Racing New South Wales v Fletcher (No 2)

The Court of Appeal of New South Wales considered an appeal concerning the costs of proceedings at first instance between Racing New South Wales (the appellant) and Fletcher (the respondent). The primary dispute revolved around whether the appellant, having succeeded in overturning the first instance judgment on appeal, should be disentitled to its costs at first instance due to its conduct as the defendant, which the respondent argued invited litigation. The respondent also contended for partial success on an issue of substance and for the proceedings to be considered of public importance, which might warrant a departure from the usual rule that costs follow the event.

The court was required to determine whether the appellant's conduct as the defendant at first instance invited the litigation, thereby disentitling it to an award of costs. Additionally, the court had to consider whether the respondent had achieved partial success on an issue of substance and whether the proceedings were of such public importance as to justify a departure from the general principle that costs should follow the event.

The court reasoned that the appellant's conduct did not invite the litigation, nor did the respondent achieve partial success on an issue of substance. Furthermore, the court found that the proceedings were not of sufficient public importance to warrant a departure from the ordinary rule. Consequently, the court concluded that there was no justification for departing from the principle that costs follow the event.

Accordingly, the court ordered that the respondent pay the appellant’s costs of the proceedings at first instance and the costs of the written argument concerning the making of this order.