Costs do not always follow the event

Generally, costs of a proceeding follow the event in the sense that the winner at trial is entitled to an order that the losing party pay its costs, calculated on a party-party basis. That the loser is poor, or only just lost, or lost on a technicality, is usually irrelevant. In Jones v Apps (No 2) [2009] VSC 366, however, the defendant’s unmeritorious conduct which led to the litigation which he won and sought the costs of, and the devastating financial losses suffered by the plaintiff, an ingenue, with which the defendant was associated (though not found legally liable for), were sufficient in combination to displace the usual order, with the result that in the exercise of his discretion in relation to costs, Justice Hansen ordered that neither party be liable to pay the other party’s costs. It is an exceptional case, but it is a useful reminder of the Court’s absolute discretion in relation to costs, regardless of how settled the application of the discretion often appears to be.

In relation to the discretion, see Supreme Court Act, 1986 (Vic.) s 24(1). In Latoudis v Casey (1990) 170 CLR 534, Justice Dawson described the discretion as ‘unqualified’, Justice McHugh J described it as ‘uncontrolled’, and Chief Justice Mason described it as ‘unconfined’. That may be so, but it is a discretion the unqualified exercise of which must be exercised judicially: Overton Investments Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 [2001] NSWCA 137; (2001) LGERA 439 at 447 per Justice of Appeal Stein. See also Dal Pont’s Law of Costs (2008) pp 160ff from which these authorities are taken.

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