pay a part of the costs of the other side is an exceptional measure. The combined force of the sentiments recognised above by Mason CJ, regarding the need for consistency in order to avoid injustice, and by Devlin J, regarding the most significant factor affecting the costs discretion, provides the jurisprudential basis for the important principle commonly referred to as the "usual order as to costs". The usual order as to costs [67] The expression the "usual order as to costs" embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation. [70] Equally, the "general rule" (or "usual order as to costs") does not amount to a fetter on the court's discretion. The terms of r 42.1, "unless it appears to the court that some other order should be made", clearly envisage that the court may, in its discretion, make a costs order other than one following the event. [71] The most common circumstance in which the general rule may be displaced is evidence of disentitling conduct on the part of the successful party: Oshlack v Richmond River Council at [40] and [69]; G R Vaughan (Holdings) Pty Ltd v Vogt [2006] NSWCA 263. The disentitling conduct does not necessarily need to amount to misconduct; it may simply be any conduct "calculated to occasion unnecessary expense": Lollis v Loulatzis (No 2) [2008] VSC 35 at [29]; Keddie v Foxall [1955] VLR 320 at 323-4. [72] In Commonwealth of Australia v Gretton [2008] NSWCA 117, Hodgson JA addressed the principles of fairness underlying the making of a costs order, which may at times warrant departure from the general rule (at [121]): [121] In my opinion, underlying both the general rule that costs follow the event, and the qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the court considers to be the responsibility of each party for the incurring of the costs. Costs follow the event generally because, if a plaintiff wins, the incurring of costs was the defendant's responsibility because the plaintiff was caused to incur costs by the defendant's failure otherwise to accord to the plaintiff that to which the plaintiff was entitled; while if a defendant wins, the defendant was caused to incur costs in resisting a claim for something to which the plaintiff was not entitled: cf Ohn v Walton (1995) 36 NSWLR 77 at 79 per Gleeson CJ. Departures from the general rule that costs follow the event are broadly based on a similar approach. [73] Further factors identified as relevant to informing judicial discretion were identified in Tomanovic v Global Mortgage Equity Corporation Pty Ltd (No 2) [2011] NSWCA 256 at [97]-[98] (per Campbell JA) (see also, Oshlack v Richmond River Council at [69] (McHugh J); and Ritter v Godfrey [1920] 2 KB 47). They include, but are not limited to, the following: (1) whether the successful party effectively invited the litigation; (2) whether the successful party unnecessarily protracted the proceedings (3) whether the successful party succeeded on a point not argued before a lower court; (4) whether the successful party prosecuted the matter solely for the purpose of increasing the costs recoverable; and (5) whether the successful party had obtained relief which the unsuccessful party had already offered in settlement of the dispute. [74] The onus lies on the losing party to establish a basis for any departure from the general rule: Waterman v Gerling (Costs) [2005] NSWSC 1111 at [10]. Only in an exceptional case would a successful party both be deprived of costs and also ordered to pay the opponent's costs: Arian v Nguyen (2001) 33 MVR 37. [75] The fact that the proceedings involve some public interest aspect does not, of itself, necessarily warrant departure from the general rule that costs follow the event: Oshlack v Richmond River Council at [90] (McHugh J); Re Kerry (No 2) [2012] NSWCA 194 at [13], [15]; CSR Ltd v Eddy (2005) 226 CLR 1. [76] Where there is a divergence of authority on a particular issue, this may be a factor, but in Rinehart v Welker (No 3) [2012] NSWCA 228 the importance of the subject matter did not provide a basis for refusing costs to the successful party in private litigation (at [15]). [77] The Court should, however, have careful regard to the facts of the case: EKO Investments Pty Limited v Austruc Constructions Ltd [2009] NSWSC 371 at [18]-[23]; Knight v Clifton [1971] Ch 700 at 725. [78] Additionally, in a case where there are multiple issues litigated, the Court may, in the exercise of its discretion, order that a successful party have only part of its costs. It may be appropriate to order that a successful party be deprived of costs or a portion of the costs if the matters upon which that party is unsuccessful took up a significant part of the trial, either by way of evidence or argument: see Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24]. [79] The appropriate starting point, nonetheless, remains the presumption under r 42.1, and the enquiry then becomes whether in the exercise of the court's discretion, the presumption should be displaced, or whether some other order is to be preferred.

Consideration

The defendants are correct to submit that they were substantially successful on the motion and a substantial proportion of the evidence in the matter concerned an important question on the contractual claim and whether the plaintiff was able to extend time by reason of any disability (and the Court ultimately decided in favour of the defendants with respect to those issues).
The evidentiary costs were substantially directed by the defendants' at matters on which succeeded, including the affidavit of Mr McNamara of 17 October 2017 and 17 January 2018, which dealt with the process of purchasing and recording ticket entries, the need to ensure the confidentiality and whether there was a record of any winning ticket on the date and time period that the plaintiff claimed to have purchased a winning ticket. They responded to the plaintiff's affidavits insofar as they asserted the availability of records to prove his claim. I also accept the submission of the defendants that, although not read on the motion, the defendants' affidavits were necessary in all the circumstances for those purposes and because of the plaintiff's various notices to produce seeking records including the winning ticket itself.
I also accept submissions that costs were incurred as a result of the plaintiff reconstituting his claim, a hearing date being abandoned and the need for various directions hearings arising from the plaintiff's conduct of the proceedings.
However, the defendants were unsuccessful in respect of the plaintiff's claims under the Fair Trading Act 1987 (NSW) and the Trade Practices Act 1974 (Cth).
It is true, as the defendants submitted, that these claims are subject to a limitation defence and there appeared to be an absence of pleading in that respect. Nonetheless, the judgment of the Court, with respect to those claims, was as follows in Renshaw No 1 (at [222]): [222] … the defendants have not demonstrated why the claim for misleading and deceptive conduct disclosed no reasonable cause of action per se pursuant to r 14.28(a) of the UCPR. The limitation periods in s 82 of the TPA and s 68 of the FTA do not extinguish the cause of action because, like the Victorian Act (s 5(1A) was not in the exact same terms but was in substance to the same effect), the provisions operate to bar the remedy but leave the underlying cause of action unimpaired: see Mewett at 104. The defendants' failure to frame the strike out application as an abuse of process means that the pleadings should not be struck out notwithstanding the defendant's limitation defence.
The culmination of those considerations and one which will do justice to the parties is an award apportioning costs having regard to the lack of success, in small part, by the defendants. The defendant shall have 80% of their costs of and incidental to the motion, including the costs of the affidavits of Mr McNamara.
As to the costs of any amended claim, the defendants filed a defence to the first amended statement of claim. This included defences to the claims in contract, negligence, trust and restitution. A new defence will be required to be filed that pleads only to the misleading or deceptive conduct claim. It is appropriate that a party seeking to or required to amend pays the costs thrown away by the other party arising from such amendment.

At a glance

Court

Decision date

Before

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Judgment (7 paragraphs)

Parties

Legislation Cited (6)

Cases Cited (18)