Betfair Pty Limited v Racing New South Wales (No 13)

In Betfair Pty Limited v Racing New South Wales (No 13), the parties were engaged in a dispute over the production of certain documents, with Betfair seeking their inspection and Racing New South Wales resisting on the grounds of legal professional privilege. The case was heard by the Federal Court of Australia, where the primary issue was whether Racing New South Wales was entitled to claim costs in its favour following the unsuccessful outcome of its privilege claims.

The court had to determine the appropriate measure of success and failure in the context of the privilege claims. Betfair initially argued that it had been more successful due to the number of claims and documents ordered to be produced. However, after considering the Full Court’s orders, it was determined that Racing New South Wales had actually enjoyed greater success in the event. The court found that 38 of the privilege claims were successful, while 19 were unsuccessful. The event, therefore, favoured Racing New South Wales. However, the court also noted that the case involved multiple events with multiple outcomes, making it inappropriate to measure success and failure in relative terms. Both parties enjoyed significant success overall, and thus each should bear their own costs for the motion.

The court further reasoned that costs should be awarded to compensate the successful party and not to punish the unsuccessful party. Costs generally follow the event, but where issues are not discrete and severable, it may not be appropriate to apportion costs based on relative success and failure. In this instance, the court concluded that Racing New South Wales’ submissions against the making of a costs order should not be accepted. Racing New South Wales had refused to produce documents on the basis of a "without prejudice" privilege claim, which the court rejected and ordered the documents to be produced. Given that Betfair had to come to court to vindicate its right to inspect the documents, it was entitled to an order for costs in its favour. The efficiency with which Racing New South Wales ran its defence did not undermine this entitlement, although it did reduce the amount of costs Betfair would be liable for. The court also framed the order to exclude any liability on Racing New South Wales for the costs incurred by Betfair due to the privilege claims made by Racing New South Wales.