Styles v Knox (No 2)

In the Federal Court of Australia, the matter of Styles v Knox (No 2) involved the plaintiff, Styles, seeking a departure from the usual order regarding costs following the event. Styles sought to hold Knox, the defendant, liable for the plaintiff's legal costs in a separate proceeding, arguing that Knox's conduct during that litigation was so egregious that it warranted such an order. The Federal Court was required to determine whether misconduct in one proceeding could justify a departure from the usual order of costs in another, distinct proceeding.

The court considered whether the alleged misconduct by Knox in the separate litigation warranted a deviation from the principle that costs follow the event. This involved assessing the nature and gravity of the misconduct, and whether it was sufficiently serious to warrant a departure from the usual order. The court also needed to consider the relationship between the two proceedings and whether the misconduct in one proceeding could have an impact on the costs order in another.

The court found that while the misconduct in the separate proceeding was serious, it did not warrant a departure from the usual order of costs in the present matter. The court held that the principle that costs follow the event should generally be adhered to, and that departures from this rule should only be made in exceptional circumstances. In this case, the court found that the misconduct, while serious, did not reach the threshold of exceptional circumstances necessary to warrant a departure from the usual order. Consequently, the court ruled that costs should follow the event, and no departure was warranted.

The court ordered that the costs of the proceedings were to follow the usual order, with Styles not being entitled to recover the costs from Knox in the separate proceeding. The court emphasised that while misconduct in litigation was to be condemned, it did not, in itself, warrant a departure from the established principle regarding costs.