"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."
Indemnity Costs
4 Woolworths seeks to make good an entitlement to receive 90 percent of its costs on an indemnity basis.
5 In Harrison v Schipp [CA 40208/98; CA 40761/98] Court of Appeal, unreported, 22 February 2001 [BC 200100344] the Court of Appeal had occasion to revisit the proper approach to the award of indemnity costs. Giles JA at [132]-[137], with whose judgment Handley and Fitzgerald JJA agreed, emphasised the type of delinquency in the conduct of the proceedings necessary to be established in order to make good a departure from the ordinary basis on which costs should be assessed. The making of deliberately false allegations in a defence [which may occur together with prolixity, prevarication, and/or the gross prolonging of the litigation], may give rise to an occasion for the exercise of the Court's principled discretion by the making of an indemnity costs order.
6 In Harrison even although the evidence of the particular parties was not accepted and they were found to have given false evidence and to have propounded false documents, the Court of Appeal holding was that the type of delinquency demonstrated did not approach that considered to justify a special order as to costs in Degmam Pty Ltd (in liquidation) v Wright (No 2) (1983) 2 NSWLR 354, but was rather a suggested form of delinquency in terms of the defendant's legal wrongdoing anterior to the litigation [albeit becoming the subject of the litigation].
Anton Pillar Orders and indemnity costs
7 The plaintiff has, inter alia, sought an indemnity costs order with respect to its costs of the Federal Court proceedings up to and including 12 July 2004 [that is to say the costs of obtaining and executing the Anton Pillar order]. Neither party has referred the Court to any authority concerning the proper and principled approach to be taken by the Court to that portion of a set of proceedings up to and including the obtaining and executing of an Anton Pillar order, likely comprising the most extreme form of ex parte relief known to the law. As explained in Meagher, Gummow and Lehane's Equity Doctrines and Remedies 4th ed., Butterworths 2002 at 21-495, an Anton Pillar order "either illustrates the recognised equitable jurisdiction to preserve in existence until trial property which is the very subject matter of the trial, or else … is genuinely ancillary to the vindication of a recognised legal or equitable claim".
8 Clearly, as it seems to me, the principles which have been enunciated in terms of the proper approach to an award of indemnity costs, have not had to deal with the special and extraordinary circumstances justifying the making of an Anton Pillar order. The application is one where the strength of the prima facie case to an ex parte order directed at the preservation of property must be considerable. An applicant for relief of this type must be in a position to put forward strong proof of the highest justifiable suspicion of misconduct which, absent the making of the order sought, would extremely likely lead to irreparable loss or damage.
9 Clearly each application for an order for indemnity costs with respect to the obtaining and execution of an Anton Pillar order must be determined on a case and circumstance specific basis. The Court could not lay down any hard and fast rule of practice or procedure in that regard. The point of principle which requires examination concerns the undoubted fact that up to the point in time when the defendant becomes aware of the pendency of the proceedings [which will only take place when the order is executed], there simply cannot be delinquency of a defendant in relation to those proceedings. Hence some point of reference other than delinquency in the conduct of the proceedings must be the touchstone for any exercise of the power to make an indemnity costs order with respect to the obtaining and execution of an Anton Pillar order. That touchstone must inhere in the interests of justice.
10 Returning to the proceedings at hand, the special circumstances saw the obtaining of the Anton Pillar relief in entirely justifiable, indeed extraordinary circumstances. The whole of the judgment requires to be read in this regard.