How much success warrants costs? Nominal damages enough?

In the case the subject of the last two posts, Justice Black summarised the law about just how successful a claimant need be before the rule that costs follows the event will presumptively kick in. The reasons in Barescape Pty Limited as trustee for the V’s Family Trust v Bacchus Holdings Pty Limited as trustee for The Bacchus Holdings Trust (No 12) [2012] NSWSC 1591 say at [35]:

‘In my view, the quantum of damages recovered in the Cross-Claim should also not be treated as the only measure of Bacchus’ success, where it had a proper interest in obtaining vindication of its rights, and there is also a public interest served in enforcing fiduciary duties. As Bacchus points out, in the leading case of Phipps v Boardman [1964] 1 WLR 993, Lord Wilberforce at first instance made an order that the plaintiffs have their costs of the proceedings in which a breach of fiduciary duty had been established, notwithstanding that an account was still to be taken and the amount of the profit which would then be recovered by the plaintiffs was then unknown. The case law also indicates that the Court may award costs in an application in which the plaintiff obtained only declaratory relief: see, for example, Ainsworth v Criminal Justice Commission (1992) 175 CLR 564. In Ng v Chong [2005] NSWSC 385 at [8], Hamilton J observed that an order for costs in favour of a party may be justified even if it recovers nominal damages (which is not the case here) where some other right is vindicated by the judgment. In Australian Competition and Consumer Commission v Teracomm Ltd [2009] FCA 903, the Court ordered the respondent to pay the costs of a regulatory body that obtained only declaratory relief. In Keller v LED Technologies Pty Ltd [2010] FCAFC 55 at [131], Emmett J treated declaratory relief as sufficient to support an order for costs, and held that a trial Judge’s discretion had miscarried in ordering that an applicant who had established contraventions of the Trade Practices Act 1974 (Cth), but no loss in addition to that recoverable under other causes of action, pay the respondent’s costs of that aspect of the trial. In this case, Bacchus obtained declarations as to its rights and also recovered substantive, rather than merely nominal, damages. I accept Bacchus’ submission that declaratory relief had particular significance where Mr Ventura had previously claimed that its principal, Mr Higgins, had wrongly advanced the allegations made in the proceedings.’

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