(3) Where the defendant has done some wrongful act in the course of the transaction of which the plaintiff complains.
12 Lord Atkinson in the Donald Campbell case at 815 basing himself on Bostock v Ramsey Urban District Council [1900] 2 QB 616, points out that the Judge must consider the whole of the circumstances of the case and everything which led to the action and that a good cause for depriving the defendant of costs is not confined to a cause founded upon the conduct of the successful party in the course of the litigation.
13 In Verna Trading Pty Ltd v New India Assurance Co Ltd [1991] 1 VR 129, 152 and following, Kaye J, in giving the leading judgment in the Full Court analysed the cases. At 154 his Honour made it clear that whilst special circumstances are required both to deprive a successful defendant of costs, even more compelling circumstances are required for the exercise of the discretion as a result of which a successful defendant is compelled to pay part or all of the plaintiff's costs. Generally speaking, the Victorian court approved the guidelines in Ritter v Godfrey.
14 In Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, 233, Sheppard J, when a member of the Federal Court, whilst recognising that the discretion was unlimited, gave illustrations from the decided cases as to when the discretion had been exercised in the unsuccessful party's favour. Without noting the case named, I quote:
"I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud … evidence of particular misconduct that causes loss of time to the Court and to other parties … the fact that the proceedings were commenced or continued for some ulterior motive … or in wilful disregard of known facts or clearly established law … the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions … an imprudent refusal of an offer of compromise."
15 The Colgate-Palmolive case is one involving indemnity costs, but the general principles are much the same.
16 A recent instance in which costs were denied a successful party is to be found in MLC Insurance Ltd v FAI Traders Insurance Co Ltd (1994) 49 FCR 23, where, as is disclosed at p 39, counsel for FAI persisted with issues in cross examination for four days before he announced to the Court that following an interview with an employee of FAI which had taken place during lunch on the fourth day, that question would not be pursued. The Full Court upheld the trial judge's decision not to allow costs.
17 It should be noted that in the present case the conduct of the fifth defendant in fabricating the documents did not induce the plaintiff to believe that there was a good case when there was not one, nor did it goad the plaintiff into litigation in which he would never have embarked but for the misconduct (using the words of Eve J in Ritter v Godfrey [1920] 2 KB 47, 66). Nor was the case one where the act of the defendant occasioned unnecessary litigation or expense in the way in which the trial was conducted. The material was material which would have affected Mr Costa's credit in any event. Accordingly, it would only be if the matter came within the class mapped out by Atkin LJ as "some wrongful act in the course of the transaction of which the plaintiff complains". This category has never been fully explored. However, the Court looks for something which is close to the cause of action sued upon or the transaction flowing from which the cause of action arises. General amoral behaviour of a party is no reason to deprive that party of costs. Indeed, even if the facts on which the cause of action are based show that the defendant is not "a decent chap", this again is no reason to deprive a successful defendant of his costs. The conduct must be intimately connected with the reason why the litigation was brought or lasted as long as it did or as one might colloquially say "in that ball park".
18 Although I have generally resisted looking at earlier cases, it is probably of value to note King & Co v Gillard & Co [1905] 2 Ch 7, where, in a passing off suit, Kekewich J gave judgment for the defendant, but refused to order the plaintiffs to pay the defendants' costs on the ground that the defendants had indicated that their goods had obtained certain medals and awards at exhibitions which were false. This matter was not connected with the issue between the plaintiffs and the defendants. The Court of Appeal held that the improper conduct, assuming it to be so, was not connected with the issue between the plaintiff and the defendant and was not material which could be used to exercise the Judge's discretion to deprive the successful party of costs.
19 I am not at all happy that a solicitor of this Court would fabricate a document in the sense of dating it a date it could not bear, and then persisting with evidence that it must have been prepared on the date it bore. Clearly, one document could not have been prepared on the date it carried. This conduct was exacerbated by the continued assertion of the document's validity and also, to a lesser extent, by the continued assertion that the solicitor and Mr Rafidi had independently prepared identical affidavits.
20 However, it does seem to me that, bearing in mind the general guidelines outlined in the cases which I have digested, the conduct is too collateral to the cause of action between the plaintiff and the fifth defendant.
21 Accordingly, in my view, the ordinary order must follow and the plaintiff must pay the fifth defendant's costs.
22 I should note that no argument has been directed to me as to the appropriateness of the defendants who were represented by three sets of solicitors and counsel being separately represented. Presumably, this is a matter which the costs assessor will have regard to when considering any disputed bill of costs.
23 I note that the outstanding matters in the proceedings will be considered by me on 22 July 2003.