CONTENTS I Introduction II Literature and Judicial Dicta: A (Limited) Review III Quantitative Analysis A Frequency B Nature of Parties C Nature of Dispute D Nature of Conditions IV Consideration A Qualitative Methodology B Why? 1 Practical Considerations 2 Fairness 3 Nature of the High Court C A Preliminary Assessment 1 Practical Considerations 2 Fairness 3 Nature of the High Court V Other Observations A Extent of Costs B Limitations C Inconsistency and Timing D Practicalities VI Wider Implications A Broader Application B Alternative Mechanisms C Reform VII Conclusion VIII Appendix: Costs-Conditional Special Leave in the High Court of Australia I INTRODUCTION
[Prior to a special leave hearing, the appellant in Freidin v St Laurent had offered to pay the respondent's appeal costs in any event if leave was granted.]
Kirby J: Mr Casey, it is rather ungracious of you to reject all this money that the applicant is bringing to Court trying to buy its way into the High Court of Australia.
Mr Casey: We have not seen any buckets yet, your Honour. (1)
From time to time, the High Court of Australia grants special leave to appeal on the condition that the appellant pays the respondent's appeal costs in any event and undertakes not to disturb costs orders below. This is unusual. Costs typically follow the event, (2) and Australian courts have resisted departing from the traditional principle in a range of contexts. (3) Why should an appellant bear the entire costs of a dispute if they are ultimately successful in the High Court? It is not far-fetched to suggest that, in complex cases fought out across several fora, the price could reach seven figures, as the appellant is unable to recover its own costs and is liable for the respondent's costs. Counsel in one such case quipped: 'Justice does not come cheap.' (4)
Yet the High Court's practice is not without compelling policy justifications. Costs-conditional special leave is typically imposed where the appellant is a deep-pocketed public or commercial party with a broader interest in the disputed jurisprudence, while the respondent is an individual concerned solely with the litigation at hand. Requiring this condition thereby allows the Court to fulfil its law-developing role at the apex of the Australian judicial system without 'burdening other parties swept along in expensive litigation'. (5) When a 'large and recurrent litigant', such as an insurer or the Commissioner of Taxation, seeks to change the law 'in order to vindicate their long-term commercial [or public] interests', it seems entirely reasonable for special leave to be conditioned on this basis. (6) The practice may also have desirable consequences: the respondent is financially empowered to retain eminent senior counsel (to the benefit of the Court), and will be disinclined to settle safe in the knowledge that they are protected from adverse costs.
A review of the High Court's costs-conditional special leave practice is overdue. To the author's knowledge, it has never been previously considered in any depth in academic literature. Nor has it been the subject of much introspection by the Court. In one of the few judgments to consider the practice, Oshlack v Richmond River Council ('Oshlack'), the Court split on its ramifications. (7) There is also disagreement as to the practice's frequency and nature. It has variously been described as 'rare', (8) 'occasional' (9) and occurring 'quite frequently, (10) while views differ as to whether the condition is ordinarily 'volunteered' by the appellant, (11) sought by the respondent, or 'extracted' at the Court's initiative. (12) Given the dissonance between this practice and the traditional costs rule, an exploration of these diverging opinions is warranted.
This paper utilises both quantitative and qualitative research methods. It begins with a review of the sparse literature and judicial dicta on this topic. It then undertakes a quantitative assessment of the practice, reviewing all successful special leave applications from May 1998 to January 2017 (the Gleeson and French Courts) to determine when and in what circumstances costs-conditional special leave is granted. The paper then considers broader questions about the practice, its justifications and appropriateness through a mixed methods framework. Qualitative interviews with a range of stakeholders provide varied perspectives on costs-conditional special leave, which are analysed and synthesised with the support of the data set. The paper concludes by considering the wider impact of this practice.
Beyond the intellectual and policy relevance of the following discussion, it is hoped that this research may also have practical utility. While costs undertakings are now widely understood to be the 'price' of special leave in appropriate cases, (13) and there was unanimity among research participants that appellants never refuse the costs-conditions lest special leave be declined, from time to time it has been an issue in dispute. In May 2017, the question was squarely raised during a special leave hearing. (14) Counsel for the appellant resisted funding the respondent's appeal because they were 'a well-heeled union'. (15) Kiefel CJ held: 'On condition that the applicant does not seek an order for costs of the appeal, there will be a grant of special leave. The Court is not minded to take the question of indemnification further.' (16) In several other cases, disagreement between the parties has seen the question of costs deferred for determination at the appeal. (17) Given the absence of rules or prior reasons controlling the Court's discretion in such matters, guidance as to why and in what circumstances costs-conditions will be required may assist litigants.
II LITERATURE AND JUDICIAL DICTA: A (LIMITED) REVIEW
The practice of costs-conditional special leave has origins in the Privy Council. (18) Writing in 1912, Norman Bentwich explained: 'Occasionally it has been made a term [of special leave to appeal] that the petitioner shall in any event pay the costs of both sides.' (19) Bentwich cited an 1850 case involving the East India Company where leave was granted, notwithstanding the small sum in dispute, because the appellants undertook to pay 'all costs, charges, and expenses of the respondent'. (20) The comments of Lord Langdale in that case are instructive:
The question is, whether this prosecution being by the East India Company, and no doubt important to have decided, for the benefit of the whole country, the whole expense of this appeal should not be borne by them. However important it may be to establish the law, upon a question of this kind, it would be very wrong to put the party to so great expense in a case where so small amount is at issue. Even if the right of appeal were granted, you might be defeated in this way; the Respondent may say, that it would be much better to pay his 250 rupees, than to come here, and pay the expense of this prosecution. (21) More than a century later, the Judiciary Amendment Act (No 2) 1984 (Cth) removed the last remaining appeals as of right to the High Court and established a regime whereby appeals could not be brought unless special leave was granted. (22) The question of costs was not adverted to by the legislation's Explanatory Memorandum. (23) However, following the Australian implementation of special leave, the Privy Council's historical practice was adopted. (24) In one work, the author cites cases from the mid-1980s where costs-conditional special leave was granted. (25)
The High Court's power to require costs undertakings stems from the discretionary nature of special leave. (26) Section 35A of the Judiciary Act 1903 (Cth) ('Judiciary Act') provides that the Court 'may have regard to any matters that it considers relevant' in determining whether to grant special leave. (27) It then identifies several factors which the Court shall have regard to, including 'whether the interests of the administration of justice, either generally or in the particular case, require consideration [of the appeal] by the High Court'. (28) Accordingly, the question of costs is a factor reasonably within the Court's purview when determining special leave, allowing it to require costs conditions as it sees fit. While a corollary issue might arise as to whether imposing costs conditions--and the manner in which the Court does so--are consistent with the exercise of judicial power, such questions will not be considered by this paper. (29)
Little has been written, by judges or commentators, about costs-conditional special leave in the High Court. David O'Brien highlighted the practice in his 1996 contribution, noting that '[s]pecial leave is sometimes granted upon conditions' before citing a host of cases to support his short additional commentary. (30) In a 2007 University of New South Wales Law Journal article, Justice Michael Kirby offered passing observations: 'In some (rare) cases where an applicant represents a large group interest, it might offer to pay the respondent's costs ... and not to disturb costs below, as a sweetener to signify the importance of the case.' (31) He continued:
Similarly, if the Court voices concern that any grant of leave should be subject to [costs] requirements ... such conditions should ordinarily be accepted as the price of having a test case of importance to the applicant heard, without burdening other parties swept along in expensive litigation. (32) Costs authority GE Dal Pont has also made brief comments on the topic, noting that the High Court pursues this course of action in cases where 'the resolution of a point is desirable from the point of view of a large and recurrent litigant ... but the opponent ... is not well positioned to meet adverse costs orders'. (33) While several other commentators have made similarly cursory observations, no scholar has considered costs-conditional special leave in any depth.
Nor has there been much judicial...