Case note and commentary Essay Example

Case Note and Commentary

Case: The State of Western Australia –v Collard [2015] WASCA 86 – Case Note

Court: The Court of Appeal (Western Australia)

Judges: Buss JA, Newnes JA Murphy JA

Appellant: The State of Western Australia (First Appellant), Community Development Ministerial Body (Second Appellant)

Respondents: Parents and Children

Decision Date: 8^th May 2015

Issues of Appeal: The appellants were appealing against the decision of the primary court Judge who found out that the appellants were successful in winning the case. However, Her honor did not request the defeated party to pay the costs to the winning party as required by the law¹.

Case Background

Procedural History

Before the appeal, the appellants of this case had won an initial case of Collard v The State of Western Australia [No 4] [2013] WASC 455², whereby Judge Pritchard J reached a decision that the appellant who were then the defendants had won the case³. Currently, the appellants were appealing against orders that were made by the Judge in the prior case. The two parties had agreed that there were no justifications to hold the defendant liable for fiduciary duties to the plaintiff so as to warrant their compensation for damages. After the appellants won the case at that time, the Judge required that the case be dismissed on the ground that the plaintiff did not provide enough grounds as evidence to be compensated for breach of fiduciary relationship by the defendant⁴.

The case was brought in the court of appeal on the grounds that the Judge, Pritchard J did not fulfill the requirement of the law and demand that the winning party be paid costs by the losing party as per the Rules of the Supreme Court 1971 (WA)⁵.

Material Facts

The respondents had been defeated in earlier case⁶. The court had a jurisdiction to order payment of costs to the winning party (The Appellants) but it failed to provide this order⁷. Therefore, the primary judge erred in exercising her discretion of failing to make an order regarding costs. She departed from the normal order in relation to costs⁸.

Case Summary

Legal Issues and Reasoning

Court’s Jurisdiction to Award costs to the Winning Party

The court found out that the primary judge had a disposition to award costs to wining party as conferred by section 37 of the Supreme Court Act⁹. The Act provides a broad discretion to the court concerning costs and this discretion must be exercised judicially. The general rule of the successful party is entitled to an order for its costs. In the of Oshlack v Richmond River Council (1998) 193 CLR 72, the court held that the successful party should be entitled to order for costs for the reasons of fairness as well as policy¹⁰. The costs are not usually awarded to the successful party with the purpose of punishing the unsuccessful party. Its major purpose is to indemnify the winning party in the case. The reasoning here is that the successful party could not have incurred the expenses if the legal action was not brought up in the first place. Therefore, the unsuccessful party should bear the liability for those costs to the successful party in the achievement of fairness because of their unsuccessful litigation¹¹. This reasoning justifies the decision made by the judges in the court and costs were not awarded to the successful party but a determination was sought. Care should always be given with regard to the litigation based on the concept of public interest not to base the arguments on an unjudicial manner¹².

The Evidence Considered

The court found out that the respondents were responsible to pay the appellants their costs of litigation on the following basis¹³. The respondents did accept that the case between them and the second appellant (the Community Development Ministerial Body) could not succeed and dismissed it. Therefore, a basis could not be found why the normal costs order that the respondents should pay to the second appellant should not be made.

On the first appellant the court found out that the respondents did not raise an action against the State of Western Australia to establish a principle of law based on public interest. The judges argued that the respondents brought the case into court for obtaining private benefits by way of being compensated damages. Even though the claim as a test case had an element of public interest, this was outweighed by the private interests of the children respondents. This means that a case that is brought in court based on public interest does not necessarily give the discretion of awarding or not awarding costs¹⁴. Based on this reasoning, the court was not able to properly characterize the case as a test case because it brought about novel issues. Therefore, as per the judges the court did not find appropriate grounds to conclude that the normal costs order that the party that was unsuccessful should not pay to the successful party should not be made. The judges confirmed that the primary judge had erred in Her duty to exercise discretion of making no order as to the costs.

Allowance of New Argumentation on Appeal

On appeal, the State was allowed to present a new argument based on the failure of the primary judge to require the unsuccessful party to pay the successful party the costs incurred in the litigation. The judges reasoned that if the appellants are not given the opportunity to make that argument, then the primary courts’ decision would be successful in acting contrary to the law. Section 37 of the Supreme Court Act gives the court the discretion with regard to costs¹⁵. However, the judges accepted the new argument of the appellants that the primary judge had violated this section of the law by not requiring the respondents to pay the required costs. The reasoning is consistent with the general rule that the winning party has an entitlement to an order for its incurred costs. In the reasoning of the appellants, the decision of the primary court of not making the order was not within a discretionary judgment that is sound. Additionally, the circumstances of the case could not be considered as having the character of exceptional and rare to justify the primary judge not making a cost order.

The appeal was accepted and the respondents given an order by the court to pay the costs of the action to the appellants.

Ratio Decidendi

The paying of costs to the successful party by the unsuccessful party is not to punish the respondents but to put the appellants back to the position they were in before incurring the legal expenses in the case.

Significant Obiter Dicta

The operation of section 37 of the Supreme Court Act 1971 is not inconsistent with the court making an order of the unsuccessful party to pay costs to the successful party. The Act as a law should be enforced as it is and the court should not fail to take its discretion with regard to costs based on any circumstance¹⁶.

Commentary

The Cost Rule

There are different economic consequences for litigation and costs are among these economic consequences that the Supreme Court may charge the unsuccessful party for the litigation on the successful party¹⁷. As per the Supreme Court, the cost rule is that a party that is successful in litigation has an entitlement of recovering from the party that is unsuccessful for all the legal costs that it incurred during the litigation¹⁸. This is known as party to party basis.

In Australia, the awarding of costs to the successful party at the time of concluding the case is usually within the court discretion¹⁹. In the common practice for civil cases, the costs usually follow the event. Therefore, the party that did not win the civil litigation is ordered to make payments of party that is successful.

Under the cost indemnity rule, usually, the party that is not successful is not demanded to make payments of the actual legal costs that were incurred by the winning party in pursuit or defense of the case²⁰. The amount required to be paid to the successful party is usually determined by the court irrespective of the basis for agreement on the charges between the successful party together with their lawyer. This coincides with the decision made y the courts in the Federal Court in 1998²¹.

The cost rule is usually based on the responsibility of the court to ensure fairness as well as justice when making decisions in cases. In the case of Helou v Nguyen [2014] NSWSC 22 at [141]-[144], the court held that in spite of the case jurisdiction, fairness and equity must be achieved when making decisions by the courts²². This is done with the intention restraining from departure of good conscience Part 52 of the Supreme Court Rules, rule, 23(2) describes that a party to party basis means that where necessary, the successful party can recover all the costs for the achievement of justice and also for defending the rights of the party²³.

The costs paid to the successful party do not include costs that were incurred through over caution, misconduct or negligence²⁴. The costs that are allowed are those that are reasonable as per the court assessment. They also include costs of disbursements that are considered by the assessor as being reasonable to carry out²⁵. This view is seen discriminating on one party that was successful in protecting itself from the litigation. Based on the current case, the appellants will be compensated costs that are related to the litigation only. The court will assess the costs that the respondents will pay to the appellants.

The complexity of how costs should be assessed based on the cost rule raises the questions of what objectives should the cost rule be aimed at achieving?²⁶, the effects of the cost rule, and how does uncertainty lead to the effect of adverse costs order in courts and how legal cases should be carried out? The subject of cost assessment raises more questions on whether the risks of adverse costs order have a possibility of deterring litigation. Additionally, it is important to determine whether there is need for making change to the cost rule and if necessary what rules should be made²⁷.

Deciding Cases According to the Law

Cases before the Court may involve political questions. However, this does not affect the way the courts decide on these cases. Courts are required by the law not to be interfered by political questions when making judgments on cases²⁸. Therefore, the Courts solves the cases legally and not by political means. The court usually does not have any agenda on the cases and determines disputes according to the law²⁹.

A judge in court is required to make a decision or give verdict on the basis of the testimony and other evidence that is presented by the participants in the court³⁰. The party that is not satisfied is usually given the opportunity to appeal on the decision to a higher level of the court. In the court of appeal, the case is usually assigned three-judge panel for its consideration. The court reviews and makes a decision based on the written arguments of the attorney and other records related to the case³¹. The arguments presented by the appellants usually contain legal as well as factual briefs in relation to why the primary judge made the decision of the trial and reasons why that judgment should be reversed. On the other hand, the respondent is given the right of responding to the arguments made by the appellant. To make its decisions, the appellate court is not involved in conducting trials³². Its work is to review the exhibits, papers as well as transcripts for the trial court. The above items are considered as the record of appeal and are the ones to be used in determining if the trial court followed the law correctly in making its decision. This is to say that the appellate court is not influenced by anything like politics or status of the participants involved in the case. They only apply the law³³.

The rules of equity or fairness are not rigid when faced with novel situations like in the current case³⁴. However, this does not mean that courts should go ahead not to provide justice because of not following principles. A principle must be applied if at all the circumstances of the case are found to fall within it³⁵. The discretion of ordersing for costs by courts should be exercised when circumstances warrant³⁶. Judges in Court decides the case depending on the values they hold³⁷.

In the case of the State of Western Australia v Collard [2015] WASCA 86, the Supreme Court was the appellate court and the State was presenting their case for review³⁸. In the Supreme Court, the judges have a possibility of accepting or declining the decision of a lower court. Generally the Supreme Court hears cases from lower federal courts³⁹. This depends with its review on the briefs and facts used by the Jury at the lower court in making the final decision of the case. With regard to deciding the case, it is clear that the Supreme Court of Western Australia was not influenced by the political status of the state in accepting their appeal to the case. The facts and records used by the judge at the lower court were used to give a final decision of the appeal⁴⁰.

Works Cited

Australian Broadcasting Corporation, ‘WA Supreme Court dismisses Stolen Generation compensation claim launched by Collard family,’ News, (2015).

Australian Law Reform Commission, ‘Who Should Pay? A Review of the Litigation Costs Rules,’ Issue Paper 13. (1994:33-34).

Gooda, M, ‘Aboriginal and Torres Strait Islander Social Justice Commissioner,’Social Justice and Native Title Report 2014 Launch.Australian Human Rights Commission, (2014).

Goodwin, S, ‘THEMIS: Justice and the Law, University of Queensland, (2014).

Judicial Commission of NSW, ‘Costs,’ Civil Trials Bench Book. (2015).

Platto, C, ‘Economic Consequences of Litigation Worldwide,’ Kluwer Law International, (1999).

Radan, P, & Stewart, C, ‘Principles of Australian Equity & Trusts,’ 2nd ed, LexisNexis, 2013

Thonson Reuters, ‘How Does the U.S. Supreme Court Decide Whether to Hear a Case? Find Law, (2015).

Waugh, J, ‘The never-ending cost of being made a ward of the State,’ Wolters Cluwer, (2015).

Supreme Court Act 1971

Buddhist Society of Western Australia (Inc) v Shire of Serpentine — Jarrahdale[1999] WASCA 55

Helou v Nguyen [2014] NSWSC 22 at [141]-[144],

Oshlack v Richmond River Council (1998) 193 CLR 72

Ruddock v Vadarlis (No 2)[2001] FCA 1865; (2001) 115 FCR 229

State of Western Australia v Collard [2015] WASCA 86

Stewart v Atco Controls Pty Ltd (in liquidation) [2014] HCA 15

William Hollier v Australian Maritime Safety Authority (No 2)[1998] FCA 975