Entitlement to costs of claimants enjoying mixed success in their own claim

In the case the subject of the last post, Justice Black summarised the law about when the winner may be deprived of the costs associated with issues which it contested and lost: 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:

  1. The Plaintiffs contend that, if the Court was considering an order for payment by them of Bacchus’ costs of the Cross-Claim, it should have regard to the fact that Bacchus failed in various aspects of the Cross-Claim. While costs may be apportioned between issues where a party has succeeded only on some issues, there are many cases where that is not an appropriate course. In Cretazzo v Lombardi (1975) 13 SASR 4 at 16, Jacobs J noted that:

… trials occur daily in which the party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law. The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case. There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on his success in those particular issues.

  1. In Hughes v Western Australia Cricket Association (Inc) (1986) ATPR 40-748 at 48-136, Toohey J observed that:

“(1) Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order.

(2) Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which it has failed.

(3) A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party’s costs of them. In this sense, “issue” does not mean a precise issue in the technical pleading sense but any disputed question of fact or law.”

  1. On the other hand, in Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 at [6]-[7], Beazley, McColl and Basten JJA observed that:

“Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which the appellant was successful and those on which it failed. Unless 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: Waters v P C Henderson (Aust) Pty Ltd (Court of Appeal, 6 July 1994, unreported).

As the appellants submit, the commencing position is that costs follow the event so that a successful party is entitled to costs. In relation to trials it has been said that it 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: Sabah Yazgi v Permanent Custodians Ltd (No 2) [2007] NSWCA 306 (at [24]). A similar approach is adopted in the Court of Appeal. If the appellant loses on a separate issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue: Sydney City Council v Geftlick (No 2) [2006] NSWCA 374 (at [27]).”

That approach was in turn endorsed in Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38]. The relevant principles were summarised by the Court of Appeal of the Supreme Court of Victoria in Chen v Chan (No 2) [2009] VSCA 233 at [10] as follows (omitting footnotes):

“3. Where there is a multiplicity of issues and mixed success has been enjoyed by the parties, a court may take a pragmatic approach in framing the order for costs, taking into consideration the success (or lack of success) of the parties on an issues basis. Generally, if such an order is made, it is reflected in the successful party being awarded a proportion of its costs but not the full amount.

4. A court may, when fixing costs in a claim where there has been mixed success, take into account complications which it considers will arise in the taxation of costs, as part of its consideration of the overall interests of justice.”

  1. In the present case, accepting that Bacchus was not successful on all of the issues on which it relied on the Cross-Claim, it was successful on the most substantial of those issues, including establishing breaches of the no conflict and no profit rules and its claim for wrongful diversion of function business from Bacchus Restaurant to Longworth House. I do not consider this is a proper case in which to seek to subdivide costs to seek to exclude or adjust for the costs of subordinate issues, which I also do not think could be done in any reliable, even if approximate, manner.


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