Costs: ‘follow the event’

Mosman Services Pty Ltd v McDonald (No 2) [2013] QSC 217

 

Byrne SJA

 

Issue

 

[1] Questions of costs remain.

Starting point

[2] By UCPR 681, “costs of a proceeding…are in the discretion of the court but follow the event, unless the court orders otherwise”.

[3] “…[T]he words ‘follow the event’ are to be read ‘distributively’, meaning that where there are two or more issues or questions…each of them is, or gives rise to, an event for which the ‘costs’ are to be determined separately”.[1]

Some success on both sides

[4] Of the claims litigated to judgment, the plaintiffs won only some; and during closing addresses, they abandoned a claim against MCG Civil that it pay $2.6M to Resources. So the defendants succeeded on a few claims against them.

General significance of partial success

[5] In Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane Industries Pty Ltd[2], a Full Court[3] of the Federal Court of Australia said[4]:

“…the demands of the community for greater economy and efficiency in the conduct of litigation may properly be reflected in a qualification of the presumption that a successful party is entitled to all its costs”

referring, with apparent approval, to Commissioner of Australian Federal Police v Razzi[5], where Wilcox J said[6]:

“…the court should use all proper means to encourage parties to consider carefully what matters they will put in issue in their litigation. If parties come to realise that they will not necessarily recover the whole of their costs, even though they have unsuccessfully raised a discrete issue, they are likely better to consider whether the raising of that issue is a justifiable course to take.”[7]

[6] To approach an award of costs in that way would also conform with the duty incumbent on a barrister under both the general law[8] and the 2011 Barristers’ Rule[9] to exercise discrimination in deciding on the issues, legal and factual, to be agitated.

Apportionment

[7] Importantly, at least the great bulk of the evidence at trial related to causes of action on which the plaintiffs succeeded: indeed, no significant body of evidence was shown to relate only to issues on which the defendants succeeded.

[8] Moreover, so far as the pre-trial phase is concerned:

• there is no reason to suppose that the defendants’ burden of disclosure was increased by reason of claims on which the plaintiffs failed;

• there was no attempt by the defendants to demonstrate that they actually incurred additional expense in investigating, or in otherwise responding to, any of the plaintiffs’ unsuccessful claims.

[9] There should, however, be some allowance, in the defendants’ favour, for the probabilities that:

• The defendants sustained some (albeit modest, in all likelihood) additional expense in successfully resisting unsuccessful claims against them: e.g. in taking instructions, in pleading, and in considering pertinent law.

• the plaintiffs will have incurred some additional cost in prosecuting claims on which they failed: expense for which they should not be compensated[10].

[10] On the other hand, some pleaded defences were abandoned at trial. Presumably, the defendants incurred a little expense in pursuing them. There is no good reason to compensate the defendants for that[11]. And the plaintiffs probably will have incurred some additional expense in dealing with those contentions before abandonment: a consideration that supports compensating the plaintiffs on those issues, if that can fairly be achieved.

[11] In the circumstances, to award costs solely by reference to the parties’ success on the several events litigated would produce an unjust outcome, overly compensating the defendants.

One, global assessment

[12] It would complicate the process of assessment unduly if costs were to be ordered other than:

• on a global[12] basis; and

• by way of a reduction in the costs allowed to the plaintiffs[13], to ensure that there is but one assessment.[14]

Disposition

[13] An appropriate balance is struck by awarding the plaintiffs 80% of their costs.

 

 

David Cormack – Brisbane Barrister. 

Related Posts

Recent Comments

    Categories