State of New South Wales (Department of Education and Training and Department of Juvenile Justice) v Cahill

Appellant's submissions 8The appellant submitted it was entitled to an order in its favour for the costs it incurred both at first instance and on appeal in Matter 1392. The costs sought were party/party costs. 9The appellant summed up its submissions by putting that the costs awarded to it ought be greater than one third of the total costs incurred by it, as any order of that nature would not reflect the actual costs incurred. It was submitted that of the three prosecutions brought against the appellant the third matter, being Matter 1392, was by far the most consuming of time resources and, therefore, costs. 10The appellant submitted that somewhere in the region of between half to two thirds of the total costs of defending the three matters was devoted to and consumed by the successful defence of Matter 1392. The appellant accepted that it must bear the responsibility for costs relating to Matters 1390 and 1391. However, it contended that the respondent should bear responsibility for its (the appellant's) costs both at first instance and on appeal in Matter 1392. 11The appellant submitted that the appropriate cost orders would be: (i) the costs order made by Schmidt J in relation to matters IRC 1390, 1391 and 1392 of 2006 is quashed; (ii) in respect of both the trial at first instance and on appeal the respondent is to pay one half of the appellant's costs for all three matters; (iii) in respect of both the trial at first instance and on appeal the appellant is to pay one half of the respondent's costs for all three matters. The appellant is to be given credit for the $300,000 already paid to the respondent for its costs in accordance with the orders made by Boland J on 30 July 2009. 12The appellant, however, did not oppose the respondent's application for the costs of the adjournment application dealt with on the morning of the first day of the appeal. The application was refused.

Respondent's submissions 13For his part the respondent submitted there was no proper basis for an order of 50 per cent of costs to the appellant, whether the Full Bench applied: (a) matters of impression and evaluation; or (b) an issues based approach identified from the course of the evidence or the written submissions and the addresses. 14The respondent submitted the Full Bench should make the following orders as to costs: (i) The appellant shall pay the respondent's costs of the liability proceedings dealt with by Schmidt J in Cahill v State of New South Wales (Department of Education and Training and Department of Juvenile Justice) (No 2) [2008] NSWIRComm 246. Alternatively, the appellant shall pay 80% of the respondent's costs of the liability proceedings. (ii) The appellant shall pay the respondent's costs of the sentencing proceedings dealt with by Schmidt J in Cahill v State of New South Wales (Department of Education and Training and Department of Juvenile Justice) (No 3) [2009] NSWIRComm 97. (iii) The appellant shall pay 90% of the respondent's costs of the appeal in respect of the stay, hearing dates of 16, 17, 18, 19 August 2010 and all work incidental to those hearing dates (excluding preparing submissions in response to the appellant's adjournment application). (iv) The appellant shall pay the respondent's costs of the appeal in respect of the discrete issues of preparing submissions in response to the appellant's adjournment application, preparing the "Respondent's Submissions Re Matters Arising" filed 3 September 2010, the hearing on 14 October 2010 and the respondent's written submissions filed 17 January 2011. (v) No costs of the appeal to the appellant. Alternatively , the respondent shall pay 10% of the appellant's costs of the appeal in respect of the hearing dates of 16, 17, 18, 19 August 2010 and all work incidental to those hearing dates, but: (a) limited to the costs of not more than one solicitor on a hearing date; and (b) excluding any additional costs incurred by the appellant's choice of new senior counsel.

Relevant law 15There was no issue between the parties that the Full Bench has power to determine the question of costs in relation to summary proceedings. 16In ordinary circumstances, where a defendant has secured the dismissal of a criminal charge it would not be just and reasonable to deprive it of an order for costs: Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 per Mason CJ at 542. 17The general law position is that a successful party has a "reasonable expectation" of being awarded costs against the unsuccessful party: Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [67] and [134]. The purpose of an order for costs is to compensate the person in whose favour it is made and not to punish the person against whom the order is made: Oshlack per McHugh J at [67]; Allplastics Engineering Pty Ltd v Dornoch Ltd [2006] NSWCA 33 at [34], referring to Ohn v Walton (1995) 36 NSWLR 77 at 79 per Gleeson CJ. The discretion to award costs must be exercised judicially: Oshlack at [65]-[66] per McHugh J; Overton Investments Pty Ltd v The Minister administering the Environmental Planning and Assessment Act 1979 [2001] NSWCA 137 at [61]. 18The "usual approach", the "general position" or "ordinary" approach is that costs will "follow the event": Cretney v Director General, New South Wales Department of Education and Training (No 4) [2010] NSWIRComm 17 at [8]. 19The "event" for the purposes of the costs discretion is not limited to the determination of either the proceedings as a whole or of particular causes of action: Reid, Hewett & Company v Joseph [1918] AC 717; Williams v Stanley Jones & Co Ltd [1926] 2 KB 37; Jelbarts Pty Ltd v McDonald [1919] VLR 478. The "event" extends to any disputed question of fact or law and is not limited to "issues" in the technical sense: Forster v Farquhar [1893] 1 QB 564 at 569 per Bowen LJ; Hughes v Western Australian Cricket Association Inc (1986) ATPR 40-748 at 48, 136 pe r Toohey J; Cretazzo v Lombardi (1975) 13 SASR 4 at 12. 20Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed: Cretney at [8] citing Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 , citing State of New South Wales v Stanley [2007] NSWCA 330 at [18] per Hislop J (with whom Beazley and Tobias JJA agreed); Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38]; Bonic v Pacific General Securities Ltd [2009] NSWSC 1221 at [12]. 21Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed: Cretney at [8] citing Elite Protective Personnel at [6], citing Waters v P C Henderson (Aust) Pty Ltd (Court of Appeal, 6 July 1994, unreported). A separable issue can relate to "any disputed question of fact or law" before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter: Elite Protective Personnel at [9], citing James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [34]. 22It may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument: Cretney at [8] citing Elite Protective Personnel, citing Yazgi v Permanent Custodians Ltd (No 2) [2007] NSWCA 306 at [24] (see also Bostik and Bonic ). 23Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation: Cretney at [8] citing Elite Protective Personnel citing James v Surf Road Nominees Pty Ltd (No 2) , which in turn cited Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane Industries Pty Ltd (1993) 26 IPR 261 at 272 (see also Bostik and Bonic ). 24The juridical basis of the court's power to award costs is that the exercise of discretion must be based on fairness: Commonwealth of Australia v Gretton [2008] NSWCA 117 at [85] and [121]. See also Oshlack per McHugh J at [67]; Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107.

Consideration 25In the present proceedings, at first instance the appellant was found guilty, convicted and fined in relation to three offences. On appeal, it was held that the primary judge erred in finding that one of the three charges had been made out and the Full Bench set aside her Honour's judgment and orders in that respect. 26Notwithstanding that the respondent was successful on appeal in relation to two of the three charges, the appellant submitted it should receive at least half of its costs at first instance and on appeal. This was justified, it was submitted, because the charge that was dismissed, namely, Matter 1392, was the most consuming of time, resources and, therefore, costs. 27The respondent, however, submitted that the outcome in relation to costs should be that: (a) the appellant should pay his costs of the liability proceedings at first instance or alternatively, 80 per cent of those proceedings; (b) the appellant should pay his costs of the sentencing proceedings at first instance; (c) the appellant should pay 90 per cent of his costs of the appeal in respect of the stay, the August 2010 hearing dates and all work incidental to those hearing dates; (d) the appellant should pay his costs in respect of the appellant's application to adjourn the appeal proceedings pending the outcome of other proceedings in the New South Wales Court of Appeal, the preparation of his submissions filed on 3 September regarding matters arising from the appeal hearing, a further hearing on 14 October 2010 and his submissions filed on 17 January 2011 regarding the outcome of certain Court of Appeal proceedings and its implications for the appeal; (e) the appellant should receive no costs of the appeal or alternatively, the respondent should pay 10 per cent of the appellant's costs of the appeal in respect of the August hearing dates and all work incidental to those hearing dates but (a) limited to the costs of not more than one solicitor on a hearing date; and (b) excluding any additional costs incurred by the appellant's choice of new senior counsel. 28That the appellant should pay the whole of the respondent's costs at first instance and costs of the appeal on a part/party basis, or even that the respondent should pay only a small proportion of the appellant's costs at first instance and on appeal, are not sustainable propositions. 29Matter 1392 was a discrete charge and clearly severable from the other two charges. Whilst it was the case, both at first instance and on appeal, that significant parts of the evidence led in the proceedings overlapped the three charges, there is no doubt that significant time and resources were devoted to making out and defending the charge in Matter 1392 and that evidence led in respect of the charge in that Matter was peculiar to that charge. In the appeal, the findings of the primary judge regarding Matter 1392 constituted the main focus of the appellant. 30Whilst we reject the respondent's claims regarding costs, having reviewed the whole of the proceedings at first instance and on appeal, we are also unable to accept the appellant's contentions that it should be entitled to half its costs. 31We have considered the following matters in arriving at a conclusion regarding costs: (a) ultimately, the respondent was successful in respect of two of the three charges laid against the appellant; (b) at least one-third of the sentencing proceedings was devoted to Matter 1392; (c) the appellant was successful on appeal in having the judgment and orders regarding Matter 1392 set aside; (d) Matter 1392 was a discrete charge severable from the other two charges for the purpose of assessing costs. Significant time and resources were spent in the proceedings both at first instance and on appeal in relation to the Matter; (e) where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation; (f) the respondent was successful in resisting the application by the appellant to adjourn the hearing of the appeal; (g) the appellant was successful in its stay application, albeit on the condition that it pay $300,000 to the respondent for his costs; (h) allowance should be made for the costs incurred by the respondent in relation to its supplementary written submissions responding to two tables relied upon by the appellant in the appeal proceedings. Ultimately, those tables were "unhelpful"; (i) no basis exists for awarding costs against the appellant in respect of additional submissions invited by the Full Bench following the Court of Appeal's decision in John Holland Pty Ltd v Industrial Court of New South Wales; Parsons Brinckerhoff (Australia) Pty Ltd v Industrial Court of New South Wales [2010] NSWCA 338 delivered on 9 December 2010; (j) there is no basis for awarding costs to the respondent on the basis that the appellant used more than one solicitor (it did not) or because of additional costs incurred by the appellant's choice of new and different senior counsel. There is no principle that an appellant ought to brief the same senior counsel on appeal that the appellant retained at trial. Further, the rate paid to each of the senior counsel was the same Crown rate. 32In exercising our discretion in this matter, having regard to the foregoing considerations, we have decided that a fair and just outcome is to order the appellant to pay 65 per cent of the respondent's costs at first instance and on appeal. This amount shall be discounted by the $300,000 already paid to the respondent.

Orders 33The Full Bench makes the following orders: (1) The costs order made by Schmidt J in relation to Matters IRC 1390, 1391 and 1392 of 2006 is quashed; (2) In respect of both the trial at first instance and on appeal the appellant is to pay 65 per cent of the respondent's costs in relation to Matters IRC 1390, 1391 and 1392 of 2006 as agreed or assessed; (3) The appellant is to be given credit for the $300,000 already paid to the respondent for its costs in accordance with the orders made by Boland J, President on 30 July 2009.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 June 2011