Donald Campbell & Co Ltd v Pollak

Viscount Cave L.C. My Lords, Branson J.,
who retried this action (under an order for a new trial)
without a jury, decided the issues of fact in favour of the
defendant (the respondent in this appeal), but gave judgment
for him without costs. In arriving at his decision not to
give the defendant his costs, the learned judge relied mainly
upon the fact—established by the verdict and judgment
in another action which had been consolidated with the
present action—that the defendant had been guilty of
improper conduct which (as he held) had induced the

(1) 5 App. Cas. 582. (5) Macl. & R. 28.
(2) [1903] A. C. 126.4 (6) 8 Cl. & F. 264, 293.
(3) 1 Dow, 261, 270. (7) 9 Cl. & F. 173.

(4) 1 Bligh (N. 8S.) 639. (8) 14 App. Cas. 26.

A. C. - AND PRIVY COUNCIL.

liquidator of the appellant company, and, indeed, had forced
him in the execution of his duty, to bring the present action.
On an appeal by the defendant to the Court of Appeal against
so much of the judgment of Branson J. as had ordered that
no order should be made as to costs, that Court held that
the trial judge was not entitled to take into account the
proceedings in the other action—which (as they held) had
been " de-consolidated '"' and wholly separated from the
present action by the order for a new trial of this action—
and accordingly that the judge had no materials before him
upon which it was right for him to exercise his discretion
as to costs; and they allowed the appeal and declared the
defendant entitled to his costs of action. The plaintiffs
have now appealed to this House against the order of the
Court of Appeal. The costs in question amount to a very
large sum, as they include the costs of two long trials and
several appeals. The respondent raises the preliminary
objection that the appeal is incompetent as being an appeal
as to costs only, and your Lordships have now to deal with
this preliminary objection.

The objection appears, at first sight, to be somewhat
surprising. Under s. 5 of the Judicature Act, 1890, and
Order txv., r. 1, of the Rules of the Supreme Court, the
costs of a trial without a jury are in the absolute discretion
of the trial judge; and under s. 49 of the Supreme Court
of Judicature Act, 1873 (which was in force when the appeal
to the Court of Appeal was heard), no order made by the
High Court of Justice or any judge thereof as to costs only
which by law were left to the discretion of the Court was
subject to any appeal except by leave of the Court or judge
making such order. Notwithstanding these enactments, the
respondent appealed (without leave of the Court or judge)
to the Court of Appeal against the order of the trial judge
as to costs, and he succeeded in that appeal on the ground
that the judge had no right in law to make that order; and,
now that the appellants ask your Lordships to review that
decision and to hold that the trial judge had such a right,
the respondent objects that the appeal to this House is as

739

H. L. (E.)
1927

eae
DONALD
CAMPBELL
& Co.
v.
POLLAK.

Viscount Cave
L.C.

740

H. L. (E.)
1927
"—

DoNnALD
CAMPBELL
& Co.

v.
PoLuak.
Viscount Cave
L.C.

HOUSE OF LORDS [1927]

to costs only and cannot be entertained. It would seem
that, if the appeal to the Court of Appeal, which was an
appeal as to costs only, was competent notwithstanding
the statutory prohibition of such appeals, the appeal to this
House must be equally competent notwithstanding the rule
of the™|House which prohibits such appeals. But the
respondent contends that the rule adopted by this House
goes beyond the terms of the statute which binds the Court
of Appeal, and that under that rule this appeal cannot be
heard.

My Lords, there are passages to be found, both in speeches
made in this House and in text-books of authority, which
lay it down in broad terms that an appeal as to costs only
will not be entertained here; but it is plain that the rule,
so stated, needs some qualification. For instance, an order
made contrary to a statute which gives a party a right to
his costs is clearly appealable: see Tod v. Tod.(1) So,
an order as to costs made by the Court of Appeal without
jurisdiction must needs be subject to an appeal to this House,
for otherwise the law might be broken without redress ;
and Garnett v. Bradley (2) and Hualey v. West London
Extension Ry. Co. (3) are instances of such appeals. Why,
then, should a decision of the Court of Appeal as to costs
which is founded on a wrong view of the law—and in dealing
with the preliminary objection this must be assumed to be
the case—be exempt from review? If, on argument, it
should appear that the Court of Appeal was wrong in holding
that the trial judge had no right to refer to the proceedings
in the consolidated action, then there was no ground on which
the Court of Appeal could discharge his decision as to costs,
and the order setting that decision aside was made contrary
to the statute and was without jurisdiction. Why should
the appellants be prohibited from putting forward this
contention ? The suggestion that, if the appeal were allowed
on that ground, the House would be reviewing a discretion
exercised by the Court of Appeal is obviously untenable ;

(1) 2 W. & S. 542. (2) 3 App. Cas. 944.
(3) 14 App. Cas. 26.

|

! A. C. AND PRIVY COUNCIL.

principle, therefore, unless there is some settled rule of the
House which prevents your Lordships from hearing the
appeal, I am of opinion that it should be heard.

My Lords, if the authorities are carefully examined, I think
it will appear that there is no rule of the House which prevents

a party from asking to have a decision reviewed on the ground
- that it is wrong in law, even though the only result of a

reversal of the decision would be to alter the incidence of
costs. In my opinion, the true rule is that, while this House
will not review an exercise of discretion as to costs, it will
not refuse to entertain an argument that an order as to costs
is founded on an error of law.

As the contention of the respondent is wholly based
on the citation of cases, I feel compelled to trouble your
Lordships with a review of the decisions of this House bearing
upon the point ; and I have thought it well to include in order
of date the relevant decisions of the Judicial Committee of
the Privy Council and some statements made by Lord
Chancellors when sitting on appeal from Judges in Chancery.

The earliest case with which I am acquainted is Duvall v.

Terrey (1), where the appeal failed on merits, and the report
concludes: '' And as to costs, held no cause for an appeal
in this case, nor in truth was it ever known to be a cause,
if the merits were against the party appellant. And so the
decree was affirmed in the whole." In Huband, v. Huband (2)
a decree of Lord Keeper Harcourt was affirmed except as
to costs. In Gould v. Granger (3) "the Lord Chancellor
(Lord King) allowed an appeal from the Master of the Rolls,
for costs only, and his Lordship said, he had known the House
of Lords allow an appeal. for costs only, tho' the old practice
was otherwise." In Owen v. Griffith (4), on an appeal from a
decree made by Abney J. upon a bill against an execution
creditor for an account on the ground that the judge had

(1) Show. P. C. 15, 16. (3) Mosely, 395.
(2) 7 Bro. P. C. 433. (4) 1 Ves. Sen. 250.

741

; for if that Court was wrong in setting aside the discretionary H. L. (E.)
| order of the trial judge, then there was no field for the
_ exercise of any discretion by the Court of Appeal itself. On

1927
~~

DONALD
CAMPBELL
& Co.

v.
POLLAK.
Viscount Cave
L.C.

742 HOUSE OF LORDS [1927] :

H. L. (E.) not given the defendant her costs, counsel for the respondent
1927. +insisted on "' the general rule that there could not be an
Donatp appeal for costs only' ; but Lord Hardwicke L.C. allowed the
Camere appeal, saying that the creditor was clearly entitled to his
Porrax, costs on the merits "'if not precluded by that rule; which
= I have often heard so delivered by the Court. 'The foundation
of it,' he added, '' was to prevent vexation and trouble ;
for as cases in equity often depend on abundance of circum- -
stances, about which as the reason of mankind might differ,
it would create perpetual appeals: but this is no printed
rule; and it seems somewhat strict and hard to adhere to
it; for since the stamp duties, costs come to be very material.
Yet if it was to be laid open generally, that an appeal might
be for costs, it would cause that general inconvenience, to
which a particular inconvenience ought to give way. But
if a sound distinction from the rule can be made, it ought
to be allowed: and it will be very unfortunate if in this case
the defendant should be precluded thereby; for being an
incumbrancer for a just debt, and having a lien on the estate
for her costs as well as her demand; it seems to be an
exception, and different from the Court's not suffering matters
to be overruled merely for costs." In Cowper v. Scott (1)
the Lord Keeper (Lord Northington) said that an appeal
or rehearing for costs only was not to be encouraged, —
"because costs are merely discretionary, and depending
upon particular circumstances; and when a judge has once
determined the matter, a rehearing for costs should be
admitted with great caution"; but upon the authority of
Owen v. Griffith (2) he allowed the appeal. In Wirdman v.
Kent (3) Lord Thurlow L.C. is reported to have said that
the appeal in Owen v. Griffith (2) was admitted upon such
an apparent mistake that upon motion for enrolment the
minutes of the decree would have been altered; but (as
the editor of Brown's Reports points out) Lord Thurlow can
hardly have said this, as Lord Hardwicke clearly treated the
case of an execution creditor as a sound exception to the rule.

(1) 1 Eden, 17, 18. (2) 1 Ves. Sen. 250.
(3) 1 Bro. C. C. 140.

Viscount Cave
L.C.

|

| A. C. AND PRIVY COUNCIL.

I turn now to the cases which were cited in the argument
on this appeal. In Fitzgibbon v. Scanlan (1) the appellant,
although unsuccessful on the merits, was relieved of some of
the costs thrown upon him by the order below; and Lord
Eldon said that, "' although an appeal would not be received
merely on the subject of costs, yet it did not follow but the
article of costs might be taken into consideration when there
was an appeal respecting other matters." In J'od v. Tod (2),
where there was a cross-appeal as to costs only, Lord Eldon
said that this House never entertained an appeal for costs
"" where costs are in the discretion of the Court below "';
but the appellant in the cross-appeal, who was entitled by
statute to his costs, succeeded in his appeal. In Burkett v.
Spray (3) a decree was varied on appeal as to costs only,
Lord Lyndhurst saying that "an appeal would lie in respect
of costs, if any principle were involved, and they were not
merely given as consequential on the decree.' In Brodie
v. Sinclair (4), where a pursuer who had succeeded as to
a part of his claim had been ordered to pay the defender's
costs of suit on the ground "that the expense of litigation
in this case had been mainly, if not altogether, occasioned
by the pursuer insisting for the other items in the account
which had not been sustained,' this House set aside that
part of the decree, Lord Brougham L.C. saying: "It
is quite true that the costs are in the discretion of
the Court in all cases, but I find there is no such rule
as that assumed for the interlocutor." In Inglis v.
Mansfield (5) the appeal failed on merits, but the appellant
was relieved of the costs thrown upon him by the
judgment, and Lord Brougham said: '" The rule with respect
to costs in this House, as well as in the Privy Council and
the Court of Chancery, is, that you cannot appeal for costs
alone; but you can bring an appeal on the merits; and if
that is not a colourable ground of appeal for the purpose
of introducing the question of costs to the Court called upon

(1) 1 Dow, 261, 270. (3) (1829) 1 Russ. & My. 113.
(2) 2 W. & S. 542. (4) (1831) 5 W. & S. 567, 568.
(5) 3 Cl. & F. 362, 371.

743

H. L. (E.)
1927

ae
DoNALD
CAMPBELL
& Co.
v.
PoLuak.

Viscount Cave
L.C.

744

H. L. (E.)
1927
Dona

CAMPBELL
& Co.

v.
POLLAK.

Viscount Cave
L.C.

HOUSE OF LORDS [1927]

to review the case, the Court of Review will treat that, not
as an appeal for costs, but will, in affirming the judgment
given in the Court below, consider the question of costs as
if it is fairly raised." In Clyne's Trustees v. Dunnet (1)
Lord Cottenham used similar expressions, but said that the
order of the Court below as to costs was right. In Angell v.
Davis (2), where a decree had been made giving a trustee
his costs of the cause out of the estate, Lord Cottenham,
relying on Owen v. Griffith (3); Cowper v. Scott (4); and
Burkett v. Spray (5), allowed an appeal by the beneficiaries
against that part of the decree, and ordered the trustee to pay
the costs of the cause so far as they had been occasioned by his
own misconduct. In Home v. Pringle (6) the House dismissed
an appeal by trustees claiming to be entitled to their costs,
Lord Cottenham saying: "'A Court of Appeal does not
interfere in the question of costs without reluctance in any
case, and generally will not entertain an appeal for costs
alone."

I pass to the more recent cases, and first to Wilson v. The
Queen. (7) In that case one of the appellants (Cole) appealed
to the Queen in Council against a decree of the Admiralty
judge at Sierra Leone on the ground that, although he had
succeeded in the Court below, he had not been awarded the
costs of the proceedings; and Lord Cairns said: '" Their
Lordships are of opinion that, with regard to the appellant
Cole, the appeal is strictly and simply one for costs, under
circumstances in which their Lordships have at all times
laid down as a rule, that an appeal for costs could not be
entertained." The order for costs which was the subject
of appeal was clearly discretionary. In Yeo v. Tatem (8),
an action in the Admiralty Court for damages caused by
collision, the defendants pleaded a general denial and also
a special defence founded on the doctrine of res judicata.
On evidence that the damage had been caused by a third

(1) Macl. & R. 28. (5) 1 Russ. & My. 113.
(2) (1839) 4 My. & Cr. 360. (6) 8 Cl. & F. 264, 293.
(3) 1 Ves. Sen. 250. (7) L. R. 1 P. C. 405, 408.
(4) 1 Eden, 18. (8) L. R. 3 P. C. 696, 702.

a ae AND PRIVY COUNCIL.

party the Court gave judgment for the defendants without
costs, and declined to go into the special defence. On an
appeal by the defendants to the Judicial Committee, it was
held that, although the issue on the special defence had
become material only as regards costs, the appellants were
entitled to have judgment upon it and to have the general
costs of the action. The appeal was accordingly allowed ;
and Sir Joseph Napier, who delivered the judgment of the
Board, said: "Their Lordships do not mean to question
or recede from the decisions that have been pronounced
regarding not allowing an appeal for costs, but where there
has been a mistake upon some matter of law that governs
or affects costs—some matter that involves the due application
of principles of law—the party prejudiced is entitled to have
the benefit of correction by appeal." This was a plain case
of an appeal on a point affecting costs only, and the appeal
was allowed. The same may be said of Garnett v. Bradley (1),
where, the plaintiff in an action for slander tried with a jury
having recovered only one farthing damages, the Court of
Appeal had held that under the statute 21 Jac. 1, c. 16, he
was not entitled to the costs of the action; but the House
of Lords, holding that the statute of James I. had in effect
been repealed by Order Lv., gave him his costs. In that
case the issue upon merits had been finally determined by
the verdict of the jury and the judgment in the action, and
the appeal to this House was plainly as to costs only; but
it was not suggested that it was incompetent. In Metropolitan
Asylum District Managers v. Hill (2) it was held that an
order of the Court of Appeal which imposed, as a condition
for a new trial, the payment of the costs of the first trial
was not an appeal in respect of costs only and ought,
therefore, to be entertained; and Lord Selborne stated
the rule as follows: 'The rule, subject to certain
exceptions, is established, that an appeal is not to be
allowed in respect of costs only; which means _ that
when the merits of a question have been determined,
and when a Court has thought fit to give or refuse
(1) 3 App. Cas. 944. (2) 5 App. Cas. 582, 584.
An C1927: 3 3 E

745

H. L. (E.)
1927

ea ash
DoNALD
CAMPBELL
& Co.
v.
PoLuak.

Viscount Cave
L.C.

746 HOUSE OF LORDS [1927]

H. L. (E.) costs, in the exercise of its discretion, and in the absence
1927 of any settled principle upon the subject, the Courts of Appeal
Doxanp must give so much credit to the exercise of that discretion
oes 'Co. as not to allow the merits, when they are no longer in
Potrax, Controversy, to be again gone over with great expenditure,
Viscount Cave NOt only of money but also of judicial time, for the mere
= purpose of reviewing that discretion."" No doubt the appeal
in that case was not in respect of costs only, but was an
appeal against a refusal to make an unconditional order
for a new trial; but the language of Lord Selborne is interesting
as showing the origin and meaning of the rule under discussion.
In Huzaley v. West London Extension Ry. Co. (1) an appeal
as to costs only was entertained, the question argued being
whether there was "good cause"' for depriving a litigant
of costs under Order Lxv., r. 1, but the decision of the Court
of Appeal on this point was affirmed. Lastly, in Rieken v.
Yorke Peninsular Justices (2), the Judicial Committee dis-
allowed. an appeal against an order as to costs on the ground
that the Court in Australia had exercised a judicial discretion

and that there had been no mistake of law.

As reliance has been placed upon a decision of the Appeal
Committee established by Lord Eldon in the year 1812, it may
be convenient to refer to a few decisions of that committee
to which my attention has been called by the Judicial
Department of the House. In Robertson v. Tait (1852) an
appeal as to costs only was dismissed as incompetent, and Lord
St. Leonards L.C. said: "' The rule, I apprehend, both here
and in the Courts below, is that you cannot appeal for costs
generally. If the question of costs involves a serious question
of law, then, although you only go for costs, the appeal may
be sustained, because in that appeal it may be necessary
to decide a question of law. Now here what has been stated.
shows .... what the general rule is; but it is equally clear
that it is not a binding or positive rule." In Marquess of
Ailsa v. Kerr (1853) an appeal as to costs only was dismissed,
the Lord Chancellor (Lord Cranworth) saying: '" You cannot
have an appeal on the subject of costs where, the decree

(1) 14 App. Cas. 26. (2) [1908] A. C. 454.

A. C. AND PRIVY COUNCIL.

being otherwise right, the discretion of the Court is exercised
wrongly upon the subject of costs. .... " In Sawers v.
Monteith (1869), on an appeal against a discretionary order
as to costs, Lord Hatherley said: "The appeal upon costs
only we do not proceed with." Again, in Thallon v. Kinnear
Moode & Co. (1884), an appeal against a discretionary order
as to costs was dismissed as incompetent. Lastly, in
Caledonian Ry. Co. v. Barrie (briefly reported in [1903]
A. C. 126) the respondent petitioned against the competency
of an appeal on two grounds: first, that it was an appeal
on costs only; and, secondly, that under the statute which
was there in question an appeal would only lie on a question
of law. The Appeal Committee dismissed the appeal, Lord
Macnaghten saying (as appears from the shorthand note) :
"Their Lordships are of opinion that the objection is a good
one and must prevail." It does not clearly appear on which
of the two grounds the appeal was dismissed; and, in any
event, the order as to costs made by the Court below was a
discretionary order, the Court of Session having a very wide
discretion as to costs. There is, therefore, not much to be
learned from this decision.

My Lords, I have gone through this long succession of
cases only for the purpose of ascertaining what is the precise
rule which has been laid down by this House; for I agree
that, if a rule of practice exists, it ought not now to be dis-
turbed, and that the rule (whatever it may be) was not abro-
gated by s. 3 of the Judicature Act, 1876. The result of my
examination appears to me to be (1.) that there is no universal
rule that an appeal as to costs only will not be entertained
by this House, but the true rule is as stated by Lord North-
ington in Cowper v. Scott (1), by Lord Eldon in Tod v. Tod (2),
and by Lord Selborne in Metropolitan Asylum District
Managers v. Hill (3), as well as by Sir Joseph Napier in the
Judicial Committee and by Lord St. Leonards and Lord
Cranworth in the Appeal Committee; and accordingly (2.) that
in this House, as in the Court of Appeal, an appeal from

(1) 1 Eden, 18. (2) 2 W. & §. 542.
(3) 5 App. Cas. 582.
3 3 E 2

747

H. L. (E.)
1927

DONALD
CAMPBELL
& Co.

v.
POLLAK.
Viscount Cave
L.C.

748

H. L. (E.)

DONALD
CAMPBELL
& Co.
Vv.
POLLAK.

Viscount Cave
L.C.

HOUSE OF LORDS [1927]

a discretionary order as to costs will not be received, except,
perhaps, in cases where there is also a bona fide appeal on
merits ; but (3.) that when it is alleged that the Court
of Appeal in dealing with costs has fallen into error on a
point of law which governs or affects costs, an appeal
on that question will be heard. There are (as will have
been seen) many cases in which an appeal under those
conditions has been entertained, and there is no case
in which such an appeal has been held to be
incompetent.

If this be the true view, then it is plain that the pees
in the present case, in which the exercise by the trial judge
of his statutory discretion as to costs has been set aside by
the Court of Appeal on legal grounds, ought to be allowed
to proceed. I therefore move your Lordships that the pre-
liminary objection to this appeal be disallowed, and that the
costs of and consequent upon that objection be paid by the
respondent in any event.

Viscount HaLpANE (read by Lorp Carson). My Lords,
the point with which we are at present concerned in this case
is whether an appeal lies to this House from a judgment of
the Court of Appeal. That Court had varied a judgment of
Branson J. in favour of the respondent, the defendant in
an action tried by the learned judge without a jury, for
damages in respect of alleged breach of contract and fraud.
Branson J. had deprived the respondent of costs, amounting
to a large sum, in the exercise of what he considered to be the
discretion he could exercise. The Court of Appeal altered
this, directing that the judgment in favour of the respondent
should carry costs. Assuming for the purposes of the present
question that the appellants may develop a substantial
case in support of the decision of the trial judge depriving
the successful defendant of his prima facie title to his
costs, there remains a preliminary question which has
to be decided at this stage of the appeal to your
Lordships' House. It is whether the appeal, which is
limited exclusively to the question of these costs, is

A. C. AND PRIVY COUNCIL.

749

one which, according to the principle that regulates our H. L. (E.)

practice, can be entertained at all. When a trial takes
place without a jury the costs, under s. 5 of the Judicature
Act, 1890, and Order txv., r. 1, are in the discretion of the
trial] judge, and under s. 49 of the Judicature Act, 1873, there
is to be no appeal from the exercise of this discretion except
by leave of the judge who made the order. Nevertheless the
respondent appealed against the order without leave, and
succeeded in the Court of Appeal, upon the ground that the
judge had no right in law to make it for the reason he did.
Branson J., in deciding not to allow costs to the defendant,
relied on the circumstance that the verdict and judgment
in another action against the defendant, in which the plaintiffs
were different persons from the appellants, the plaintiffs in
the present case, established facts which justified the liquidator
of the appellant company in the execution of his duty in
bringing the present action. But the Court of Appeal, holding
that Branson J. was not entitled to take into account the
proceedings in a different case with different parties, considered
that the learned judge had not proper materials before him
on which he was at liberty to exercise his discretion under
the rule as to costs.

The question we have to deal with presents this peculiarity.
The appeal to the Court of Appeal was brought without leave.
This may have been legitimate on the ground that the judge
was said to have been without a reason on which to proceed
legitimately in the way he did. But it seems curious that
if that were so an appeal to this House raising what seems to
be a precisely analogous question should be incompetent.
If it is so this must be for some special reason which has
been definitely established by this House in relation to its
own proceedings, and which goes beyond the principle applied
in the Court of Appeal. It seems as though it must be shown
that this House is precluded by its established decisions from
entertaining an appeal which relates exclusively to costs
given by the Court below in the exercise of its discretion,
even when the exercise of that discretion has arisen out of
error about matter of law.

1927
ad
DONALD
CAMPBELL
& Co.

Uv.
POLLAK.

Viscount
Haldane.

750

H. L. (E.)
1927

ek
DONALD
CAMPBELL
& Co.
v.
POLLAK.

Viscount
Haldane.

HOUSE OF LORDS [1927]

This question is one the answer to which must be collected
from a study of the authorities. It is not enough that s. 3
of the Appellate Jurisdiction Act of 1876 gives in general
terms a right of appeal from the Court of Appeal to this
House. The general words employed in this section may
not be sufficient to interfere with the special practice of this
House if such a practice is established. What the section
was directed to was to get rid of the repeal of appellate
jurisdiction effected by a statute of 1873, and not to the
alteration of the settled practice where jurisdiction existed.

When the authorities are examined they disclose, what is
apt to happen unless a very definite principle is being enun-
ciated, a certain vagueness in judicial statement. Where a
rule is laid down it is sometimes qualified by exceptions which
are vaguely expressed. If, however, the cases are read as a
connected series of utterances the result seems to me to admit
of two different contentions. One is that it is established
that when an appeal to the House of Lords resolves itself
into a question only of costs the House will refuse to entertain
it. It is added that this refusal is not confined to cases where
discretionary costs have been dealt with below in accordance
with an exercise of a discretion conferred and not infringing
any principle of law. It is said that costs can be dealt with
where they are ancillary to a variation of the substance of a
judgment, but that otherwise there is no power to deal with
them unless the case comes within certain nominate excep-
tions referred to in the course of the discussion. In effect
these are said to be: (1.) instances in which the order as to
costs has been made personally against parties who have as
matter of law a right to be exempted from them, such as
trustees and mortgagees ; (2.) instances in which costs have
been ordered to be paid out of a particular property to the
prejudice of persons interested in it and not before the Court ;
(3.) instances in which a statutory or analogous legal title
has been disregarded. All of these are exceptions in which
a substantive right is said to have been violated, as dis-
tinguished from cases in which it is claimed that there has
been what is merely a non-judicial and in that restricted

A. C. AND PRIVY COUNCIL.

751

sense improper exercise of the function of the judge to the H. L. (E.)

appellant's disadvantage. Mere error in law not of a special
character is accordingly in this view not enough to give
ground for an appeal.

The observation at once occurs that the exceptions which
the authorities relied on for this conclusion illustrate are
upon this interpretation of the restriction curiously limited
in nature and unconnected in character. So far as they go
they certainly do not give ground for the assertion of a more
general principle, such as that this House will make an excep-
tion to the rule against hearing an appeal against a mere
award. of costs where any general principle of law has been
disregarded.

Speaking for myself, after examination of the authorities,
I do not think that they establish the list of exceptions
collected. above as an exhaustive list. If an order as to costs
were, for example, made without jurisdiction, I do not think
that they show that there could be no appeal to get rid of
the illegality committed. Surely the burden lies heavily on
those who assert that this House has precluded itself by its
decisions from entertaining such an appeal, and from dealing
in this case with such a decision of the Court of Appeal based
on want of jurisdiction, as freely as that Court dealt with
the decision of Branson J.

The second and alternative interpretation of the scope of
the authorities admits of this. It concedes that the settled
practice of this House, and indeed of the higher Courts of
Appeal in England generally, is to refuse to admit appeals
as to costs alone where these have been disposed of by the
Court below as matter of discretion. But as to what is an
exercise of mere discretion and what is in reality a declaration
based on imagined legal principle is not so clear. In 1749,
when Lord Hardwicke was laying the foundations of the
modern system of equity procedure, he laid down a principle
which admits of costs under certain conditions being made
the subject of appeal. He said of the rule that there cannot
be an appeal for costs only, that it was "no printed rule,"
and that while it was for the general convenience that the

1927
ey
DoNALD
CAMPBELL
& Co.

v.
POLLAK.
Viscount
Haldane.

752

H. L. (E.)
1927

——
DONALD
CAMPBELL
& Co.

v
POLLAK.
Viscount
Haldane.

HOUSE OF LORDS [1927]

rule should be maintained, a sound distinction where it could
be made ought to be allowed. That was in Owen v. Griffith. (1)
I cite the case, not as fully defining the principle as it exists
to-day, but as showing that in the days when it was being
developed its non-rigid character was emphasized. In
inquiries into the origin and scope of rules of practice of this
kind a genetic method seems essential.

Pursuing this method, the conclusion to which the language
of the leading authorities seems to point is that where a dis-
cretion as to costs has been exercised on material that is
illegitimate or is non-existent, or in violation of some principle
of substantive right, an appeal will be entertained. Turning
first to the question as it stands to-day in the Court of Appeal,
I think that this is established there. That it should be so is
important, for the restriction on appeals for costs as stated
in the decisions of this House is not stated as though it were
the outcome of a principle which is peculiar to the House.
In Civil Service Co-operative Society v. General Steam Naviga-
tion Co. (2) the plaintiffs sued to recover money paid on a
consideration that had failed. The learned judge who heard
the case gave judgment for the defendants, but as they would
not accept suggestions made by him for a settlement he
deprived them of their costs. They appealed, and the Court
of Appeal said that there were no materials before the judge
upon which he could legitimately exercise a discretion to
this effect, and that accordingly he had no power to make
the order. '' No doubt," said Lord Halsbury, who presided
at the hearing, "' where a judge has exercised his discretion
upon certain materials which are before him, it may not be,
and I think is not, within the power of the Court of Appeal
to overrule that exercise of discretion. But the necessary
hypothesis of the existence of materials upon which the
discretion can be exercised, must be satisfied."" Why is this
principle not applicable to appeals to this House ? No doubt
your Lordships have power to define the conditions on which
such appeals are to be allowed. But have you done so in
such a fashion as to exclude appeals as to costs when the

(1) 1 Ves. Sen. 250. (2) [1903] 2 K. B. 756, 765.

A. C. AND PRIVY COUNCIL.

753

discretion has been exercised in a way which is alleged to be H. L. (E.)

contrary to the law? Certainly Lord Hardwicke did not
say so. In Hualey v. West London Extension Ry. Co. (1)
the question which arose related to another part of the Order,
which enabled the trial judge to direct that where he found
"good cause" the costs were not to follow the event, as
was to be the normal course where the trial was with a jury.
It was said here, that where the discretionary power to deprive
of costs for good cause had been duly exercised, that exercise
was not to be subject to any review. And it was also said
by the House that not any reason which may have been
assigned for disallowing the costs of a party who had been
successful in getting a verdict must necessarily be accepted
as good cause. If the trial judge gives effect to considera-
tions which do not constitute "good cause"' his decision is
not protected from review. The House therefore listened to
an appeal which was only concerned with costs.

My Lords, there are observations in Metropolitan Asylum
District Managers v. Hill (2) which appear to me to be only
consistent with the view I have preferred, and in Yeo v.
T'atem (3) that view was distinctly enunciated in the judgment
delivered for the Judicial Committee of the Privy Council
by Sir Joseph Napier. In the hearing of that case James
and Mellish L.JJ., both great authorities on the old general
practice, took part.

The decision of the Appeal Committee in Caledonian Ry.
Co. v. Barrie was cited in support of the contrary general
proposition that the House will not entertain an appeal
against costs only. That case is briefly reported in [1903]
A. C. 126, but it was not a decision of the House, and no
reasons are given, and it is not clear that the preliminary
question may not, in reality, have turned equally on the
provision of the Judicature Act of Scotland, which confines
appeals to this House in cases commenced in the Sheriff's
Court to matters of law alone. I find myself unable to treat
this imperfectly reported case before the Appeal Committee

(1) 14 App. Cas. 26. (2) 5 App. Cas. 582.
(3) L. R. 3 P. C. 696, 702.

1927
Ww
DONALD
CAMPBELL
& Co.

v.
PoLLak.

Viscount
Haldane.

754 HOUSE OF LORDS [1927]

H. L. (E.) as having been intended to overrule, or as having been
1927 capable of overruling deliberately, the principle underlying

Donarp the other decisions to which I have referred. There are
oe oe further decisions which support the view I have expressed,
Bre ag but on these I do not think it necessary to enter, because

Vioomt they have been referred to by the Lord Chancellor, in whose
Haldane. analysis of them I concur. I think, with him, that when
the right to costs, or the existence of a discretion as to costs,
depends on the decision of a question of law or procedure,
an appeal on that question will be heard. The general rule
against appeals as to costs is, as Lord Hardwicke said as
long ago as 1749, a "' paper rule," in the sense that it is
a prima facie statement capable of being displaced in
this way.
I therefore think that the respondent is not entitled to
succeed upon his present contention.

Viscount DunEpIn. My Lords, before forming my opinion
in this case I had the great advantage of perusing the opinions
of the noble Lords who had heard the case on the former
occasion. These opinions being equally divided were a sure
proof that the case was not easy of determination, and I
therefore think that no apology is needed for saying that
my opinion has not been arrived at without much thought
and, hesitation. The opinions to which I have referred have
so thoroughly analysed the numerous decided cases that it
would be quite useless to do so again. I shall, therefore,
in the remarks I venture to address to your Lordships, assume
complete familiarity with the facts of the case and with the
many decisions. I have myself come to the conclusion that
it is not possible to say that this House has in terms laid down
a rule which will settle this case. I do not think that that
is a matter of great surprise, because I think it is plain that
the precise question could not have arisen before the
Judicature Act, and since then no case which raises the point
has reached your Lordships' House. It follows that our
duty now is to lay down the rule which is to guide future
practice.

A. C. AND PRIVY COUNCIL.

755

It was natural that one should search with avidity for a H. L. (E.)

precise decision which settled the matter. At one time
during the discussion I thought I had found such a case in
Caledonian Ry. Co. v. Barrie (1), but on further reflection
I felt that this was not so. In the present case the Court
of Appeal has altered the judgment of the trial judge as to
costs, because it considered that the trial judge had been
influenced by evidence which was not legally before him.
They could not, no leave to appeal as to costs having been
either asked for or given by the trial judge, under the terms
of s. 49 of the Judicature Act, 1873, simply apply their own
discretion to the point of whether the costs should be allowed
or not. In Barrie's case the Inner House of the Court of
Session, who have, by Scottish law and practice, just as full
discretion as the judge or judges whose judgments they are
reviewing, did look, as they were entitled to look, to certain
evidence, and on their view of it came to the conclusion that
the judge from whom the appeal came had been right. The
result, so far as appeal to this House is concerned, would
have been the same if they had held he was wrong.

The nearest approach to a general rule, indeed so far as
expression is concerned it might be taken as a general rule, is,
in my opinion, what Lord Watson said in the case of Metro-
politan Asylum District Managers v. Hill (2): " I quite concede
the propriety of the rule that the Court of last resort ought
not to entertain an appeal which involves nothing but the
payment of costs, but it appears to me that that rule is limited
to the case where the whole merits of the action or cause
have been determined, and where the judges who have
decided, the cause have applied their minds to the right of the
parties to receive an award of costs, looking to the whole
circumstances and, the conduct of the case ; because it must be
kept in view that the right to costs does not, in most cases,
merely depend upon the merits of the cause as finally decided,
but may, to a very great extent, depend upon the mode in
which it has been conducted throughout by the parties."

(1) [1903] A. C. 136 ; in the Inner House of the Court of Session, 5 F'. 30.
(2) 5 App. Cas. 582, 586.

DONALD
CAMPBELL
& Co.

v.
POLLAK.
Viscount
Dunedin.

756

HOUSE OF LORDS [1927]

H. L. (E.) It would, however, have been, I think, impossible in view of

-——
DONALD
CAMPBELL
& Co.

v.
POLLAK.

Viscount
Dunedin.

the numerous judgments and the varying forms of expression
contained therein to pick out the dictum of one judge and
say it settled the rule as laid down by this House. It
follows, in my view, that your Lordships have now for the
first time to lay down the rule by an _ authoritative
judgment.

Now before stating what I think the rule should be I wish
to state a preliminary proposition. It has not strictly to do
with the rule, but I think it is necessary before going to the
rule. That proposition is that if in any case the merits are
raised by a competent appeal before this House, raised bona
fide and not merely colourably with a further intent, then,
however infinitesimal the pecuniary value of the merits
may be in comparison with the pecuniary value of the
costs, yet appeal will lie, and the costs may be dealt with
with a free hand.

I come now to the rule when the appeal is for costs alone,
It is to be remembered that the appeal is always from a
Court of Appeal, and it is that judgment which is to be held
appealable or not. What has happened in the former stages
is, for the moment, immaterial. Further, I am using the
words " costs alone " as meaning when the costs are the only
stake. I am not for a moment saying that these words have
always been so used by others, but I am using them in that
sense, and in so doing I am, I think, doing the same as Lord
Watson when he spoke of nothing but the judgment of costs
being involved.

The rules I would wish to lay down are these. Appeal
will lie :—

1. If an express statutory provision applies and it can be
shown that the Court of Appeal has disregarded it. An
illustration may be found in the case of T'od v. Tod. (1)

2. If a rule of law and not mere discretion could decide
the question. Illustration : Lord Advocate v. Lord Dunglas (2)
and Hualey v. West London Extension Ry. Co. (3)

(1) 2 W. & S. 549. (2)'9 Cl & EF. 173:
(3) 14 App. Cas. 26.

|
i

SS

f A. C. AND PRIVY COUNCIL.

757

3. If the Court of Appeal has based its judgment on a H. L. (E.)

point of law which may or may not be erroneous. Illustration :
the present case.

In all other cases no appeal will lie.

I do not fancy there is any controversy as to the soundness
of my first two rules. It is the third that is controverted.
My Lords, I confess I think the justification of the third is
that without it there would be grave injustice done. The
position under the Judicature Act of the Court of Appeal

is very peculiar. When an appeal comes to them as to costs

awarded by the discretion of a judge, they cannot exercise
their discretion instead of his unless leave to appeal from his
order as to costs has been given by him. By a long series
of decisions the Court of Appeal has held that that does not
prevent them upsetting what the judge has done if they can
find that he had no proper materials on which his discretion
was exercised. Having so found, it strictly becomes the duty
of the Court of Appeal to refer the matter back to the judge
for a proper exercise by him of his discretion as to costs. It
may be doubtful whether this view is sound, but it has been

- acted on so consistently and so long that, being, after all, a

question of procedure, your Lordships would not now wish to
interfere with it. Nothing would suit the appellants better
than if you could, for the judgment of the Court of Appeal
would simply disappear and Branson J.'s judgment would
stand. But, as it is, it would surely be very unjust that the
respondent here could get rid of the trial judge's judgment
upon the point of law that he had considered matter which
it was illegitimate for him to consider, and that then that
view could not be overruled if erroneous by this House. This
House is then revising not a discretion but a legal opinion
that no discretion had been exercised. I am, therefore, of
opinion that the appeal in this case is competent.

Viscount SuMNER (read by Viscount DuNeEpDIN). My
Lords, on both the occasions when this preliminary objection
has been argued at the Bar, the question has been, as I under-
stood, whether any rule of this House existed which limited

1927
-——~
DoNnaLpD
CAMPBELL
& Co.

Vv
PoLLaK.
Viscount
Dunedin.

758 HOUSE OF LORDS [1927]

H. L. (E.) the competence of appeals for costs and, if so, how that rule
i927. had been defined by your Lordships' predecessors. On neither

a . . .
Donarp was there question of laying down a new rule, except in so

eee 'Co. far as the application of an old rule to new circumstances
Potrax, may itself be said to renew it. I think it is necessary to note
pe this, because there is a singular lack of decided cases on the

Sumner. point in this century, and the precise issue raised in this
appeal could not have arisen before the orders and rules of
1875, and could not previously have been contemplated even
constructively. This appeal really rests upon authorities
decided in the Court of Appeal upon the meaning and effect
of the Judicature Act and the order and rules made under it
on the subject of costs, where there has not been a trial by
jury. There has been no case in this House upon that effect
of the rules, for I am convinced that Hualey v. West London
Ry. Co. (1), whatever bearing it may have, is not now decisive.
If it were, why have the older authorities been reviewed
at all? To this case I must return later.

My Lords, after the first argument I examined as exhaus-
tively as I could the cases before this House and the Appeal
Committee, both reported and unreported, which seemed to
touch the point, and also the cases 'on costs in the Privy
Council, and I submitted to your Lordships a detailed state-
ment of them, on whichever side they appeared to be,
with the conclusions that I drew. These have not found any
favour with your Lordships, and it would only be tiresome
to examine all the cases again. As, however, the second
argument has only confirmed my former view, and as it would
be discourteous to dissent from your Lordships' better judg-
ment without assigning reasons, I ask leave to trespass on
your Lordships' time with a statement of the results of my
examination of the cases and some observations on the
present position of this appeal.

A hundred years ago the practice of the House as to appeals
for costs only was not new, but it had not been formulated in
published reports and decisions, still less in any regulation
of the House itself. The general subject, especially as it was

(1) 14 App. Cas. 26.

A. C. AND PRIVY COUNCIL.

dealt with in Chancery, was familiar, and the distinction H. L. (E.)

between costs, as to which certain persons had vested rights,
and costs, which were entirely in the discretion of the Court,
was well known. Still the question, whether and if so under
what circumstances costs, which were in the discretion of
the Court, constituted appealable subject-matter, was not and.
could not be a matter of general principle. In the absence
of statutory regulation it was a matter of practice to be settled
by the tribunal of the proposed appeal alone. In the case
of an appeal to the House of Lords this practice derived its
authority from the House. The rules adopted by the Privy
Council or on a rehearing in Chancery might be known to be
like those adopted by the House, and to the extent of that
similarity might be contemporary evidence to show what the
rule of the House was, but they could not even indirectly
govern or prescribe it. It is not as though a uniform and
consolidated body of rules had been laid down for the three
tribunals, so that a case in the one would be any authority as
to the practice of another. If this is right, the crucial exam-
ination of the decided cases is considerably limited in its scope.

Looking then at the opinions expressed by noble and
learned Lords and the decisions of the House thereafter
arrived at, there is abundant evidence that the formula
"no appeal as to costs only " was regarded as a sufficient, if
loose, description of the rule, and that, understanding the
costs in question to have been costs in the discretion of the
Court below, there is no adequate authority for treating that
rule as doubtful or as admitting of fresh exceptions. The
reported cases show very early, that "costs " in this formula
did not mean all or any costs, but only costs that had been
in the discretion of the Court below. Step by step costs
given by statute, costs of trustees, and costs of incumbrancers
by way of mortgage or otherwise, were decided to be outside
the rule. They were the subjects, respectively, of rights
by law vested in certain parties antecedently to and inde-
pendently of any Court's exercise of its discretion in their
favour. On similar grounds the immunity of the Crown
from having to pay costs constituted another vested exception,

DoNALD
CAMPBELL
& Co.

Ve
POLLAK.
Viscount
Sumner.

9

760 HOUSE OF LORDS [1927]

H. L. (E.) but these cases lend no aid to the contention, that costs
1927 become an exception to this rule of incompetence, whenever
Doxarp the discussion of the order below involves what is called a
bare a ae "question of law." I think this has never been decided,
Porax, #nd the dicta most favourable to the appellant fall far short
Vicor Of it. Lord St. Leonards leaves it in doubt whether it is
Sumner. _ypon the emergence of any question of law or only of a serious
one, that the competence of an appeal as to costs depends :
Robertson v. Tait. Lord Cranworth's language would seem

to show that, for a wrong exercise of discretion as to costs,

there can in no case be an appeal: Marquess of Ailsa v. Kerr;

and Lord Selborne, on the other hand: Metropolitan Asylum

District Managers v. Hill (1), appears to be content with the

vague statement that discretion is not interfered with

"in the absence of any settled principle upon _ the
subject," whatever that may mean. His words should

be read in connection with those of Lord Blackburn

and Lord Watson in the same case, by which I think

they are considerably limited. On the facts of that

case, however, the question was not one of disregard

of a settled principle as to the grant or refusal of costs, but

of an order regarding the allowance of an appeal on the merits,

which the Court of Appeal had clearly no jurisdiction to make.

The House has so often declared in terms that an appeal as

to discretionary costs is incompetent and will not be proceeded

with, and has so often dismissed appeals accordingly, that

the appellants' argument ought not to be that Hualey's

case (2) was a case as to discretionary costs, and is therefore

in point, but that their own appeal is one as to jurisdiction,

like Huxley's case (2), and is governed by it for that reason,

which I have not understood them to allege. With the very
doubtful exception of Brodie v. Sinclair (3) I have not found

any case, in which your Lordships' House has entertained

or allowed an appeal as to discretionary costs only, without

some addition of the merits of the cause or of a question of
jurisdiction or vested legal right. In Brodie's case (3) the

(1) 5 App. Cas. 582, 584. (2) 14 App. Cas. 26.
(3) 5 W. & S. 567.

| A. C. AND PRIVY COUNCIL.

761

appellant had succeeded at the trial, though not as to all H. L. (E.)

the items, and had been ordered, nevertheless, to pay all the
unsuccessful defender's costs. Some rule of Scottish law
was apparently vouched in justification of this singular order.
Lord Brougham L.C., after inquiry, satisfied himself that
there was no such rule, and accordingly the appeal succeeded.
Here again the Court below had disregarded the pursuer's

legal right, which was not to be compelled to indemnify

another for outlay neither incurred at his request nor necessi-
tated by his breach of the law. The rule has been repeatedly
stated (e.g., Futzgibbon v. Scanlan (1)), that, if a question on
the merits be appealed, provided it be raised genuinely and
not merely colourably, the House will hold itself free to modify
the order made as to costs below, even if it dismisses the
appeal on the merits. I cannot think that such a rule was

- needed, or would have been laid down, if the real mind of the

House was that even discretionary costs could be made the
subject of an appeal by themselves, if any question of law
was added or involved. If this was the latent rule of the
House, it already included their patent but narrower rule,
and this express statement of it was merely otiose and
confusing.

My Lords, in 1835, Inglis v. Mansfield (2), Lord Brougham
is reported as having said that the Privy Council rule and
the rule in Chancery too were then the same as that in the
House of Lords. How this may have been it is hard to tell,
for, scanty as are the reported decisions on the subject in
the House of Lords before that date, in the Privy Council
I think there is hardly one. The later decisions we must
read for ourselves. I wish to make one general remark as
to the Privy Council cases, which is equally applicable to the
review of causes in Chancery. In the latter Court always,
and in the Privy Council often, the appeal is a first and only
appeal. In the case of the Privy Council the appeal is not
infrequently from Vice-Admiralty Courts abroad or from
Courts of Ecclesiastical Jurisdiction in England. It may
well be that, for that reason, the Judicial Committee's general

(1) 1 Dow, 261, 270. (2) 3CL. & F. 362.
y. an On 0S) 3 3 F

1927
=
DONALD
CAMPBELL
& Co.
Vv.
POLLAK.
Viscount
Sumner.

762

HOUSE OF LORDS [1927]

H. L. (E.) rule against appeals for costs only should be less strict than

1927

WwW
DonALD
CAMPBELL
& Co.

Vv.
POLLAK.
Viscount
Sumner.

in the case of your Lordships' House, which is always a tribunal
at least of second appeal. I cannot help thinking that this
is a material consideration. Test it thus. If Mr. Pollak's
appeal had failed in the Court of Appeal, how would a second
appeal to this House have been regarded then ?

The case of Yeo v. Tatem (1) has been much relied on by
the appellants. It is true that it is a case in which the
immediate benefit to be derived from the appeal was to get
an order for payment of costs, but I do not think that no
other matter than a right to costs was involved in it.
Sir Joseph Napier's words show that the appeal was taken
out of the general rule against allowing appeals for costs
only, because there had been a mistake upon some matter of
law, which governed or affected costs or involved the applica-
tion of principles of law. The matter of law there in question
was not simply failure to give costs. It was a substantive
error in declining to exercise jurisdiction to decide the issue
as to recovery of full satisfaction for the matter of the
plaintiff's claim in a previous personal action at law. This
could only have been decided in favour of the appellant,
and he would have thereby gained the advantage of being
able to plead res judicata, if the matter were ever raised
again. As the law then stood it was his vested legal right
to have all the pleaded issues decided one way or the other :
Rex v. Johnson. (2) As the report in 40 L. J. Adm. 29, 30
shows, the respondent's main argument was that, as the
alleged satisfaction was made in an action in personam and
the Admiralty proceeding was in rem, neither the special plea
nor the general issue sufficed to bring the common law
proceedings before the Admiralty judge as a matter requiring
adjudication. The dispute was therefore as to the judge's
jurisdiction, the existence of which the respondents denied,
and not as to his right to exercise it. Legal rights at that
time constantly found expression in terms of pleading, and
I think this discussion, technical as it looks, was really the
natural way in which to raise the complaint that the appellant

(1) L. R. 3 P. C. 696, 702. (2) (1839) 6 Cl. & F. 41.

A. C. AND PRIVY COUNCIL.

763

had not enjoyed the right secured to him by law and was not H. L. (E.)

merely appealing about a failure to give him rather more
costs than he actually got. It is thus as an appeal against
the act of the Admiralty judge in declining jurisdiction to
the appellant's prejudice that Yeo v. Tatem (1) wassubsequently
understood in Rieken v. Yorke Peninsula Justices (2),
'though it is true that Lord Collins, in stating the grounds
on which the appeal was dismissed, says both that the Court
below had exercised discretion and that there had been no
mistake in law. This is equivalent to saying that the justices
had not declined jurisdiction, and that there was nothing
appealable about their decision. He goes on to say that
the Privy Council rule was the same as your Lordships' and
so it was, if this is the right construction of the decision.
So much as to the current of authorities, which fix the
substance of the rule. Assuming that the form in which
it should be stated is, that there is no appeal as to costs only,
I see no escape from the present objection merely by saying
that this appeal, though an appeal as to costs, is not an
appeal as to costs only. Nothing is gained by saying it is
an appeal as to a question of law as well. I think this
expression only leads to confusion. You do not add a
question of law to a question of costs; the two things are
not in pari materia. You raise a question of law, which is
a question of the law of costs. A question of law must be
a question as to the law affecting some subject-matter, and
so with a question of fact. The only subject-matter here
is costs, and the only question of law is whether, in this case,
the judge's discretion as to costs was exercisable in either
of two directions or in one only. Justiciable questions are
not divisible into three kinds, questions of law, questions
of fact, and questions of discretion. Judicial discretion as
to costs goes to the judge's powers over questions of law
and questions of fact, but the powers themselves alike are
powers over costs and costs only. The question suggested
here is, whether the respondent's conduct in the first (the
firm's) action was in any sufficient way made evidence before

(1) L. R. 3 P. C. 696. (2) [1908] A. C. 454.
3 3F2

1927

——
DoNALD
CAMPBELL
& Co.
V.
PoLuaK.

Viscount
Sumner,

764

HOUSE OF LORDS [1927]

H. L. (E.) Branson J. on the trial of the second (the company's) action,

1927
——
DONALD
CAMPBELL
& Co.

v.
POLLAK.

Viscount
Sumner.

which appears to be a question of fact, and to be decisive
of the matter one way or the other, but in any case I do not
know what arguable question about costs there could be
other than mere questions of fact that would not be some
sort of question of law on the legal subject of costs. In the
Court of Appeal, however, the decisions have so copiously
laid down limitations and directions for the exercise of a
judge's discretion as to constitute a body of jurisprudence,
which tends to destroy that free exercise of his statutory
powers, which the Legislature conferred.

The relevancy of the inquiry into the effect of the reported
cases on the present occasion is twofold. Firstly, if it is
laid down that the rule of the House always was such as to
extend to appeals, which nowadays arise under Order LXV.,
r. 1, where a judge sitting alone has deprived a successful
party of costs and has not given leave to appeal, then in
future discussions of other cases, coming under the same
class but differing in their features from the present appeal,
it will be open and may be necessary to go back to the old
authorities in detail and to seek in them, and probably with
success, reasons for distinguishing such other cases and
excluding them from any appeal. Secondly, in the minds
of some at any rate, the Judicature Act, 1876, s. 3, presents
a difficulty in the way of any rule limiting appeals at all,
unless it can be affirmed that it is one which existed before
that Act was passed, and can therefore be deemed not to have
been affected by it. I do not understand your Lordships
to decide that all matters as to costs are appealable. Some
remain incompetent still, s. 3 notwithstanding. I take it,
for example, that Caledonian Ry. Co. v. Barrie (1) must still
render incompetent any order of the Court of Appeal as to
costs, which are in its own discretion, for it related to costs,
which were in the discretion of the Court of Session. Hence
the importance of discovering whether it really can be said
that the rule existing before 1876 extended to the present case,
or whether it is not really a question of making a new rule now.

(1) [1903] A. C. 126.

A. C. AND PRIVY COUNCIL.

765

My Lords, my own view would be that in a matter of H. L. (E.)

practice your Lordships are and always were masters, and
that no general statute as to jurisdiction could be read as
limiting the right to mould the cursus curiae. This seems
to have been the view, which underlies s. 11 of the Act of
1876. I think that the rule, both originally and all along,
was a practice rather than a principle, a matter of self-
defensive policy, like the maxim 'De minimis non curat lex"'
or the Privy Council rule as to concurrent findings of fact,
and these are clearly questions of the way in which the House
exercises its jurisdiction. Such matters must be capable of
modification, whenever your Lordships think it expedient,
from time to time. Particularly must this be so where a
new regulation of practice opens your Lordships' doors to
new subjects of appeal not hitherto entertained, when the
only question in this view would have been one as to the
expediency of the change, but this has not been the matter
in debate, and I will only say that I am not at present
persuaded on this head.

I should also like to point out, what I think may be very
important in any further proceedings, that I do not under-
stand your Lordships to pronounce any conclusion as to
the validity of the practice, long as it has prevailed in the
Court of Appeal, of entertaining appeals from a judge below,
brought without his leave, against the exercise of his dis-
cretion as to costs when sitting without a jury. The principles
on which this is done and the grounds on which it is sup-
ported are very conveniently stated by referring to what
was said by Lord Halsbury in the Civil Service Co-operative
Society v. General Steam Navigation Co.(1) This may stand
for a numerous body of decisions. These decisions have not
been put in the arguments on the present objection. Not
unnaturally, Mr. Jowitt, whose client had appealed to the
Court of Appeal successfully, did not argue that the decisions,
under which this had been done, were wrong, but this does
not alter the fact, that they are not binding on this House,
have never come before it for approval or the reverse, and

(1) [1903] 2 K. B. 756, 765.

1927

ees
DONALD
CAMPBELL
& Co.
Vv.
POLLAK.

Viscount
Sumner,

766 HOUSE OF LORDS [1927]

H. L. (E.) will be open to review on future occasions. The fact that
1927 counsel did not dispute them in this case cannot, of course,
Donato make your Lordships' present decision equivalent to an
CAMPBELL é
& Co. affirmation of them.
4 Hualey v. West London Extension Ry. Co. (1) is, no doubt,

PoLLaK. 5 : ; : '
ca a case of importance in this connection, but I think it must

Sumner, be clear that its value lies in analogy only. It is not a decision
on the rule in the Civil Service Co-operative Society's case. (2)
I see no difficulty in reconciling the fact that the House
entertained the appeal in Huwley's case (1) with the existence
of a rule, good or bad, that it will not entertain appeals as to
costs only. The question being "Was there good cause?"
the decision did not touch the question 'Was there good
enough cause ?'' The ground of the appeal was that the
Lord Chief Justice had acted without jurisdiction, surely an
appealable matter apart from the mode in which he dealt
with the costs. If he acted without jurisdiction the litigants'
legal rights were invaded, just as in Yeo v. Tatem (3) they
were disregarded. Order Lxv., r.1, has the force of law,
and Huzaley's case (1) arises under the second proviso, which
it contains. The structure of the proviso is that, where
the matter has been tried by a jury, the costs shall follow
the event and be independent of the judge's order, unless the
occasion arises, which alone gives him jurisdiction to intervene,
that is the existence of "' good cause." The question of its
existence, since his jurisdiction depends on it, must be appeal-
able; a judge cannot give himself jurisdiction by finding
that he has it when, in fact, he has not. The rule, where the
trial is without a jury, is laid down on totally different lines. a
The costs are then in the discretion of the Court, and there .
is no express statement of anything which limits it or is the
foundation on which jurisdiction depends. Costs, which are
in the discretion of the Court, are prima facie costs, which
are got from the judge according to his view of the case before
him, and they are not the subject of standing legal prescrip-
tions, vesting in a litigant a prior legal right to certain costs

(1) 14 App. Cas. 26. (2) [1903] 2 K. B. 756.
(3)_L. R. 3 P. C. 696.

1

i
|

|

}

| A.C. AND PRIVY COUNCIL.

767

at all. If you come to think of it, costs, which are in the H. L. (E.)

discretion of the judge, must also be in his indiscretion, and
so the only question that remains outstanding is the question
of jurisdiction. In saying this, I am painfully aware that I
am departing from the line which has long been followed in
the Court of Appeal. There the cases have been steadily
assimilated, whether the trial was by judge and jury or not,
and the extent, to which under this process the exercise of
the judge's discretion has now been prescribed to him by
decisions of the Court of Appeal, as matters of law, may well
be collected from the judgment of Atkin L.J. in Ritter v.
Godfrey. (1) Further, by the words of the principal Act itself,
the judge's order as to such costs is made expressly, and
prima facie absolutely, unappealable without his leave. There
is no doubt here about jurisdiction, for the subject-matter
is simply costs, whether an order for costs is made or is refused,
and those costs are entirely within the judge's discretion
since he tried the cause. His jurisdiction is complete, if the
cause has proceeded before him. 'The necessary hypothesis
of the existence of materials, upon which the discretion can
be exercised," is merely a condition precedent to the exercise
of a discretion, which the judge possesses, if he proposes to
exercise it otherwise than in one way. In the face of a rule
which places costs in the judge's discretion, it is impossible
to argue that the successful litigant has by law a right to
costs, in the sense in which that is said of trustees' costs or
costs given by statute. Now this condition is only implied,
if it exists at all, but the implication, according to Lord
Halsbury, is not only that the right to exercise the discretion,
otherwise than in one way, is conditional, but also that the
question of the existence of that condition is itself appealable,
notwithstanding the statutory words. These questions are
quite different from those which arose in Hualey's case. (2)
How they should be answered is not a question which now
arises for decision, but for the purpose of emphasizing what
I have ventured to say about the complete distinction between
Huziey's case (2) and the issue in this appeal, I would point
(1) [1920] 2 K. B. 47, 54. (2) 14 App. Cas. 26.

DonaLpD
CAMPBELL
& Co.
v.
POLLAK.

Viscount
Sumner.

768 HOUSE OF LORDS [1927]

H. L. (E.) out two things. First, an implied condition, unlike an
1927 expressly limited jurisdiction, even if it can be implied at all,
Doxatp may nevertheless not be appealable matter, for the Act may
Can" mean the judge himself to be the sole judge of the existence
v of the condition, as he is of the other matters that guide him

PoLuaKk. ; : Z t '
= in the exercise of his sole discretion. The second, is that

Sumner, to imply such a condition as an appealable question, if it is
merely rested on the proposition that the judge must act
judicially, is a construction deserving of close scrutiny: A
judge, sitting in the seat of justice and acting as a judge,
may sometimes deal with costs as with other things, injudi-
ciously, but in the matter of costs, which are in his discretion,
an injudicious order is not open to review. If, then, the
statement that he must act judiciously really means more
than this, it is no doubt true, but in common experience it
is an injunction never disregarded. Certainly during the
argument we were presented only with somewhat fantastic
suggestions of non-judicial conduct, and such cases, if they
occur, are but a dubious ground for implying rules about
self-misdirection and the existence of evidence fit to be con-
sidered by a reasonable man, which really belong to trials
by jury.

My Lords, I should desire to add two observations on
another aspect of the case. Mr. Pollak appealed to the Court
of Appeal claiming that Branson J. had gone outside his
discretionary power and had fallen into an error of law in
so doing, which was appealable. He won. He now says
that by the rules of your Lordships' House the matter is no
further appealable. It is now contended that grave injustice
would be done, if we refused to entertain the appeal on the
appellants' allegation, for this purpose deemed to be capable
of being established, that the Court of Appeal in its turn was
guilty of error of law and that the trial judge was not. As
this involves hearing all the facts of the appeal, it makes
any rule, which has to be enforced by an objection in limine,
quite useless, for the merits will always have to be fully
heard on the appellants' allegation that, when they are heard,
the error in law will appear. Further, though it may be

a ee

A. C. AND PRIVY COUNCIL.

769

surprising for this House to have a rule differing from that H. L. (E.)

adopted by the Court of Appeal, or to refuse to review that
Court's decision on the same ground as that, on which it
undertook the task of review, the question is not whether
our rule is surprising, but whether it exists. For the rest, I
am frankly unable to understand how the fact, that Mr. Pollak
sought the Court of Appeal and won there, can assist the
appellants in showing that they, in their turn, must have a
corresponding right of appeal to your Lordships. With great
respect, I think that the objection should have been allowed,
and that in any case the decision should be no more than this,
that your Lordships, in the exercise of your power over the
practice of this House, think fit to proceed with the appeal.

Lorp Arxinson. My Lords, I think the respondent's
objection to the hearing of the appeal fails. I concur with
the judgment of the Lord Chancellor on this point. He
has dealt with the authorities touching it so exhaustively that
it is quite unnecessary for me, agreeing as I do with the
conclusion at which he has arrived, to deal with them afresh
at any length. I base my opinion mainly upon the principle
upon which the two following cases have been decided—
namely, Huxley v. West London Extension Ry. Co.(1) and
Civil Service Co-operative Society v. General Steam Navigation
Co. (2) The first of these two was an action brought by the
appellant Huxley against the railway company for damages
alleged to have been sustained by him through the negligence
of the latter while carrying him as a passenger on their line.
He claimed to receive 3000/. The defendants pleaded that
there was no negligence on their part, that there was contri-
butory negligence on the plaintiff's part, and that the plaintiff
might, by the exercise of ordinary care, have avoided the
consequences of the negligence of the defendants, if any,
and lastly that the plaintiff was not injured as alleged. At
the trial before Lord Coleridge C.J. and a special jury a verdict
was returned for the plaintiff for 50/. The Chief Justice,
though applied to by the company's counsel to exercise the

(1) 14 App. Cas. 26. (2) [1903] 2 K. B. 756.

1927
DonaLp
CAMPBELL
& Co.

v.
POLLAK.

Viscount
Summer.

770

Fiwi..1(B:)
1927

——
DONALD
CAMPBELL
& Co.

v.
POLLAK.

Lord Atkinson.

HOUSE OF LORDS [1927]

power conferred upon him by Order Lxv., r. 1, and to deprive
the plaintiff of his costs, declined to exercise any jurisdiction
in the matter, upon the ground that the later decisions of
the Court of Appeal (especially that in the case of Jones v.
Curling (1), had made the principles upon which this juris-
diction was to be exercised unintelligible to him. The
plaintiff accordingly entered up judgment for himself for 501.
and costs. My Lords, I think it would be illuminating to
consider at this stage what was the nature and scope of the
judgment of the Court of Appeal in the case of Jones v.
Curling (1), which the Chief Justice found so unintelligible.
The action in that case was brought to recover possession
of six parcels of land. The defendants, availing themselves
of the provisions of Order x1Ix., r. 15, which corresponds
with Order xxt., r. 21, of the Rules of 1883, pleaded as a defence
that they were in possession of all the closes claimed. The
jury found for the plaintiffs as to four of these closes, numbered
respectively 1, 2, 3 and 5, and for the defendants as to closes 4
and 6. The respective portions recovered by the plaintiffs
and defendants were about equal in area, the plaintifi's
portion being valued at 49501. Lord Coleridge C.J., before
whom the case was tried, made an order that the costs of
both parties should be added together, and divided, apparently
equally, between the plaintiffs and the defendants. This
order was obviously not an order that the costs should follow
the event, but rather an order that on the ordinary system
of taxation they should not follow the event. The appellants
appealed to the Court of Appeal. Brett M.R. is reported
to have expressed himself thus. (2) He said: '"' Now from
this order'? (the order as to costs) "an appeal has been
brought to this Court, and the first question for us to decide
is whether we can entertain any appeal, and, if so, to what
extent ? I am of opinion that this Court has a right, and is
bound, to inquire whether the condition exists which gives
a judge jurisdiction to make an order as to costs." At the
bottom of the same page the Master of the Rolls says: "' The
condition which gives the judge upon a trial before himself
(1) (1884) 13 Q. BD. 262. (2) 13 Q. B. D. 267.

| A. ¢. AND PRIVY COUNCIL. 771

_ and a jury jurisdiction to make an order as to costs is, whether H. L. (E.)
_ there was a good cause or not existing, and I am of opinion _1927

that that is a subject-matter of appeal. Whether there ponatp

was a good cause or not is a question of fact, and the Court C47ge™™
of Appeal must consider whether in their judgment that a oa

fact did exist, and if they disagree as to this with the Pe

judge who tried the action they must allow the appeal." pre

Bowen L.J. expresses his opinion on the matter with his

well known felicity of language. (1) Referring to Order LXxv.,

r. 1, he said: " That rule begins with placing in the discretion

of the Court the costs of all proceedings in the Court,

but then follows a provision by which in the event of a jury

trial the costs are removed from the discretion of the judge

and are to follow the event, except in one case, which is, if

the judge shall for good cause otherwise order. It appears

to me that these latter words restore costs to the discretion

of the judge, provided a condition precedent is fulfilled ; that

is to say, provided there is good cause. But unless there

are facts from which a reasonable man might think the

exceptional order was one which was more just than allowing

the costs to take the ordinary course, there can be no good

cause, and if there is no good cause then the judge had no

jurisdiction. It seems to me that on the true construction

of this rule there is an appeal with respect to the existence

of the facts upon which alone the jurisdiction of the judge

depends. When, however, this jurisdiction is established,

then I think there is no appeal unless the judge's discretion

is exercised in such a wrong way as to make it.no reasonable

exercise of discretion at all. .... It being open for us to

decide whether there was good cause here for making the

exceptional order by which the costs do not follow the event,

we are driven to consider what is good cause within the

meaning of this rule..... 'Good cause' really seems to me

to mean that there must exist facts which might reasonably

lead the judge to think that the rule of the costs following

the event would not produce justice as complete as the

exceptional order which he himself could make." Fry LJ.

(1) 13 Q. B. D. 271.

772

H. L.. (8)

DoNALD
CAMPBELL
& Co.
v.
PoOLLAK.

Lord Atkinson.

HOUSE OF LORDS [1927]

said (1): 'It appears to me that the question whether the
facts exist which give the judge the discretion must be the
subject of appeal..... I will not attempt to give any defini-
tion of what 'good cause' is, but it plainly must be something
which renders it reasonable that the judge should interfere —
with the rule that the costs should follow the event." He
then points out that the verdict and judgment in the case
were distributive, the event with which they dealt not being
single, and that upon taxation the costs would therefore
follow the distinct issues, and says: ''Is then the fact of
the success of the plaintiff on some issues, and of his failure
on other issues, by itself 'good cause' for interfering with
the rule that the costs follow the event? I am bound to
say that it appears to me not to be so. I am of opinion,
therefore, that there was no good cause shown, and
consequently that the Lord Chief Justice had not juris-
diction to make the order, and that the order must be set
aside."

In Huzaley's case the Court of Appeal made an order
that the defendants should have liberty to renew their
application to Lord Coleridge, and that if he declined to
exercise his jurisdiction under Order Lxv., r. 1, they should
apply to the Divisional Court. A stay of execution was
given in the meantime. On December 18, 1885, the
defendants accordingly renewed their application for an
order depriving the plaintiff of his costs. On January 3, 1886,
the Lord Chief Justice heard the arguments, and on April 5
following made an order that the plaintiff be deprived of his
costs for the reasons given in the report of the case. (2)
The Lord Chief Justice delivered a judgment which covered
nine and a half printed pages of the report. On the first of
these pages he states, as I understand it, what are the facts
which he considered amounted to " good cause " for depriving
the plaintiff Huxley of his costs. The statement runs thus:
"In the case of Hualey v. West London Extension Ry. Co.
the plaintiff had preferred an extravagant and extortionate
claim for compensation—3000/.—not merely in the formal

(1) 13 Q. B. D. 274. (2) (1886) 17 Q. B. D. 373, 374.

| A.C. AND PRIVY COUNCIL. 793

| statement of claim but in the particulars delivered in the H. L. (£.)
} action; he had supported it by fraudulent statements and 1927

| dishonest acts; and endeavoured to substantiate it before Donarp
CAMPBELL

| the jury by evidence which they very properly disbelieved." ~"s Go.
| The Court of Appeal affirmed the decision of the Lord Chief x!

POLLAK.

Justice. The plaintiff Huxley appealed to the House of aa ee
Lords against this order of the Court of Appeal.(1) The os
appeal was heard by the following six members of this House
_-—namely, Lord Halsbury L.C., Lords Watson, Bramwell,
| FitzGerald, Macnaghten and Herschell. Four of these noble
_ Lords gave long judgments. Lord Macnaghten stated he
agreed with the conclusions at which his learned friends
had arrived, and Lord Herschell expressed his concurrence
with the opinion Lord Watson had delivered. The House
entertained the appeal, and decided it on the ground that the
statement as to Huxley's conduct in instituting and supporting
his action, as stated by Lord Coleridge C.J., constituted
"good cause' for his depriving Huxley of his costs. The
judgments delivered in the case are very valuable, inasmuch
as they deal with the proper construction of Order Lxv., r. 1,
and indicate what was the true meaning and reach of the
words "' good cause" used in the Order, and next the important
question whether Huxley's appeal was to be dealt with and
regarded as an appeal on "costs alone" or the same thing
"costs only."" Lord Watson, while stating that he would
not attempt to give a general definition of '"' good cause,"
said he might give an incomplete definition of it, and indicated
what these words, in his view, meant in the Order and what
they embraced. In his view, he said, "they at all
events embrace . .. . everything for which the party
is responsible, connected with the institution or conduct
of the suit, and calculated to occasion unnecessary
litigation and expense.' And he lays it down that
as long as the judge or Court deals with considerations
of this kind, the sufficiency or insufficiency of those con-
siderations as affording a reason for disallowing costs are
matters of which they are constituted sole arbiters; they
(1) 14 App. Cas. 26, 33.

774 HOUSE OF LORDS [1927}

H. L. (E.) are acting within their jurisdiction and their decisions are
1927. final and conclusive. On the other hand, he said, if they
Doxarp give effect to considerations which do not constitute " good
CaMPBELL Cause"? within the meaning of the rule they exceed the limits

< a of their jurisdiction, and on that ground their decisions are
Perini tent not protected from review. Lord Halsbury's judgment is
= practically to the same effect. The judgment of the Court
of Appeal dealt solely with the question whether Huxley's
conduct and action, as described by Lord Coleridge, amounted
to proof of "good cause "' for depriving him of costs within
the provisions of Order Lxv.,r. 1. There was not, in the Court
of Appeal, any suggestion that the verdict found for Huxley
should on any ground be set aside or modified or that the
damages awarded to him should on any ground be diminished.
The appeal dealt solely with the question of the existence
of "'good cause"? under Order Lxv., r. 1, for depriving a
successful litigant of his costs. The only relief asked for-
from the Court of Appeal or this House was that he might
be declared entitled to these costs. The appeal to the House
of Lords was likewise an appeal dealing solely with costs,
i.e., an appeal to get rid of the order of the Court of Appeal
which deprived Huxley of costs. It is difficult to see how
an appeal that only aims at annulling an order which deprives
a litigant of his costs, because of his own conduct and not
because of the merits of his action, is not an appeal dealing
solely with costs. As an example of the practical application
of those principles I refer to the second of the above mentioned
cases—namely, the case of the Civil Service Co-operative
Society v. General Steam Navigation Co.(1) There the
defendants chartered to the plaintiffs a steamer to bring a
party of sightseers to Spithead and other places to see the
review of the fleet to be held on the occasion of King
Edward VII.'s Coronation. The review was first postponed
to June 25. The amount to be paid to the defendants was the
lump sum of 1500/. The plaintiffs paid them 250]. on the
signing of the charter, and the balance 1250/. on June 18.
On June 25, when the review was postponed, notice was
(1) [1903] 2 K. B. 756.

A. C. AND PRIVY COUNCIL.

given by the plaintifis to the defendants that they would
not require the use of the ship. Before the postponement
the defendants had expended 500/. in fitting out the steamer.
The review did not, in fact, take place till the month of
August. The plaintiffs sued the defendants to recover the sum
of 1500/. as money paid on a consideration which had failed.
At the trial before a judge alone, Bigham J. (as he was then),
it appeared that there had been some negotiations between
the parties for a settlement of the dispute, and the learned
judge expressed a desire that the matter should be left to
him to say what, under the circumstances and apart from
the strict legal rights of the parties, should be done. The
defendants declined to take this course, and refused to accept
another suggestion of the learned judge—namely, that they
should be content to retain the amount of the expenses they
had received and their costs. In the result the learned judge
gave judgment for the defendants, but ordered that each
of the parties should bear their own costs. The plaintiffs
appealed against the judgment in favour of the defendants,
contending they were entitled to recover the sum they had
paid. And the defendants appealed from the order of the
learned judge that each of the parties should bear their own
costs. The appeal was heard before the Earl of Halsbury L.C.,
sitting in the Court of Appeal, Lord Alverstone C.J. and
Cozens-Hardy L.J. The plaintiffs' appeal against the order
of the learned judge was dismissed, and on reference to the
defendants' cross appeal against the award of costs, the Lord
Chancellor is reported to have said (1): "' No doubt, where
a judge has exercised his discretion upon certain materials
which are before him, it may not be, and I think is not, within
the power of the Court of Appeal to overrule that exercise
of discretion. But the necessary hypothesis of the existence
of materials upon which the discretion can be exercised must
be satisfied. Im the present case, so far as the evidence
before me goes, I can see no materials whatsoever upon which
the learned judge could exercise a discretion at all. The
defendants were sued, and rightly according to law resisted
(1) [1903] 2 K. B. 765.

775

H. L. (E.)

Donatp
CAMPBELL
& Co.

Os
POLLAK.

Lord Atkinson.

716 HOUSE OF LORDS [1927]

H. L. (E.) the suit, and finally succeeded. In the judgment of Bigham J.,
1927 and in the judgment of this Court, they are right; and it
Donatp practically comes to this—that the learned judge has deprived
mgs 'co, the persons sued of what, prima facie, is their right to the
Boca COstS of the litigation which has unsuccessfully been brought
against them because they will not submit to the learned
judge himself as arbitrator to say what should be done. That
is not exercising a discretion upon materials properly before
the judge; but it is depriving a litigant of rights of which
he is by law possessed, upon grounds which it is not competent
for the judge to treat as grounds for the exercise of his
discretion. Under these circumstances I am of opinion that
the cross appeal must succeed, and that the defendants are
entitled to their costs."

It is, I think, perfectly clear from these authorities that
if a judge in a case tried before him and a jury should, by
the exercise of the discretion given to him by Order Lxv.,
r. 1, deprive a successful litigant of his costs, the materials
upon which he exercises that discretion, if it is to be properly
exercised, must be materials proved in that case to exist.
It is not enough that they should be imagined, or suspected,
or, without proof, believed by the learned judge to exist,
nor is it enough if they should exist in a suit different from
the suit tried, and the judge should mistakenly suppose
that they had been established in this latter suit and act
upon that false assumption. That it appears to me is what
has occurred in this case. Besides, it should always be
remembered that the discretion which is to be exercised under
this Order and Rule is a judicial discretion. It is not a judicial
exercise of this discretion to order a litigant who has been
completely successful in a suit and against whom no mis-
conduct is alleged to pay the costs of the proceeding:
Kierson v. Joseph L. Thompson & Sons.(1) Irrelevant
matters cannot be relied upon by a judge as constituting
"good cause' for depriving a successful litigant of his costs,
such as his putting forward in his defence to a money demand
the Gaming Act: Granville & Co. v. Firth (2), or the Statute

(1) [1913] 1 K. B. 587. (2) (1903) 19 Times L. R. 213.

Lord Atkinson.

A. C. AND PRIVY COUNCIL. Ter

of Limitations: Elms v. Hedges (1), or the expression by the H. L. (E.)
jury of their opinion as to how the costs should be borne. The 1927
rule that no appeal shall lie to the House of Lords on a question Donarp
of costs alone is not a statutory rule. It is merely a rule ae Ce
of practice. It was shaped, adopted and applied long before pe
our expeditious and effective Court of Appeal was created. || Giincon,
Upon what rational principle this rule, if it be a desirable —
one, is to be applied to appeals to the House of Lords and not

to appeals to the Court of Appeal, it is difficult to see. The
judgments of this House delivered in the Huzley case, if they

do not disregard it altogether, would appear to me to deprive

it of all coercive authority. For these reasons I am of opinion

that the appeal on the preliminary point fails and that the
objection raised should be disallowed.

Lorp SHAw OF DUNFERMLINE (read by Lorp Carson).
My Lords, there is no question before your Lordships' House
as to the merits of the action between these parties. It is
admitted by both of them that these merits are finally disposed
of and that the sole difference between them is as to costs.

I wish to make this general statement in the most absolute
terms. A consideration of the decisions founded upon by
learned counsel shows, first, that a question of costs which
is incidental to a consideration of a judgment upon the merits
may be entertained when but not unless the merits are brought
before this House and made the subject of consideration.

In the second place, there may be cases figurably and
indeed definitely alluded to in the judgment of this House,
to which reference will presently be made, in which, even
although the merits be brought formally upon appeal, yet
the House may discern that that is but a colourable attempt
to introduce costs, and nothing but costs, to their Lordships'
consideration. Such an attempt being colourable stamps
the case as one in which no merits are before this House ;
the remainder of the case being costs alone the appeal is
thrown out on the simple ground that in substance costs,
and nothing but costs, were brought before your Lordships.
Such an appeal will not be entertained.

(1) [1906] W. N. 114.
A. C. 1927. 3 3G

778

(pbica Le. GE.)
1927

4H
DONALD
CAMPBELL
& Co.
Vv.
POLLAK.

Lord Shaw of
Dunfermline.

HOUSE OF LORDS [1927]

In these circumstances the respondent in this case makes
an objection founded upon the practice. The first reason
stated in his case is that the appeal ought to be dismissed,
"because the present appeal is one brought as to costs only,
and is therefore one which in accordance with the established
principles of your Lordships' House cannot be sustained."
The meaning of that I take to be that the appeal is excluded
from consideration by the established practice. I think
that reason to be sound, and I am of opinion that the appeal
should accordingly be dismissed. The argument upon this
subject contained a full reference to many authorities and
was long and elaborate. It is clear to me that an attempt
is now being made to subvert or invade in a most substantial
sense our long settled practice.

The respondent was in the employ of a firm Donald
Campbell & Co., and was the manager of their Eastern
department. Their business was formed into a limited
concern—namely, Donald Campbell & Co., Ld.—the respondent
became director of that company and he was a large share-
holder in it. It did not prosper, and in a short time went
into liquidation. Acute differences ensued on the subject
of the respondent's dealings, and, in particular, as to his
relations with one Boris Said. The firm sued the respondent
by a writ issued on May 31, 1921; then, a few days after-
wards—namely, on June 3, 1921—-the company issued a writ
against him. The two actions were consolidated and tried
before Darling J. and a jury, and resulted adversely to the
respondent. The Court of Appeal ordered a new trial in both
actions. On appeal to this House it was decided that there
should be no new trial in the action by the firm and that a
verdict in the firm's favour for 2943/. 2s. should stand. With
regard to the company's action, however, which was an action
for an account, it was decided that it should be retried.

It was retried, and confessedly the trial was most satisfac-
torily conducted. To use the language of Atkin L.J.: '' That
second action was tried before Branson J. It was tried
before him for eight or ten days, and he gave a judgment as
to issue on liability, and, if I may say so, a more satisfactory

A. C. AND PRIVY COUNCIL.

judgment I have never read in a complicated case. It seems
to me that the learned judge went very carefully into all
the facts, considered very carefully the contentions of both
parties, and, having very carefully considered and weighed
them, eventually came to a decision in favour of Mr. Pollak.
An action tried in that way should have the usual result
that the parties are satisfied that justice has been done,
although they do not go away satisfied with the result because
it is very seldom possible to convince an unsuccessful plaintiff
or defendant against his will. Nevertheless, both parties
are obviously satisfied with the way in which the case has
been tried, and there is no further appeal from the findings
of the learned judge on the question of liability. The question
that is before us now is the question as to costs. The learned
judge has deprived Mr. Pollak of his costs."

My Lords, I do not propose to discuss whether Branson J.
was right in so depriving Mr. Pollak of his costs, or
whether the learned judges of the Court of Appeal were
right in reversing that judgment and finding Mr. Pollak
entitled to costs. In substance the Court of Appeal held
that in exercising his discretion as to costs the learned judge
had been moved towards that decision by facts established,
or held to be established, when certain evidence was led in
the previous consolidated action. The Court of Appeal held
that he should not have been so influenced. The material
was no doubt before him, in this sense, that the consolidated
action and its procedure were referred to; but the Court of
Appeal considered that Branson J. overstepped the legitimate
limits by allowing the evidence to enter into or influence his
mind and did not properly exercise his discretion. In these
circumstances they confined within what they reckoned to
be proper limits the true subject for consideration in the
exercise of a discretion as to how costs should be awarded,
and they did, in their turn, exercise a discretion as to costs,
and made a pronouncement upon them in favour of Mr. Pollak.
I shall, before I close, revert to this subject of discretion.

It would be improper to indicate which of these judgments

was right, but this brief narrative has only been given in
3 3G 2

779

H. L. (E.)
1927

Loe
DonaLpD
CAMPBELL
& Co.
v.
POLAK.

Lord Shaw of
Dunfermline.

780

H. L. (E.)
1927

SAS
DoNALD
CAMPBELL
& Co.
v.
POoLLAK.

Lord Shaw of
Dunfermline.

&

HOUSE OF LORDS [1927]

order to lead up to the fact now definitely manifest—namely,
that from the day when Branson J. gave judgment in favour
of the respondent, the merits of this action were not only
finally determined but completely passed from. The judgment
stands without suggestion by either side that it can be gone
back upon, and with a confession that the appeal to this
House is on costs alone. Neither in substance nor in form
or colour are the merits brought before this House, and it
is to that clear and clean case that the authorities as to
practice have to be applied.

In Fitzgibbon v. Scanlan (1) Lord Chancellor Eldon said :
"In regard to the matter of costs, although an appeal would
not be received merely on the subject of costs, yet it did not
follow but the article of costs might be taken into considera-
tion when there was an appeal respecting other matters."
That is a clear distinction between costs alone and other
matters—namely, the merits. As to costs alone "an appeal
would not be received." It is reported that Lord Redesdale
concurred with the Lord Chancellor "in every particular.''
The case was decided in 1813.

The case of J'od v. Tod (2) completely confirms the same
view as to practice, but it illustrates the matter from another
aspect. A summons of reduction of a certain election of
magistrates to a Royal Burgh in Scotland was raised in the
Court of Session. The merits of the discussion need not
be entered upon, but the Lord Chancellor said, upon the
point of practice, as follows: "This House never does
entertain an appeal for costs where costs are in the discretion
of the Court below." That is a statement of the general
practice. He then, however, added: '' But when the Legis-
lature, by a statute, has expressly required that the Court
of Session, in the case of an action that is brought under
the authority of that statute, and in the case of a summary
complaint which is brought under that statute, the Court
shall make the party who fails pay the full costs of suit,
it does appear to me that the party is in fact entitled
to full costs of suit, and that being so entitled to full costs

(1) 1 Dow, 261, 270. (2) 2 W. & 8. 542, 549.

A. C. AND PRIVY COUNCIL.

of suit, the Court below ought, by their judgment, to have
given full costs of suit, unless they were prepared to say
that this was a case out of the statute." And the Lord
Chancellor concludes with this clear pronouncement: '"' If
it is a case out of the statute, it would be a question of
discretion, and therefore no appeal would lie."

In 1835 occurred the case of Inglis v. Mansfield (1), a case
on appeal to this House from the Court of Session. Lord
Brougham L.C. put the matter thus: " The rule with respect
to costs in this House, as well as in the Privy Council and
the Court of Chancery, is, that you cannot appeal for costs
alone; but you can bring an appeal on the merits; and if
that is not a colourable ground of appeal for the purpose
of introducing the question of costs to the Court called upon
to review the case, the Court of review will treat that, not as
an appeal for costs, but will, in affirming the judgment given
in the Court below, consider the question of costs as if it is
fairly raised."" It appears to me, confining the decision to
the practice of this House, that that judgment makes clear
the distinction in our practice that costs alone you cannot
appeal for: they will only be considered by this House
when merits are brought up for consideration, and they will
not even then be so considered if the bringing up of
the merits is a colourable device for getting costs
considered. I am humbly of opinion that all this is still
law.

Home v. Pringle (2) was decided in 1841. Lord Cotten-
ham L.C. dealt with the question of costs on the same
lines. He said: "If I had been sitting in the Court below,
considering the failure of the case made against the trustees,
and the unjustifiable charges brought against them, I should
perhaps have thought it just that they should be indemnified
in costs, by directing the pursuer to pay them. But in this
House the case is different. A Court of Appeal does not
interfere in the question of costs without reluctance in any
case, and generally will not entertain an appeal for costs
alone." And the House decided accordingly.

(1) 3Cl. & F. 362, 371. (2) 8 Cl. & F. 264, 293.

781

H. L. (E.)
1927

es
DoNALD
CAMPBELL
& Co.
v.
POLLAK.

Lord Shaw of
Dunfermline.

782

Ha L.(ES
1927

——
DoNnALD
CAMPBELL
& Co.

Vv.
POLLAK.

Lord Shaw of
Dunfermline.

HOUSE OF LORDS [1927]

Although I am citing the authorities presented to the
House in their order, it seems clear to my mind that the general
practice of the House was a practice not begun with those
cases, but that the dicta of these three Lords Chancellors
confirmed a rule well established and of long standing. It
is so treated in Mr. Macqueen's work on the Practice of the
House of Lords and Privy Council. An appeal, says he,
will not lie on costs alone, but it does not follow that the
article of costs may not be taken into consideration when
there is an appeal respecting other matters, and then he
quotes Lord Brougham's judgment already cited.

In Wilson v. The Queen (1) an appeal had been presented
to the Judicial Committee of the Privy Council from a decree
of the Vice-Admiralty Court of Sierra Leone, restoring
property seized for breach of the Customs laws. One of the
appellants was proved not to be the owner of the goods,
though so proceeded against. He, however, was cast in
costs by the Court below. He made no appeal on the merits,
the decision being in his favour. He, however, did appeal,
and Lord Cairns L.J. then said: "' With regard to one of
the appellants, Cole, it was attempted to maintain his right
to appeal, on the ground that, although he had been absolved
from penalties in the Court below, he had not been awarded
the costs of the proceeding against him. Their Lordships
are of opinion that, with regard to the appellant, Cole, the
appeal is strictly and simply one for costs, under circumstances
in which their Lordships have at all times laid down as a rule,
that an appeal for costs could not be entertained."

The rule thus enunciated by Lord Chancellors of the
greatest eminence and covering a period of practice of over
half a century is, however, argued to have been either changed
or evaded by Yeo v. Tatem (2), decided in 1871. It was a
case of damage instituted on behalf of the owners of a
brigantine Georgiana against the brig Orcent and her owners,
the appellants being, as was assumed, their agents. A general
denial was pleaded in answer, and a special defence was
put in that the damage complained of had been already

(1) L. R. 1 P. C. 405, 408. (2) L. R. 3 P. C. 696, 702.

A. C. AND PRIVY COUNCIL.

adjudicated upon in a Court of law and judgment obtained
and satisfied. At the hearing it was proved by a witness who
was the principal defendant that the damage was occasioned
by acts done by him on his own responsibility, but claiming
certain rights as consignee. The Admiralty judge held that
the suit could not be maintained, but declined to give the
defendants their costs or go into this special defence, although
his judgment was asked thereon by the defendants' counsel.
It was held by the Judicial Committee that the defendants
were entitled to have the judgment of the Court as asked
on the special defence, that the general traverse and denial
was sufficient to justify the evidence, and that the appeal
was not for costs alone.

It is plain that the merits of the case, and not costs alone,
were thus brought before the Privy Council, and it is also
clear that the Council so thought. A perusal of the judgment
of Sir Joseph Napier demonstrates this. In the course of
his opinion, however, he said this: '' Their Lordships do not
mean to question or recede from the decisions that have
been pronounced regarding not allowing an appeal for costs,
but where there has been a mistake upon some matter of law
that governs or affects costs—some matter that involves
the due application of principles of law—the party prejudiced
is entitled to have the benefit of correction by appeal."

My Lords, I am of opinion that the argument ably
submitted in the present case to this House misconstrues
these words here employed—namely, "' mistake upon some
matter of law that governs or affects costs." -It seems plain
to me that that refers to a matter of law on the merits of the
case: it does not refer to a decision upon costs or a matter
of law about costs, but it refers to a matter of law upon the
merits of the case consequent upon which decision on merits
the question of costs could hang. That there was such a
decision on the merits given in Yeo's case (1) is plain, and a
most important decision as to practice it was—namely, as
to whether the general traverse and denial was sufficient
to justify certain evidence produced: a substantial question

(1) L. R. 3 P. C. 696.

783

H. L. (E.)
1927

WwW
DoNnaALpD
CAMPBELL
& Co.

aes
Pouuak.

Lord Shaw of
Dunfermline,

784

H. L. (E.)
1927

es
DONALD
CAMPBELL
& Co.
PS
PoLLAK.

Lord Shaw of
Dunfermline.

HOUSE OF LORDS [1927]

on the merits equivalent to a plea of res judicata had to be
decided. Merits accordingly being thus brought before the
Judicial Committee, any question as to "costs alone"
disappears. And it is to be noted that '" Their Lordships
do not mean to question or recede from the decisions that
have been pronounced regarding not allowing an appeal
for costs."

It is argued that in the case of Metropolitan Asylum District
Managers v. Hill (1) observations fell from the Court which
essentially weakened the long established rule of practice
so frequently affirmed. I am humbly of opinion that this
is not so. Upon the contrary, the rule was reaffirmed that
an appeal must not be brought for costs or in relation to
costs, '' but an appeal against an order which imposes, as a
condition to having a new trial, the payment, within a certain
time, of the costs of the first trial does not fall within that
principle." As Lord Selborne L.C. put it: "The Court of
Appeal conditionally discharged the order for the new trial,
and. in the alternative conditionally dismissed the appeal."
It seems clear, accordingly, that the point before the House
was whether the appellants "were entitled to retain the
order which they had obtained from the Court of first instance,
unclogged and unfettered by conditions."" Lord Blackburn
makes the distinction very emphatically when he says:
'Your Lordships may possibly come to the conclusion that
there ought to be a new trial absolute and simple, without
any condition at all, or it may be that you will think it right
for there to be a new trial with the condition which the
Queen's Bench Division imposed, or with the condition
which the Court of Appeal imposed, or it may possibly be
that you will be of opinion that there should be a new trial
with some other condition different from either.'' Lord
Watson expressly concedes "the propriety of the rule that
the Court of last resort ought not to entertain an appeal
which involves nothing except the payment of costs, but,''
he adds, "it appears to me that that rule is limited to the
ease where the whole merits of the action of cause have been

(1) 5 App. Cas. 582, 584, 586.

A. C. AND PRIVY COUNCIL.

determined." Instead, accordingly, of Hill's case casting
doubt upon the rule, it follows it and confirms it, and, as
appears from the language of Lord Watson just cited, applies
it almost expressly to the present case now before the House,
which is cited to be a case '"' where the whole merits of the
action or cause have been determined."

In 1889 occurred the case of Hualey v. West London
Extension Ry. Co. (1) The case did not deal with the question
now before your Lordships' House, but with the construction
of a certain passage in Order Lxv., r. 1, of the Rules of the
Supreme Court, 1883, which applies to the discretion exercised
by the judge or court in trials with a jury, the prescription
of the rule being that in such cases "the costs shall follow
the event unless the judge ... . or the court shall for good
cause otherwise order."

The judge trying the cause with a jury had refused to
exercise his discretion or exercise any jurisdiction in the
matter. The Court of Appeal sent it back to him, and he
deprived the plaintiff of costs for the causes set out in his
report. The questions before this House truly were whether
the Lord Chief Justice by at first declining to determine
costs had rendered himself functus officio, and what in
practice and on merits was important—namely, what were
the true procedure under, and the true construction of, the
Statutory Order. The case does not appear to me to throw
any light upon the point of practice before your Lordships.

It is different, however, with the case of Caledonian Ry.
Co. v. Barrie. (2) The pure and broad question was there
brought before a powerful committee of this House, con-
sisting of Lords Macnaghten, Shand, Davey, Robertson and
Lindley. It was an appeal against a judgment of the Court
of Session in Scotland in an action directed against the railway
company for injury to cattle being conveyed under a certain
contract. The Sheriff Substitute assoilsied the company,
but gave them no costs. On an appeal to the Sheriff he
cast the company in the costs of the case. It appeared that
the company's behaviour was considered reprehensible ; it

(1) 14 App. Cas. 26. (2) [1903] A. C. 126.

785

H. L. (E.)
1927

Ww
DonaALD
CAMPBELL
& Co.
v.
POLLAK.

Lord Shaw of
Dunfermline.

786 HOUSE OF LORDS [1927]

H. L. (E.) had denied to the cattle dealer any information as to the
1927 cause of the injury to the stock and had declined to allow

Donato any railway servant to be precognosced.

CAME co The First Division of the Court of Session by a majority

ae affirmed the Sheriff. Lord Adam said that the case raised
Lord Shaw of @ Question of principle' depending on the construction
Dunf

fermiine. and meaning of the correspondence between the parties and

their actings. The Court accordingly applied their minds
to the correspondence, ete., and held that the Sheriff was
right, Lord McLaren dissented, holding that he was wrong.
If there ever was a pure question of costs on which the House
of Lords could have been induced to entertain the appeal,
this was one. The successful party had been cast in the
costs of the unsuccessful party. One judge of Appeal had
dissented and the other judge had admitted that he decided
the case upon principle. The Appeal Committee before
whom the case was argued and decisions cited held as follows :
"That the appeal being on the question of costs only was
incompetent."

In Rieken v. Yorke Peninsula Justices (1) another attempt
was made in the Privy Council to get the better of the rule.
The judgment of their Lordships was delivered by Lord
Collins, who cited Wilson v. The Queen (2); Inglis v.
Mansfield (3); and Yeo v. Tatem (4), and held that the rule
was firmly established.

I have thus, my Lords, gone through all the relevant and
important cases founded upon. They cover a period of over
100 years. They appear to me to culminate in Caledonian
Ry. Co. v. Barrie.(5) It appears to me to be settled by
authority that this appeal, admittedly in no respect upon
the merits of the cause but solely upon costs, must be rejected
as incompetent. It falls within no exception to which a
statute applies. When an Act of Parliament or a Statutory
Order or a recognized rule of law has prescribed that in a
certain event there must be a certain result as to costs, then

(1) [1908] A. C. 454. (3) 3Cl. & F. 362.

(2) L. R. 1 P. C. 405. (4) L. R.3 P. C. 696.
(5) [1903] A. C. 126.

A.C. AND PRIVY COUNCIL.

the Courts must follow that prescription, but this becomes

part of the merits of the case itself. There is no such case
here.

The exercise of discretion is a wide term. Suppose a

decision demonstrably and confessedly resting upon elements
derived illegitimately and improperly from material only
imported into the case on account of some invidia in the
_ judge's mind, and not resting upon material in the cause, it

may be that in such a case this House might think fit to

_ break down or make that an exception to the rule. I do not

suggest that the House would be foreclosed from doing so,
although it stands to reason that such an invasion of practice

'would require to be founded upon extraordinarily strong

grounds.
But I see nothing in the present case to give a right to an
appeal to this House on the challenge that it was a legal

matter for the House to determine as to what were the

materials on which the judge who tried the case should have

exercised his discretion. These materials were admittedly

to be found within the four corners of the consolidated. cases
by the company and the firm. The case, in short, is the
familiar one of a discretion being alleged to have been
wrongly exercised by a judge: the phrase used is that he
misdirected himself, the equivalent of which is simply that
he went wrong. If he took something into account which
had. entered. into the case actually or by inference, but which
he should not have allowed to enter his mind, and should
have been blind to, then his discretion might have been
erroneously exercised, and the Court of Appeal according to
its practice was of course within its rights in correcting this
error and exercising its own discretion without allowing
such an error to creep in.

But, my Lords, the practice of the House appears to me
to be plain, that at that stage finality upon costs with all
the points as to the elements of discretion applicable thereto
—finality is definitely reached. The Court of Appeal in
England and either Division of Court of Session in Scotland
are charged with that final responsibility. This House

7187

H. L. (E.)
1927

eS
DoNALD
CAMPBELL
& Co.

Vv.
POLLAK,
Lord Shaw of
Dunfermline.

788 HOUSE OF LORDS [1927]

H. L. (E.) respects that finality, as does the Judicial Committee of the
1927. Privy Council, in regard to decrees upon costs alone pronounced
Donato by Indian and Colonial judicatories.
Camesrtt I desire to add this, my Lords: I think, but of course I
Porax, cannot testify especially, upon the practice in England.
lord Saw ot DUt with regard to Scotland I can. I feel sure that legal
Dunfermline. practitioners and litigants in that country have looked upon
the rule as so settled and have accepted that finality of their
Supreme Court accordingly. I do not doubt that the same
thing has happened in England. Your Lordships are thus
confronted with an appeal made not only to upset a course
of decision, which has extended for over a century, but with
a uniform practice of the two laws and countries in con-
formity therewith. I think that practice was right and that
this case falls within it.

My Lords, I will add but one word, as to the argument
submitted to this House in regard to the Appellate Juris-
diction Act. Sect. 3 of that statute is as follows: '' Subject
as in this Act mentioned an appeal shall lie to the House
of Lords from any order or judgment of any of the courts
following, that is to say: (1.) Of Her Majesty's Court of
Appeal in England." It was argued in the present case, as
it was in Secretary of State for Home Affairs v. O'Brien (1),
that this language is language of complete generality. It
was held in the case cited that such language could not
and was never meant to apply in the sense of extending the
jurisdiction or practice of this House so as to make appealable
an order of liberation pronounced upon a writ of habeas
corpus, the practice of this House having been to respect
the principle that once liberation had been granted by any
Court the cause is at an end.

I do not think that the enumeration in general terms as
to all orders of the Court of Appeal was made to, or does,
apply to a complete inversion of the practice of this
House not to entertain appeals solely upon costs. The
long settled practice to which I have referred could only
have been inverted or invaded by language directly and

(1) [1923] A. C. 603.

A. C. AND PRIVY COUNCIL.

789

distinctly aimed and settled for that purpose. The principles H. L. (E.)

set forth in O'Brien's case (1) and in Coa v. Hakes (2) appear
to me to cover the present case.

Tam humbly of opinion that the objection by the respondent
to the competency of the present appeal is well founded, and
that it should be sustained and the appeal dismissed with costs.

My Lords, the above was the opinion which I formed at
the close of the first hearing. I have most carefully and
respectfully considered the very able arguments of counsel
at the second hearing and the views of your Lordships just
delivered, and I adhere to my first opinion. In doing so
the House will forgive me, I trust, while I merely note these
supplementary points.

1. This is a purely English appeal and, in my view, can
form no precedent in regard to Scotch appeals. Its decision
turns out to be governed by the effect of Order LXv. of the Rules
of the English Supreme Court and of the position and practice
of the Court of Appeal under the English Judicature Act.
It appears to be accepted that the Court of Appeal may
rectify an error in law which it is satisfied the first judge
fell into, but that it itself exercises no discretion. In case
of the present decision of this House ever being cited in any
Scotch attempt at appeal from the Court of Session not on
merits but upon costs alone, I think it right only to mention
that in Scotland there is, neither by enactment nor practice
nor analogy, any justification for holding that the long standing
practice with regard to Scotch appeals is now being invaded
or altered. The Inner House of the Court of Session has
itself a discretion as to the award, modification or refusal
of costs. Quoad an appeal to the House of Lords, if a
decision upon costs has been reached by the Inner House
that decision cannot, solely on costs, be challenged in this
House, and must stand as final. The matter has been so
treated by writers on practice, such as the learned Professor
Eneas Mackay. And its clear and absolute character has,
I can personally testify, been so treated during the more
than half a century of my own professional life.

(1) [1923] A. C. 603. (2) (1890) 15 App. Cas. 506.

1927

DONALD
CAMPBELL
& Co.

v.
POLLAK.
Lord Shaw of
Dunfermline,

7190

H. L (E.)
1927

——
DONALD
'CAMPBELL
& Co.

v.
POLLAK.

"Lord Shaw of
_Dunfermline.

HOUSE OF LORDS [1927]

2.1 venture to enter my special dissent from those
opinions which have expressed either doubt or question
of the decision of the powerful appeal committee which sat
in Caledonian Ry. Co. v. Barrie. (1) It is true that in the
argument a reference was made to another question—namely,
the effect of s. 40 of the Scotch Judicature Act (which
confines the range of facts to those found in the Court below).
But that reference was an irrelevant and futile reference
and had no bearing on the question of the competency of the
appeal. The true question—namely, "Is there an appeal
to the House of Lords on a question of costs alone ?"'—that
question, as the private records of the case show, was
thoroughly argued and the whole catalogue of leading cases

already alluded to was cited; and when Lord Macnaghten
in throwing out the appeal did so, he referred to the ground
for doing so as one; and nobody can doubt that it was and
-was alone the one which is before your Lordships now.

3. I venture to call attention to what happened in the

'Court of Appeal on the form of that Court's judgment. It
is as follows—namely, that such part of Branson J.'s judgment

"as orders that no order be made as to costs be set aside

and that judgment be entered for the defendant Raymond

Pollak with costs."
My Lords, there is no record, and it is, I understand,
not the fact, that any objection whatsoever was made by

either party to the Court of Appeal itself deciding the

question of costs. If their judgment was taken as merely

@ correction of an error or self-misdirection, the legal course

was to send the case back to Branson J. to eliminate that

error and apply his discretion correctly to the case and make
such a judgment on the whole case—without that error—
as should seem right.

Why was this not done? It appears to me to be fairly

clear that the reason was that it was accepted by both parties

that the Court of Appeal should be allowed to arrange costs

according to its discretion, that is to say, its idea of what
a discretion on a review of the whole case should have come

(1) [1903] A. C, 126.

A. C. AND PRIVY COUNCIL.

791

to. The astonishing fact remains that neither party in the H. L. (E.)

case—by the reasons formulated in his appeal—has taken
any point of objection to the decision of the Court of Appeal
on costs standing pro forma as it does. The argument
presented to your Lordships is rather of the nature of an
astute afterthought unsupported by either reason or suggestion
upon the papers. I do not enter further upon the topic lest
I should trench upon the merits.

4. On the general rule which excludes from this House
appeals on costs alone, the invasion of that rule has, in my
opinion, in the past been only allowed by reason of some-
thing like a statutory or other prescription—as already
referred to—which arises ab extra, and so compels by force
of law the exception. But the case of the present appeal
does not arise from a prescription ab extra; it is founded on
something psychological, discoverable by an analysis of what
is alleged to have operated in the minds of the judges who
settled the costs. It is here that I part company with those
who invoke the suggestion of a failure of substantial justice.
The cases are legion in which, even while assenting to the merits
of the judgment, one or other or both of the parties think
that substantial justice has not been done upon costs. And
if the rule against excluding such questions from that salutary
finality which has for generations made them find an end
in the lower Courts—if that rule be either invaded or
abrogated, then the way may possibly have been opened
to powerful litigants for the perpetration of much duress
and injustice by, it may be, the ruinous protraction of
litigation.

Lorp BLANESBURGH (read by Viscount Dunepin). My
Lords, Turner L.J., when delivering the judgment of the
Judicial Committee in Attenborough v. Kemp (1), deals with
appeals upon costs alone in terms which may usefully be
recalled. His observations are invariably referred to as the
basis of the rule on this subject which, as elucidated in
subsequent. decisions, obtains with the Board.

(1) 14 Moo. P. C. 351, 353.

1927
~~
DONALD
CAMPBELL
& Co.

Vv.
POLLAK.

Lord Shaw of
Dunfermline.

792

HL. (E:)
1927

—
DONALD
CAMPBELL
& Co.
v.
POLLAK.

Lord
Blanesburgh.

HOUSE OF LORDS (1927]

Their Lordships, said the Lord Justice, "do not wish to lay
it down as a general rule, that in no case would there be an
appeal in respect of costs, and of costs alone; because there
might be cases where discretion has not been fairly exercised
upon the question at issue, and the decision of the Court
below has proceeded upon mistake or misapprehension.
Their Lordships do not think that any general rule can be
laid down which must apply to cases of this description.
Such cases their Lordships desire to leave untouched; but
where there has been bona fide care and discretion exercised.
on the part of the judge who has decided the case, their Lord-
ships have no hesitation in stating their opinion to be, that
in such a case no appeal will lie in respect of costs alone."

I may, at a later stage, have to refer to this passage in its
entirety. At the moment I am concerned only with its last
sentence. Upon that, I hazard the observation that in
your Lordships' House also, the rule at least to the extent
there stated is equally well established. And with a rule

_ so limited, I know of no interference, legislative or other,

which is, or ever has been, threatened from any quarter.
How far further, if at all, the rule in this House extends
or should be permitted to extend: at what point an appeal
which may superficially retain the appearance of an appeal
as to costs alone ceases under these words to be correctly so
described in any sense relevant to its competence: at what
point an appeal within the meaning of any rational rule on
the subject ceases to be an appeal as to costs alone and
becomes something quite different: at what stage it ceases
in the same sense to be an appeal as to costs at all—these
are the questions, and the only questions, upon which in a
case like the present there is room for difference of opinion.
There emerges, however, on this appeal, largely as the
result of the conjoint effect of two decisions of this House,
Hualey v. West London Extension Ry. Co.(1) and Secretary
of State for Home Affairs v. O'Brien (2), a separate question
of perhaps equal importance. We are here concerned with
an appeal from an order of the Court of Appeal in England.
(1) 14 App. Cas. 26. (2) [1923] A. C. 603.

a

A. C. AND PRIVY COUNCIL.

It is presented to your Lordships' House under and by virtue
of s. 3 of the Appellate Jurisdiction Act, 1876. The appeal
quite clearly comes within the words of that section, and the
separate question here is whether the appellants are not
under its unqualified provisions entitled at your Lordships'
hand to a hearing of their appeal whatever may be the true
limits of any rule of the House applicable to appeals, not
within the section.

It will, my Lords, be a convenient introduction to the
consideration of all these questions if an attempt be made
in the first instance to determine with precision exactly what
this appeal is and what it is not, and incidentally to ascertain
what the jurisdiction was which the Court of Appeal pro-
fessedly exercised in making the order now appealed from
and how it deemed itself to be possessed of that jurisdiction.
Whether there is or is not a duty laid upon your Lordships'
House to entertain this appeal will, I believe, largely turn
on the position as made apparent by that preliminary
inquiry.

My Lords, after deciding the case in favour of the defendant,
Branson J., who tried the action without a jury, gave judgment
for him, but, as the formal order expresses it, he made no
order as to costs. In the circumstances, these words were
superfluous. The operation of the learned judge's order
would have been the same had the order been silent as to
costs. Its result, intended and effective, however, was that
the costs did not follow the event for the reason that the
learned judge, purporting to exercise his judicial discretion
in the matter, decided that they should not.

He explains his decision and the reasoning which led him
to it in terms which do not admit of misunderstanding. But
for one circumstance the defendant was entitled to his costs
of action, as in ordinary course. But for that circumstance
he would have exercised his discretion by ordering the
plaintiffs to pay these costs. The plaintiffs, however
had called his attention to certain things touching the
conduct of the defendant in an action at one time
consolidated with this action, but to which the plaintiffs

A. C. 1927. 3 3 H

793

H. L. (E.)
1927

"~~
DoNALD
CAMPBELL
& Co.
Vv.
POLLAK.

Lord
Blanesburgh.

794

HOUSE OF LORDS [1927]

H. L. (E.) were not parties: to these circumstances, which he accepted

1927
aed

DoNALD
CAMPBELL
& Co.

Vv.
POLLAK.

Lord
Blanesburgh.

as having been proved before him, the learned judge held
that he was in law entitled to have regard in dealing with
costs: and taking them into account, and them alone, he
exercised his discretion by making no order as to costs at all,
with the result that the defendant was thereby deprived of
a very large sum to which it is quite clear the learned judge
would otherwise have considered him entitled. It is true
that that large sum was costs. But that, so far as the
principle of the thing is concerned, is the merest accident.
The legal question whether the learned judge was justified
in taking into account the circumstances which he did, might,
in another case, just as easily arise with reference to a right
to any kind of property made dependent upon the exercise
of a judicial discretion.

In relation to costs the learned judge's powers are derived
from Order Lxv.,r. 1, That order, so far as material, is in the
terms following: "Subject to the provisions of the Act and
these Rules, the costs of and incident to all proceedings in
the Supreme Court... . shall be in the discretion of the court
or judge; provided that nothing herein contained shall
deprive an executor, administrator, trustee, or mortgagee
who has not unreasonably instituted or carried on or resisted
any proceedings, of any right to costs out of a particular
estate or fund to which he would be entitled according
to the rules hitherto acted upon in the Chancery Division :
Provided also that, where any action, cause, matter, or
issue is tried with a jury, the costs shall follow the event,
unless the judge by whom such action, cause, matter, or
issue is tried, or the court, shall, for good cause, otherwise
order."

My Lords, the action, as I have said, was not tried with
a jury, and your Lordships have present to your minds the
difference which exists under that rule in the matter of costs
between an action tried with a jury and one, like the present,
tried by a judge alone. In the case of the first, the costs
follow the event, unless "'for good cause" it is otherwise
ordered. In the case of the second, the costs all through

A. ¢. AND PRIVY COUNCIL.

795

are in. the discretion of the judge, and the successful party, H. L. (E.)

whether plaintiff or defendant, gets no costs unless the judge
awards them. But while that is the distinction there is
in circumstances like the present little practical difference
between the two. Had this action been tried with a jury
and had the jury's verdict been for the defendant, the
learned judge would have found, in the circumstances
to which I have already alluded, the presence of the
"good cause,' which would have enabled him in his
discretion to 'otherwise order." And his order, then
discretionary, would as now, have said that there was to be
no order as to costs. The result and the mental process by
which it was judicially reached would have been the same
in that case and in this. I desire, my Lords, particularly
to emphasize this statement, and for the reason that
had the learned judge's order as to costs here followed
the verdict of a jury instead of, as it did, a judgment
of his own, the question whether in law he was entitled
to make the order would without doubt have been
open to final review in this House. Such is the result
of Hualey v. West London Extension Ry. Co.(1) In my
eyes, it is not the least of the respondent's difficulties in
this preliminary discussion that he is confronted with
the problem, which I have myself found insoluble, of
stating, as he must, your Lordships' rule as to appeals
for costs alone in some rational form under which the " good
cause '' cases will be taken and appeals like the present will
be left.

From the learned judge's order, so far as it deprived him
of costs, the defendant appealed to the Court of Appeal,
and it is now essential to see exactly what the objection was
which he there took to the order made by the learned judge.
On its nature any competence that court had to entertain
the appeal turned. And, first of all, the objection was
not concerned with the manner in which the learned
judge had exercised his discretion. It has never been
denied in these proceedings that the actual exercise

(1) 14 App. Cas. 26.
3 3 H2

1927

wakes
DoNALD
CAMPBELL
& Co.
v.
POLLAK,.

Lord
Blanesburgh.

—

796

H. L. (E.)
1927

Cae,
DonaLpD
CAMPBELL
& Co.

v.
POLAK.

Lord
Blanesburgh.

HOUSE OF LORDS [1927]

of a proper discretion in relation to costs remained in
this case a matter for the learned judge and for no one
else. Sect. 49 of the Judicature Act, 1873, which is the
governing section, provided "that no order made by the
High Court of Justice .... as to costs only, which by law
are left to the discretion of the Court, shall be subject to any
appeal, except by leave of the Court . . . . making such order."
Such leave in the present case was never either asked for or
given. And, the object of the section being that except
with such consent the Court of Appeal shall not review a
judge's discretion with reference to costs: Bew v. Bew (1),
it follows that in the present case any such review was entirely
beyond the competence of the Court of Appeal. Nor did
that Court undertake any task of the kind. How, indeed,
could it have, when the merits or otherwise of the defendant's
conduct in relation to the litigation were never before it ?
The order of the Court of Appeal took the form it does, only,
I feel sure, because the learned judge had in effect intimated
how he himself would have dealt with the costs if the circum-
stances to which he had had regard were not open to his
consideration. But for that intimation the Court of Appeal

'would have been bound to refer the case back to the learned

judge for him to exercise his discretion afresh on a consideration
of the materials to which in the view of that Court he was
confined. In the circumstances that would have been a
needless formality. The order accordingly gave to the
defendant his costs at once. But in so giving them there was
no exercise by the Court of Appeal of a discretion of its own.
Sure it is that this appeal, whatever else may be said of it,
is not, in any sense, an appeal from the exercise by the Court
of Appeal of any discretion at all. It is not, I submit, open
to your Lordships to refuse to entertain it for any such
non-existent reason.

And the point is of first importance. On that very ground
the present case is at once distinguished in principle from many
which have been referred to, and notably from one on which
great reliance was placed by Mr. Jowitt—I mean Caledonian

(1) [1899] 2 Ch. 467, 471.

A. C. AND PRIVY COUNCIL.

797

hy. Co. v. Barrie.(1) There the learned Sheriff-Substitute H. L. (E.)

had exercised his discretion as to costs on the facts which
were all before him. On appeal, the Sheriff-Principal first,
and the Inner House in turn, exercised on their view of the
same facts, but in another way, what they treated as being,
and what was apparently on all hands accepted as being,
their own discretion. There was then an appeal to this House,
and if its rejection by the appeal committee was in fact based
on the ground that it was an appeal from the exercise of
that last discretion one can feel no surprise at the result. For
Barrie's case (1) is only another illustration of the Privy

Council rule, as above expounded by Turner L.J.: an
illustration of the rule of this House as accepted in every
quarter.

Very different was the case here raised in the Court of
Appeal and decided by that Court. It was that the learned
judge, bound by law to deal with the costs of the action in
the exercise of a judicial discretion, had, so far from doing
so, avowedly based his order upon circumstances which in
the submission of the defendant were not before him and to
which in law he was not entitled to have any regard at all ;
that, in other words, on the learned judge's own avowal,
the only discretion he had exercised was no discretion
whatever.

And that contention of the defendant he, in accordance
with existing authorities binding upon the Court of Appeal,
was entitled to raise by appeal. "No doubt," says Lord
Halsbury in Civil Service Co-operative Society v. General
Steam Navigation Co. (2), "where a judge has exercised
his discretion upon certain materials which are before
him, it may not be, and I think is not, within the
power of the Court of Appeal to overrule that exercise
of discretion. But the necessary hypothesis of the
existence of materials upon which the discretion can be
exercised must be satisfied. In the present case, so far as the
evidence before me goes, I can see no materials whatsoever
upon which the learned judge could exercise a discretion

(1) [1903] A. C. 126. (2) [1903] 2 K. B. 756, 765.

1927
"~~
DoNnALD
CAMPBELL
& Co.
v.
PoLLAK.

Lord
Blanesburgh.

798

H. L. (E.)
1927

as
DonaLpD
CAMPBELL
& Co.
Vv.
POLLAK.

Lord
Blanesburgh.

HOUSE OF LORDS [1927]

at all. . . . . That is not exercising a discretion upon
materials properly before the judge; but it is depriving
a litigant of rights of which he is by law possessed, upon
grounds which it is not competent for the judge to treat as
grounds for the exercise of his discretion. Under these
circumstances I am of opinion that the cross-appeal must
succeed, and that the defendants are entitled to their
costs."

The deprivation of a party of his costs, if upon a ground
not warranted in law, is a determination of the judge in point
of law: see per Phillimore J., Westgate v. Crowe. (1)
Accordingly, the order of Branson J. as to costs, objected
to, as it was, on the ground stated by Lord Halsbury in the
judgment just cited, became an appealable order under s. 19
of the Judicature Act, 1873, just as for a reason completely
analogous is appealable under the same section the question,
whether there exists in law '"' good cause '"' enabling a judge
after verdict of a jury and in the exercise of his discretion
to order that the costs shall not follow the event, but shall
be dealt with in some other way.

Thus is brought to view the exact question which your
Lordships on this preliminary point have first to decide.
Is there any existent rule of this House as to appeals
for costs alone, be its terms what you will, which is
effective to stop in limine this particular appeal of the
appellants from this order of the Court of Appeal made
by that Court in the circumstances and on the grounds
stated ?

Now excluding as I do from consideration any possible
suggestion that the appeal is an abuse of your Lordships'
procedure—no one in the circumstances of this case has
made or could have made such a suggestion—I venture to
assert in answer that for two reasons quite independent of
each other, there can be no such rule.

First, this appeal is in this matter of costs indistinguishable
in principle from the appeal as to the presence of " good
cause' which was entertained and decided by the House

(1) [1908] 1 K. B. 24, 27.

A. C. AND PRIVY COUNCIL.

799

in Huxley v. West London Extension Ry. Co.(1) In such H. L. (B,)

cases, as had been observed by Brett M.R. in Jones v.
Curling (2), the Court [of Appeal] is bound to inquire whether
the condition exists which gives a judge jurisdiction to make
an order as to costs. In Huzaley's case (1) this House entered
upon the same inquiry—its reason for doing so being, I think,
correctly expressed in the headnote in the words, " that
if the Court or judge give effect to considerations which do
not constitute "good cause' within the meaning of the rule,
they exceed the limits of their jurisdiction; and on that
ground their decisions are not protected from review."
Equally so, here, my Lords. The question is, and is only,
whether the learned judge did or did not for an analogous
reason exceed his jurisdiction. As Lord Blackburn observed
in Metropolitan Asylum District Managers v. Hill (3), 'it
is not because the condition involves the payment of costs,
that, therefore, the question whether there is to be a condition
or not, is to be considered a mere dispute about costs."" The
real question here raised is only accidentally concerned with
costs.

But, my Lords, there is another reason which leads to the
same result. It is that, if the Court of Appeal was bound
to entertain the defendant's appeal, so under s. 3 of the
Appellate Jurisdiction Act, 1896, the House has the statutory
duty imposed upon it of hearing this appeal. In my judgment
that conclusion results from the decision in Secretary of
State for Home Affairs v. O'Brien (4) as embodied for
this purpose in the following passage from Lord Dunedin's
judgment: 'The generality of expression of a clause
which gives an appeal . . . . to the Court of Appeal is
indistinguishable from the generality of the clause which
gives an appeal from the Court of Appeal to this House. It
follows that the considerations urged in the case of Cox v.
Hakes (5), which case decided that appeal was not competent,
are equally applicable when the question is whether appeal in

(1) 14 App. Cas. 26. (3) 5 App. Cas. 582, 586.
(2) 13 Q. B. D. 262, 267. (4) [1923] A. C. 603, 620.
(5) 15 App. Cas. 506.

1927

ees
DoNALD
CAMPBELL
& Co.
Ve
POLLAK,

Lord
Blanesburgh.

800

HOUSE OF LORDS [1927]

H. L. (E.) such a case as the present lies from the Court of Appeal to

1927
~—
DoNnaAaLD
CAMPBELL
& Co.
v.
POLLAK.

Lord
Blanesburgh.

this House."

My Lords, the converse here is the case. By common
consent so far, for Mr. Bevan did not dispute and Mr. Jowitt
in terms adhered to that position in his reply, an appeal
in this case did lie to the Court of Appeal under s. 19 of the
Judicature Act, 1873. By s. 3 of the Appellate Juris-
diction Act, 1876—a clause of equal generality—an
appeal is given to this House. Why then does no appeal
lie in this case ? The only answer I have heard made is that
just as in O'Brien's case (1), the words, although wide enough
to cover an appeal from an order for the issue of a writ of
habeas corpus, could not have been intended to include such
an appeal, so here the words of s. 3 must be read so as to
exclude the competence of an appeal which impinges upon
your Lordships' .rule against hearing an appeal for costs
alone.

My Lords, I cannot think that O'Brien's case (1) can be
invoked to support that answer. I cannot think that the
exception there introduced, on the high ground that if it
were not, the section would have retraced what had been
"the evolutionary development of the constitutional liberty
of the subject '"—a backward step which a majority of your
Lordships were satisfied Parliament had no intention of
taking—can justify a similar exception in favour of a mere
rule of procedure so undefined in its scope that it offered no
hindrance to the free discussion in this House of Hualey v.
West London Extension Ry. Co. (2), an appeal on the present
footing indistinguishable in principle from this, as I hope
I have shown.

On this ground also, my Lords, I am of opinion that this
preliminary point should be determined in the appellant's
favour.

In reaching this conclusion I have proceeded on the
assumption made, as above appears, by counsel on both
sides that the authorities which required the Court of Appeal
to hear the appeal from the learned judge's order as to costs

(1) [1923] A. C. 603. (2) 14 App. Cas. 26.

A. C. AND PRIVY COUNCIL.

801

would not now be reviewed. And, as I apprehend, it is only H. L. (E.)

on that assumption that this preliminary point presents
any difficulty at all. For, if in truth the Court of Appeal
had no right of interference in this case: if the jurisdiction
which it purported to exercise was a usurped jurisdiction,
then the duty of this House to restore the parties to their
original position, if called upon to do so, would be clear.
On that view of the matter the House would, as it has always
done, merely be interfering with an order as to costs alone
where the Court below had no jurisdiction over them.

I. come now to the question of the actual ambit of the
rule. On that I have little to say. I have had the advantage
of reading in print the judgment of the Lord Chancellor,
and with that judgment upon this matter I am in entire
agreement. I would venture upon it to add only these
observations of my own.

First. The rule has never been described as one peculiar
to your Lordships' House. Lord Brougham, in his statement
of it in Inglis v. Mansfield (1), says it is common to this House,
the Privy Council and the Court of Chancery. The Lord
Chancellor has, I think, clearly shown that to extend it beyond
the limit which he himself sets for it would carry the rule in this
House beyond that of the Privy Council, the Court of Appeal
in Chancery or the Court of Appeal as now constituted. His
review of the authorities, I think, also establishes that this
appeal would to-day be cognizable in the Privy Council,
and it was, of course, entertained, from the respondent's
point of view, by the Court of Appeal. No case, since the
passing of the Judicature Act, has disclosed the existence
in this House of any rule which would make it incompetent
here. Hualey v. West London Extension Ry. Co. (2), and
less pointedly Metropolitan Asylum District Managers v.
Hill (3), show that no such rule was then operative. These
cases, on the one hand, with Caledonian Ry. Co. v. Barrie (4)
as reported, on the other, prove to my mind that
the existing rule in this House is really in accord with the

(1) 3Cl. & F. 362, 371. (3) 5 App. Cas. 582.
(2) 14 App. Cas. 26. (4) [1903] A. C. 126.

1927

WwW
DoNALD
CAMPBELL
& Co.

Vv.
POLLAK.

Lord
Blanesburgh.

802

H. L. (E.)
1927

es,
DoNALD
CAMPBELL
&- Co.

v.
POLLAK.
Lord
Blanesburgh.

HOUSE OF LORDS [1927]

statement of the Privy Council rule as contained or implied
in the words of Turner L.J. with which I commenced this
judgment. Since Barrie's case (1) the question has apparently
not been raised in this House, and from that fact and from
the further fact that no attempt was made in such
cases as Jones v. Curling (2), and the Civil Service Co-
operative Society v. General Steam Navigation Co. (3), to
test in this House the decisions of the Court of Appeal,
it has been suggested that since Barrie's case (1) the sense
of the profession has been that the avenue to this House
has been closed. But, if so, the profession misunderstood
Barrie's case (1), and, further Jones v. Curling (2) was a
'"" good cause'"' case. The Civil Service Society's case (3), as
the extract from Lord Halsbury's judgment in it above
cited shows, was like the present. And truly there was
no further appeal in either. But whatever may have been
the reason for that omission in the Society's case—poor
prospects seem a sufficient explanation—your Lordships'
rule ought to have had nothing to do with the absence of an
appeal in Jones v. Curling (2), for as Hualey v. West London
Extension Ry. Co. (4) subsequently showed, the rule would
have imposed no barrier whatever to the appellant's progress
to this House.

Secondly. The wider statement of the rule would seem
to exclude from your Lordships' competence an appeal for
his costs either by a trustee or mortgagee: and some colour
for the suggestion that these costs are to be regarded like any
other costs is to be found in the judgment of Lord Cottenham
in Home v. Pringle. (5) Mr. Jowitt, if I recollect aright, in
his opening argument on the first discussion of this preliminary
point contended that such costs were within the supposed
rule. Most certainly no statement of the rule brought to
your Lordships' notice has in terms excluded them. But no
mere rule of practice could ever be supposed to go so far
as to embrace within its operation questions touching the

(1) [1903] A. C. 126. (3) [1903] 2 K. B. 756.

(2) 13 Q. B. D. 262. (4) 14 App. Cas. 26.
(5) 8 Cl. & F. 264, 293.

A. C. AND PRIVY COUNCIL.

803

contractual right of trustees and mortgagees to their costs, H. L. (E.)

and I can hardly suppose that any of your Lordships
would desire to lay down or support a rule for this House
which would deprive either a trustee or mortgagee of the
privilege of having enforced here, if they have been denied
elsewhere, his rights in this matter, as defined once for all
by Lord Selborne in Cotterell v. Stratton (1), and by Sir
George Jessel M.R. in Turner v. Hancock. (2)

But how eloquent upon the extreme vagueness of the rule,
if carried beyond its admitted purview, is this necessary
but hitherto entirely unexpressed exception to it!

Thirdly. It is suggested that the rule of this House on
this subject may properly be more strict than the rule
either of the Court of Appeal or of the Privy Council,
inasmuch as an appeal to your Lordships is always at
least a third hearing. To my mind, this suggestion would
be more convincing if the rule were applicable only where
the findings below had been concurrent. But there is no
such limitation upon its operation, as is shown by the

views of those who justify its application to the present
case.

Fourthly. The rule as defined by the Lord Chancellor
protects the House from every mischief in relation to appeals
for costs alone, against which the House needs protection.
Any extension of the rule beyond that point can, I suggest,
only be justified by clear and irresistible authority, for it is
surely highly inexpedient that except to that extent the right
to receive or the liability to pay costs representing frequently,
as in this case, very large sums should be placed beyond
your Lordships' cognizance not by statute but by your
Lordships' own act.

In the result, I am of opinion that this preliminary
objection from whatever angle it be regarded should not be
sustained, and I concur in the motion which the Lord
Chancellor has made.

The hearing of the appeal on the merits was adjourned.
(1) (1872) L. R. 8 Ch. 295, 302. (2) (1882) 20 Ch. D. 303, 305.

1927
ma
DoNnAaLpD

CAMPBELL
& Co.

Lord
Blanesburgh.

804 HOUSE OF LORDS [1927]

H. L. (E.) |The arguments upon the hearing of the appeal sufficiently
1927 appear from the judgments.

——

Faroe 1927. May 13, 19, 20, 24. Stuart Bevan K.C. and
ss Barrington-Ward K.C. (with them HE. F. Spence K.C.) for the
PoLLAK. appellants.

ae Jowitt K.C. and Astell Burt for the respondent.

The House took time for consideration.

1927. July 29. Viscount Cave L.C. My Lords, the
preliminary objection to this appeal having been overruled
your Lordships are now called upon to dispose of the appeal.
In expressing my opinion on the preliminary question I
have sufficiently stated the facts ; and for the present purpose
it is enough to remind your Lordships that Branson J., who
tried this action without a jury, gave judgment for the
defendant (the present respondent) without costs; and that
on an appeal by the defendant, without the leave of the
judge, against so much of the judgment as related to costs,
the Court of Appeal set aside the judgment of the trial judge
and directed that judgment be entered for the defendant
with costs. The question to be determined is whether the
order of the Court of Appeal was right.

In order that this question may be answered, it is necessary
to consider first the nature and extent of the jurisdiction
of the Court of Appeal to review an order of the first Court
as to costs. It is true that no question of jurisdiction was
raised in the appellants' case on this appeal; but the
jurisdiction of a Court does not depend on the pleadings
or admissions of the parties to a suit, and, however such a
question may emerge, it is (I think) impossible for this House
to pass it by and to give its decision on the basis of the
existence of a jurisdiction which may or may not have been
conferred. JI propose, therefore, first to deal with this
question.

The jurisdiction of the Court of Appeal to review an order
of the trial Court as to costs depends on statutes and on
rules of Court which have the force of a statute; and the

A. ¢. AND PRIVY COUNCIL.

enactments which were in force when the judgment in question
was given were s. 49 of the Judicature Act, 1873 (now repre-
sented by s. 31, sub-s. 1 (A), of the Judicature Act, 1925),
s. 5 of the Judicature Act, 1890, and Order Lxv., r. 1, of the
Rules of the Supreme Court. The terms of these provisions
are as follows :— :

Judicature Act, 1873, s. 49.—'' No order made by the
High Court of Justice or any judge thereof, by the consent
of the parties, or as to costs only, which by law are left
to the discretion of the Court, shall be subject to any
appeal, except by leave of the Court or judge making such
order."

Judicature Act, 1890, s. 5.—''Subject to the Supreme
Court of Judicature Acts, and the rules of court made there-
under, and to the express provisions of any statute, whether
passed before or after the commencement of this Act, the
costs of and incident to all proceedings in the Supreme Court,
including the administration of estates and trusts, shall be
in the discretion of the court or judge, and the court or judge
shall have full power to determine by whom and to what
extent such costs are to be paid."

Rules. of the Supreme Court, Order Lxv., r. 1.—'"' Subject
to the provisions of the Act and these rules, the costs of and
incident to all proceedings in the Supreme Court, including
the administration of estates and trusts, shall be in the
discretion of the Court or judge; provided that nothing
herein contained shall deprive an executor, administrator,
trustee, or mortgagee who has not unreasonably instituted
or carried on or resisted any proceedings, of any right to
costs out of a particular estate or fund to which he would
'be entitled according to the rules hitherto acted upon in the
Chancery Division: Provided also that, where any action,
cause, matter, or issue is tried with a jury, the costs shall
follow the event, unless the judge by whom such action,
cause, matter, or issue is tried, or the Court, shall, for good
cause, otherwise order."

My Lords, at first sight these enactments would appear
expressly to deprive the Court of Appeal of any jurisdiction

805

H. L, (E.)
1927

ES
DonAaLp
CAMPBELL
& Co.
v.
PoLuak.

~ Viscount Cave
L.C.

806

H. L. (E.)
1927

ees
DONALD
CAMPBELL
& Co.
v.
POLLAK.

Viscount Cave
L.C.

HOUSE OF LORDS [1927]

to make the order now under appeal. Sect. 5 of the Act of
1890 provides that, subject to the Judicature Acts and rules
of Court, the costs of all proceedings in the Supreme Court
are to be in the discretion of the Court or judge. Rule 1
of Order Lxv. repeats this enactment, but provides that
in the case of a trial with a jury the costs shall follow the
event unless the Court shall for good cause otherwise order ;
and the effect of this exception in the case of trial with a
jury is to confirm and strengthen the absolute discretion
which in an action tried without a jury is conferred upon
the Court. It follows that in a non-jury case the costs are
"by law left to the discretion of the Court"; and if so,
then by the express terms of s. 49 of the Act of 1873 an order
as to those costs was not subject to any appeal except by leave
of the Court making the order. The Legislature had directed
that in this matter, as in others with which your Lordships
are familiar, the order of the first Court should be final.

But very little time had elapsed after the passing of the
Act of 1873 before an inroad was made upon the operation
of s, 49, and the breach then made in that section has grown
to such an extent that it is (I think) necessary now to review
the whole position. In making this review I do not propose
to deal with those cases (such as In re Foster v. Great Western
Ry, Co.(1) and In re Mills' Estate (2)), in which a tribunal
was held to have awarded costs without any jurisdiction
to do so; or with those other cases (such as The City of
Manchester (3) and Bew v. Bew(4)), in which a judge had
taken the mistaken view that he had no discretion as to
costs: for in such circumstances a Court of Appeal may
rightly intervene to decide the question of law. Nor is it
necessary to refer to the cases which have arisen as to costs
awarded under the County Courts Act or the Arbitration
Act, to which s. 49 of the Judicature Act, 1873, and the
corresponding section of the Act of 1925 have no application ;
or to the "good cause' cases, which relate to the costs of
a trial with a jury. I propose to confine my attention to

(1) (1881) 8 Q. B. D. 25. (3) (1880) 5 P. D. 221.
(2) (1886) 34 Ch, D. 24. (4) [1899] 2 Ch. 467.

A. ¢. AND PRIVY COUNCIL.

the reported cases, few in number, in which the Court of
Appeal has allowed an appeal from the exercise by a judge
of the Supreme Court of his discretion as to the costs of a
trial without a jury, no leave to appeal having been obtained.

The first of these cases is Civil Service Co-operative Society v.
General Steam Navigation Co.(1), in which the trial judge
(Bigham J.) had given judgment for the defendants, but
because the defendants had refused to refer the dispute to
him as arbitrator, had ordered that the parties should bear
their own costs. The defendants having appealed against
the order as to costs, the Court of Appeal entertained their
appeal and reversed the order, Lord Halsbury stating his
reasons as follows: '' No doubt, where a judge has exercised
his discretion upon certain materials which are before him,
it may not be, and I think is not, within the power of the Court
of Appeal to overrule that exercise of discretion. . But the
necessary hypothesis of the existence of materials upon which
the discretion can be exercised must be satisfied. In the
present case, so far as the evidence before me goes, I can see
no materials whatsoever upon which the learned judge could
exercise a discretion at all. The defendants were sued,
and rightly according to law resisted the suit, and finally
succeeded. In the judgment of Bigham J., and in the
judgment of this Court, they are right; and it practically
comes to this—that the learned judge has deprived the
persons sued of what, prima facie, is their right to the costs
of the litigation which has unsuccessfully been brought against
them because they will not submit to the learned judge
himself as arbitrator to say what should be done. That is
not exercising a discretion upon materials properly before
the judge; but it is depriving a litigant of rights of which
he is by law possessed, upon grounds which it is not competent
for the judge to treat as grounds for the exercise of his
discretion."" Lord Alverstone, the other member of the
Court, agreed, saying that "if it appears that a judge has
not exercised his discretion, or has decided upon grounds
which are not open to him, this Court can still deal with his

(1) [1903] 2 K. B. 756, 765, 766.

807

H. L. (E.)
1927

ees
DoNALD
CAMPBELL
& Co.
Vv.
POLLAK.

Viscount Cave
L.C,

808

He Ls'(E.)
1927

—s
DoNALD
CAMPBELL
& Co.

v.
PoOLLAK.
Viscount Cave
L.c.

HOUSE OF LORDS [1927]

decision''; and he relied on Granville & Co. v. Firth (1),
which, being a '' good cause' case, was not in point.

In King & Co. v. Gillard & Oo. (2), in which the
defendants were sued for passing off their goods as the goods
of the plaintiffs, Kekewich J. had given judgment for the
defendants, but had refused to order the plaintifis to pay
the defendants' costs on the ground that the wrappers in which
the goods in question were sold contained untrue statements
as to certain medals and awards. The Court of Appeal,
while dismissing the plaintiffs' appeal on the merits, allowed
a cross appeal by the defendants as to costs on the ground
that, even if the untrue statements on the wrappers were
calculated to deceive the public, the wrong so done was a
collateral matter and was not directly connected with the
plaintiffs' case. Stirling L.J. added that the case was very
near the line, and that, if the learned judge had exercised
his discretion on the ground taken by him combined with
other facts of the case, it would have been difficult to
interfere.

In Edmund v. Martell (3), an action by the landlords of
a dwelling-house against the tenant for waste by converting
part of the premises into a shop, Sutton J. gave judgment
for the defendant on the ground that the waste committed
by her was of the species known as ameliorating waste, but
he made no order as to costs, because he thought that the
defendant should have approached her landlords before
making the alterations. The decision of the learned judge
as to costs was reversed by the Court of Appeal, who held
that the defendant's failure to approach her landlords was
not relevant to the question to be determined between the
parties, and that the judge had "not really exercised his
discretion at all in the matter." It is noteworthy that in
this case also Lord Alverstone relied on Granville & Co. v.
Firth (1), a " good cause "' case.

Lastly, in Ritter v. Godfrey (4) an action against a medical
practitioner for negligence, McCardie J., who tried the action

ce

(1) 19 Times L. R. 213. (3) 24 Times L. R. 25.
(2) [1905] 2 Ch. 7. (4) [1920] 2 K. B. 47, 52, 60, 61.

A. C. AND PRIVY COUNCIL.

without a jury, found for the defendant, but refused to order
the plaintiff to pay the defendant's costs of action on the
ground that the defendant, in repudiating the plaintifi's
claim, had written some letters of an unsatisfactory and,
indeed, of an insulting character. The defendant having
appealed as to costs, the Court of Appeal took the view that
the correspondence did not afford ground for the exercise
of the judicial discretion to refuse to award costs to a successful
defendant, and on that view set aside the judgment of the
. trial judge and ordered that judgment be entered for the
defendant with costs. Lord Sterndale M.R., who concurred
in this decision with much doubt, stated the principle as
follows: '' This was a case tried without a jury before the
judge alone, and therefore in the absence of an order by him
neither party is entitled to any costs. It therefore differs
from a case tried before a jury, where there is a statutory
right to costs if there be no order to the contrary. But there
is such a settled practice of the Courts that in the absence
of special circumstances a successful litigant should receive
his costs, that it is necessary to show some ground for exercising
a discretion by refusing an order which would give them to
him. The discretion must be judicially exercised, and there-
fore there must be some grounds for its exercise, for a discretion
exercised on no grounds cannot be judicial. If, however,
there be any grounds, the question of whether they are
sufficient is entirely for the judge at the trial and this Court
cannot interfere with his discretion. On the authorities as
they now stand the line between cases tried before a jury
and cases tried by a judge is very fine." Atkin L.J. took
a more decided view, saying: "In the case of a wholly
successful defendant, in my opinion the judge must give the
defendant his costs unless there is evidence that the defendant
(1.) brought about the litigation, or (2.) has done something
'connected with the institution or the conduct of the suit
calculated to occasion unnecessary litigation and expense,
or (3.) has done some wrongful act in the course of the
transaction of which the plaintiff complains. ... . I am aware
of the inconvenience of fettering by rules the exercise of what
A. C. 1927. 3 31

809

H. L. (E.)
1927

aay
DONALD
CAMPBELL
& Co.
v.
POLLAK.

Viscount Cave
L.C.

810

Bal. (E.)
1927

weer
DoNALD
CAMPBELL
& Co.
V,
POLLAK.

Viscount Cave
L.C.

HOUSE OF LORDS [1927]

in terms appears to be an unfettered discretion. But it is
too late to contend for an arbitrary discretion over costs :
some rules undoubtedly there are that control the discretion :
and it seems hard to require a judge to exercise his discretion
according to rule, and yet not to be able to state what the
rule is. Nor if the rule is to be formulated does it appear
helpful to cast it in the negative form of a string of prohi-
bitions leaving the guiding principles to be deduced from
them." Eve J. took a similar view, holding that a judge,
however much he might disapprove of the defendant's
behaviour, was not entitled to refuse him his costs unless
he had material upon which he was prepared to hold judicially
that the defendant had thereby created a mistaken belief in
the plaintiff's mind, or that his misconduct was the real
cause of the action being brought.

My Lords, these authorities appear to me to indicate a
progressive tendency on the part of the Court of Appeal
to review the exercise by trial judges of their discretion as
to costs, with the result that the Court has travelled far from
the categorical terms of s. 49 of the Act of 1873. The decision
in the Cwil Service Co-operative Society's case (1) may no
doubt be supported by the consideration, which obviously
weighed with Lord Halsbury, that the trial judge in that
case had taken action, not upon materials which emerged
in the trial itself, but upon his personal view that no trial
should properly have been insisted upon: and in such circum-
stances there may well have been ground for holding that
he had not really exercised his discretion. But the fraudulent
conduct of the defendants in King & Oo. v. Gillard & Co. (2),
and in Hdmund v. Martell (3) the circumstance that the
defendant had altered the character of the plaintiffs' property
without consulting them, were surely sufficiently connected
with the matters in dispute to entitle a judge having
a wide discretion to take them into account when
awarding costs; and the same may, I think, be said
of the conduct of the defendant in Ritter v. Godfrey (4)

(1) [19 03]2 K. B. 756. (3) 24 Times L. R. 25.
(2) [1905] 2 Ch. 7. (4) [1920] 2K. B. 47.

A. C. AND PRIVY COUNCIL.

towards persons who had suffered a real sorrow while one
of them was under his care. Further, the language used
in the last mentioned case by Atkin LJ. and Eve J.,
who expressed the opinion that the trial judge in a non-
jury case "'must" give the successful defendant his costs
except in certain cases which they defined, is difficult
to reconcile with the statutes and rules which give him an
absolute and uncontrolled discretion. Indeed the rules laid
down in that case by those learned judges bear so close a
resemblance to those which would guide a judge in determining
whether there was '" good cause" for depriving of his costs
a successful defendant in an action tried with a jury, that,
if they are held to be binding, little or no difference will be
left between the power of a judge over costs in an action
tried with a jury and that which the statute gives him in
the case of a trial without a jury. A gloss upon the statute
which leads to so complete a frustration of its purpose surely
calls for very close and critical examination in your Lordships'
House; and, although some of the cases cited have stood
unchallenged for a good many years, I do not think that it
is too late for this House, which now for the first time has
seisin of the matter, to review them. The protest of North J.
in Walter v. Steinkopff (1), and the doubts expressed by
Stirling L.J. and Lord Sterndale, have kept the question
open ; and in any case the matter is one, not of mere procedure,
but of statutory right, and no course of decision can override
the statute.

My Lords, it appears to me that the true view is substantially
that taken by Lord Sterndale in the above quoted passage
in his judgment in Ritter v. Godfrey (2), although I would
express it in somewhat different language. A _ successful
defendant in a non-jury case has no doubt, in the absence
of special circumstances, a reasonable expectation of obtaining
an order for the payment of his costs by the plaintiff; but
he has no right to costs unless and until the Court awards
them to him, and the Court has an absolute and unfettered
discretion to award or not to award them. This discretion,

(1) [1892] 3 Ch. 489, 500. (2) [1920] 2 K. B. 47.
3 312

811

H. L. (E.)
1927

aE,
DoNALD
CAMPBELL
& Co.
v.
POLLAK.

Viscount Cave
L.C.

812

Be 1). (E)

1927
"~
DONALD
CAMPBELL
& Co.
v.
POLLAK.

Viscount Cave
L.C.

—

HOUSE OF LORDS [1927]

like any other discretion, must of course be exercised judicially,
and the judge ought not to exercise it against the successful
party except for some reason connected with the case.
Thus, if—to put a hypothesis which in our Courts would
never in fact be realized—a judge were to refuse to give a
party his costs on the ground of some misconduct wholly
unconnected with the cause of action or of some prejudice
due to his race or religion or (to quote a familiar illustration)
to the colour of his hair, then a Court of Appeal might well
feel itself compelled to intervene. But when a judge,
deliberately intending to exercise his discretionary powers,
has acted on facts connected with or leading up to the litigation
which have been proved before him or which he has himself
observed during the progress of the case, then it seems to
me that a Court of Appeal, although it may deem his reasons
insufficient and may disagree with his conclusion, is prohibited
by the statute from entertaining an appeal from it.
Judged by these tests I doubt whether the decisions in King
& Co. v. Gillard & Co. (1), Edmund v. Martell (2) and Ritter v.
Godfrey (3) can be supported; and judged by the same tests
I am satisfied that the order made by the Court of Appeal
in the present case cannot stand. Even if the rules laid
down in Ritter v. Godfrey (3) were to be applied, I should
find difficulty in holding that, in the present case, Branson J.
had no materials for the exercise of his discretion. The
verdict on which the learned judge proceeded was rendered
in the consolidated action, and was, therefore, part of the
proceedings in the present action; and it was frequently
referred to in the evidence given during the new trial of this
action. It was, therefore, fully before the learned judge,
and he was entitled to take it into account in considering
whether the defendant had brought this litigation upon
himself and to decline on that ground to give him the costs
of the action. Further, although the verdict formed the
main ground for the judge's decision as to costs, he stated
that other points also had weight with him ; and the influence

(1) [1905] 2 Ch. 7. (2) 24'Times L. RB. 25.
(3) [1920] 2 K. B. 47.

A. C. AND PRIVY COUNCIL.

of those other points on his mind could not be and was not
estimated by the Court of Appeal. On the merits, therefore,
and assuming that the Court of Appeal had power to interfere,
I should be disposed to allow this appeal; and, if your
Lordships should agree with the view which I have expressed
on the question of jurisdiction, it is clear that the appeal
should succeed.

For these reasons I am of opinion that the order of the
Court of Appeal should be set aside and the order of
Branson J. restored. But as the principal question discussed
in this judgment was not raised by the present appellants
either in the Court of Appeal or in their case for the present
appeal, I am content that there should be no costs of the
appeals to the Court of Appeal and to this House, except
so far as such costs have already been disposed of on the
hearing of the preliminary objection. J move your Lordships
accordingly.

' Viscount Dunepin. My Lords, I have had the advantage
of perusing the judgment which has just been delivered by
the Lord Chancellor. I concur in that judgment, and I have
nothing to add.

Lorp Atkinson. My Lords, I think it is well established
that when the decision of such a matter as the right of a
successful litigant to recover his costs is left to the discretion
of the judge who tried his case, that discretion is a judicial
discretion, and if it be so its exercise must be based on facts.
A good deal of the arguments addressed to the House on
behalf of the appellants in this case appeared to me to go
the length of contending, either that the discretion of the
judge was absolute and unfettered, or that, though the
exercise of it might have given free scope to whim
or prejudice, it must be assumed that, where discretion is
given to a judge, it will always be properly exercised, the
judge not being bound to disclose the facts, if any, upon
which he acted. If, however, there be, in fact, some grounds
to support the exercise by the trial judge of the discretion

813

H. L. (E.)
1927

eS
DoNALD
CAMPBELL
& Co.

v.
PoLuak.
Viscount Cave
L.c.

814

H. L. (E.)
1927

as
DONALD
CAMPBELL
& Co.
v.
POLLAK,.

Lord Atkinson.

HOUSE OF LORDS [1927]

he purposes to exercise, the question of the sufficiency of
those grounds for this purpose is entirely a matter for the
judge himself to decide, and the Court of Appeal cannot
interfere with the exercise of his discretion in that instance.
I take this statement of the law, applicable to cases tried
without a jury, from the judgment of Lord Sterndale M.R.
in the case of Ritter v. Godfrey.(1) He said: " This was
a case tried without a jury before the judge alone, and
therefore in the absence of an order by him neither party is
entitled to any costs. It therefore differs from a case tried
before a jury, where there is a statutory right to costs if there

be no order to the contrary. But there is such a settled

practice of the Courts that in the absence of special circum-
stances a successful litigant should receive his costs, that
it is necessary to show some ground for exercising a discretion
by refusing an order which would give them to him. The
discretion must be judicially exercised, and therefore there
must be some grounds for its exercise, for a discretion
exercised on no grounds cannot be judicial. If, however,
there be any grounds, the question of whether they are
sufficient is entirely for the judge at the trial, and this Court
cannot interfere with his discretion. On the authorities
as they now stand the line between cases tried before a jury
and cases tried by a judge is very fine. One other consideration
applies to these cases. The principle as to the exercise of
discretion is the same in the case of plaintiffs and defendants,
but it is clear that considerations sufficient to justify a
refusal of costs to a plaintiff are not necessarily sufficient
in the case of a defendant, for the former initiates the
litigation, while the latter is brought into it against his will."

My Lords, I think this judgment of Lord Sterndale contains
a clear, condensed and accurate statement of the law and
of the prevailing practice on the points with which it deals.
He then proceeds to state what, in his view, is regarded as
sufficient ground for refusing a defendant his costs. He
says: "' Speaking generally, I think it may be said that,
in order to justify an order refusing a defendant his costs,

(1) [1920] 2 K. B. 47, 52.

acini itn he aaa eee

a

A. C. AND PRIVY COUNCIL. 815

he must be shown to have been guilty of conduct which H. L. (E.)
induced the plaintiff to bring the action, and without which — 1927
it would probably not have been brought. This is so stated Donarp
by Vaughan Williams L.J. in Bostock v. Ramsey Urban = C6.
Council." (1) This last is a very important case, because peer
it follows the decision of the Court of Appeal in Harnett v. ...4 Auinson,
Vise (2), and lays down the important principle, that in er
exercising his discretion under Order Lxv., r. 1, in a case
heard by a jury, a judge is not confined to the consideration
of the defendant's conduct in the actual litigation itself.

A. L. Smith L.J., in giving judgment in the Court of Appeal
in the former case, said (3): '' It seems to me that the Lord
Chief Justice was right when on general principles he came
to the conclusion that 'the judge is not confined to the con-
sideration of the defendants' conduct in the actual litigation
itself, but may also take into consideration matters which
led up to and were the occasion of that litigation.'"' The
Lord Justice proceeded: "I say on _ general principles,
because his attention does not appear to have been called
to the case of Harnett v. Vise (2), in which it was distinctly
held by the Court of Appeal that the judge is not confined,
in considering the question whether there is good cause for
depriving the successful party of costs, to the conduct of
the parties in the litigation itself, but must consider the
whole circumstances of the case and everything which led
to the action. I think that in this case there was evidence
of conduct on the part of the defendants such as to lead the
plaintiff reasonably to think that he had a good cause of
action against them, and which the judge was entitled to
take into consideration as constituting good cause for
depriving the defendants of costs." Vaughan Williams and
Romer L.JJ. concurred. The last named Lord Justice, in
delivering judgment, said (4): "It is clear that the ' good
cause' referred to by Order Lxv., r. 1, is not confined to
cause founded upon the conduct of the successful party in
the course of the litigation. It might, for example, in the

(1) [1900] 2 Q. B. 616. (3) [1900] 2 Q. B. 622.
(2) (1880) 5 Ex. D. 307. (4) [1900] 2 Q. B. 627.

816

H. L. (E.)
1927

ees
DONALD
CAMPBELL
& Co.

v.
PoLuak.

Lord Atkinson.

HOUSE OF LORDS [1927]

case of a successful defendant, be founded on conduct of
the defendant outside the action, if the conduct were such
as to have led the plaintiff reasonably to suppose that he
had a good cause of action, and thus induced him to bring
the action. I limit the proposition so as to show clearly
that I do not consider that such conduct on the part of the
defendant would constitute good cause within Order LXv.,
r. 1, if it had no reference to the action, and did not induce
the plaintiff reasonably to believe that he had a right of
action." In the case of Harnett v. Vise (1) the action was
brought by a doctor who practised at Barnet against the
defendant and his wife for a letter written by the latter to
an old lady named Perkins, who had for some time been
confined in a lunatic asylum, but was at the date of letter
convalescent, warning her against having any further
communications with the plaintiff and making reflections
upon him. The defendant traversed the innuendoes alleged
in the statement of claim, pleaded that the letter was a
privileged ,communication and also pleaded a justification.
The case was tried before Huddleston B. and a special jury.
The judge ruled that the letter was not a privileged com-
munication, and the jury found a verdict for the plaintiff
for 10]. damages. After the verdict had been returned the
counsel for the defendant applied to the judge to exereise
his power under Order Ly. (then the proper Order) and deprive
the plaintiff of his costs on the ground that he had brought
the libel on himself by his incautious conduct. The learned
judge acceded to this application and refused to allow the
plaintiff his costs. An application was made by the plaintiff
to the Court of Exchequer to rescind this order, which was
refused. The plaintiff appealed to the Court of Appeal.
The appeal was heard by James L.J., Brett L.J. (as he then
was) and Cotton L.J. In delivering judgment James L.J.,
after referring to the amount of the damages awarded, said (2) :
"Every judge would take it as a material element in con-
sidering whether the jurisdiction given by Order Ly. is to
be exercised or not. But it is the duty of the judge who
(1) 5 Ex. D. 307. (2) 5 Ex. D. 311.

A. ¢. AND PRIVY COUNCIL.

tried the case, and the duty of the Court of Appeal also, to
consider the whole circumstances of the case, everything
which led to the action, everything which led to the libel,
everything in the conduct of the parties which may shew
that the action was not properly brought in respect of the
libel complained of."

Of the many judicial criticisms which have been passed
upon this Order Lxv., r. 1, and its application none is, I think,
clearer and more helpful than that of Bowen L.J. (as he then
was), passed in the case of Jones v. Curling (1), an action
tried before a judge and jury. [His Lordship then repeated
the passage cited by him in his judgment on the preliminary
objection down to the sentence: '' When, however, this juris-
diction is established, then I think there is no appeal unless
the judge's discretion is exercised in such a wrong way as
to make it no reasonable exercise of discretion at all.'']
These last words are very significant, and mean that if
the established facts of the case amount to such good
cause as to give the judge jurisdiction to exercise his
discretion, he must exercise that discretion in such a way
as to amount to a reasonable exercise of it. An exercise
of it based on whim or prejudice would be insufficient.
The Court, composed of Brett M.R., Bowen and Fry L.JJ.,
held that to be good cause within this rule there must
be facts showing that it would be more just not to allow
costs to follow the event as, for example, oppression or
misconduct of either of the parties by which costs have
been unnecessarily increased. In an appeal to this House
in the case of Hualey v. West London Extension Ry. Co. (2)
Lord Watson said he would not attempt to define what good
cause was, but that, in his opinion, it embraced everything
for which the party is responsible connected with the susten-
tation and conduct of the suit and calculated to occasion
unnecessary litigation or expense; he said: "'So long as the
judge or Court deal with considerations of that kind, the
sufficiency or insufficiency of these considerations as affording
a reason for disallowing costs are matters of which they are

(1) 13 Q. B. D, 262, 271. See ante, p. 771. (2) 14 App. Cas. 26, 34.

817

H. L. (E.)
1927

Ww
DoNnALD
CAMPBELL
& Co.

v.
POLLAK.

Lord Atkinson.

818 HOUSE OF LORDS [1927]

H. L. (E.) constituted sole arbiters; they are acting within their
1927 jurisdiction and their decisions are final and conclusive.'' So

—

Donato much for the case under the proviso to this rule. There
esi tea remains the question as to what is the nature of the discretion
Poms, ax, conferred upon the judge in cases tried by a judge without
Lord Atkinson, 2 Jury. Is it entirely arbitrary, subject to no qualification
ay or restraint ? Must a litigant who has succeeded in a suit
and has not been guilty of misconduct of any kind be,
on being deprived of his costs, content with the assurance
that a judge exercised his discretion properly, though he has
not mentioned or even suggested what the grounds were

upon which he based the exercise of that discretion 4
The decision in the case of Kierson v. Joseph L. Thompson
& Son (1) throws some light upon the question of judicial
discretion as to everyday cases. The facts are stated with
sufficient fullness in the headnote and the judgment of Cozens-
Hardy M.R., concurred in by Buckley and Hamilton L.JJ.:
"A workman who was in receipt of a weekly payment of
13s. 5d. from his employers as compensation for an accident
within the meaning of the Workmen's Compensation Act,
1906, entered into an agreement to accept 100/. in satisfaction
of the employers' liability. The workman applied to the
registrar to have a memorandum of the agreement recorded.
The registrar, being dissatisfied with the amount of the
commutation, referred the matter to the judge. Both parties
appeared and supported the agreement. The judge overruled
the objection as to quantum, and directed the memorandum
to be recorded, ordering the employers to pay the costs.
The employers appealed from the order as to costs." The
Master of the Rolls in giving judgment said: '' Both the
employers and the workman were then cited to appear and
did appear before the judge. The objection to the agreement
was solely based on quantum, and this objection the judge
overruled, and held that the memorandum should be recorded.
Assuming, as I do, that the judge had a discretion as to
costs, it must be exercised judicially, and, in my opinion, it
was not a judicial exercise of his discretion to order a party

(1) [1913] 1 K. B. 587, 589.

A. C. AND PRIVY COUNCIL. 819

who has been completely successful and against whom no H. L. (E.)

misconduct is even alleged to pay costs"; see also ih
Hudsons, Ld. v. De Halpert (1); Levy v. Johnson. (2) Donaup
CAMPBELL

In Ritter v. Godfrey (3) Atkin L.J. criticized with great ~& Co.
fullness and force all the cases I have referred to and some 4,."",,
others in addition ; he began his judgment thus: "In order 1.3 Atiinson,
to determine this appeal it seems to me necessary to pass in ss
review some of the more recent authorities which have dealt
with the provisions of Order Lxv., r. 1. Costs are to be in
the discretion of the Court or judge." (The judge who tried
this case had refused to give the successful defendant his
costs.) "'If this discretion is absolute the appellant must
fail; if the discretion is limited, then the appellant must
show that the exercise of the discretion in this case exceeded
the proper limits. I think that it will appear from the
authorities to be mentioned that the discretion of the Court
or a judge is not an absolute discretion, but must be exercised
subject to certain governing principles which in this appeal
it seems to me necessary to ascertain."

He then divides the authorities into two groups, the first
group comprising trials by a judge and jury, and the second
trials by a judge alone, and he says: "' Where the Courts
have held that there is good cause for deprivation of costs
after trial by jury, I think it clear that under similar circum-
stances after trial without a jury the exercise of the discretion
in the same way must be justifiable." For the purpose of
the present case, I pass over the learned Lord Justice's com-
ments on the cases in which there was a trial by jury, and
only refer to his criticisms on those cases in which there was
no jury. The first case with which he deals is Civil Service
Co-operative Society v. General Steam Navigation Co. (4) The
learned judge who tried the case had deprived the successful
defendants of their costs, apparently because they would
not submit to the learned judge himself, as arbitrator, saying
what in the circumstances should be done. The learned
judge did not state why he had deprived the successful

(1) (1913) 108 L. T. 416. (3) [1920] 2 K. B. 47, 54.
(2) (1913) 29 Times L. R. 507. (4) [1903] 2 K. B. 756, 765.

820

H, L. (B:)
1927

DONALD
CAMPBELL
& Co.

v.
POLLAK.

Lord Atkinson,

HOUSE OF LORDS [1927]

defendants of their costs. If his discretion was absolute

there was an end of the matter. It could go no further.
The Court of Appeal would not be concerned with the
question whether he had grounds for the exercise of his
discretion or not. The Court of Appeal took precisely the
opposite view. Lord Halsbury, in giving judgment, after
referring to what the judge at the trial did, said: '" That
is not exercising a discretion upon materials properly before
the judge; but it is depriving a litigant of rights of which
he is by law possessed, upon grounds which it is not competent
for the judge to treat as grounds for the exercise of his
discretion."

The next case to which the Lord Justice refers is that of
King & Co. v. Gillard & Co.(1) It was a passing off action.
The judge held that there was no passing off, but
deprived the defendants of their costs on the ground that
there were misleading and untrue statements in the
advertisement upon some of the defendants' packages
which were calculated to deceive the public, though
they had no bearing on the question of passing off.
It was held by the Court of Appeal that the defendants
had not acted dishonestly, but that even if they had been
guilty of misrepresentation it had no relation to the plaintiffs'
case, and was not therefore a ground on which the judge
had a discretion to deprive the defendants of their costs.
The learned Lord Justice next refers to the case of Edmund v.
Martell (2), heard in 1907. The judge at the trial had deprived
the defendant of her costs on the ground that before she had
done one of the acts which were complained of by the landlord
she ought to have consulted him. Lord Alverstone, who was
presiding in the Court of Appeal, after referring to Civil Service
Co-operative Society v. General Steam Navigation Co. (3), said
that the case then before the Court "' was an a fortiori case.
Mr. Justice Sutton thought that because the defendant did not
approach her landlord on the matter of converting the house
into a shop she should be deprived of costs. That had nothing

(1) [1905] 2 Ch. 7. (2) 24 Times L. R. 25.
(3) [1903]2 K. B. 756, 765.

ee EE EEE

A. C. AND PRIVY COUNCIL. 821

2

to do with the grounds of the action." Buckley L.J. (as he H. L. (E.)
then was) said: 'The facts upon which a judge could exercise —_—-1927
his discretion in depriving a successful litigant of costs must DONALD
be facts relevant to the question to be adjudicated upon as aga bis
between the plaintiff and the defendant. The judge had no eae
power to deprive the successful litigant of costs because in re

Lord Atkinson,
some matter not material he might think that that party -: —
should have behaved, say, with more courtesy or considera-
tion. These were not matters upon which the Court
could act."

To Higgins v. Higgins & Co. (1) Atkin L.J. next refers. It
was a case under the Workmen's Compensation Act. The
judge in such cases is given by the Act the same discretion
as to costs as is given by the terms of Order Lxv., r. 1. There
the judge had made a declaration of liability, and had
ordered the employers, who were considered by the Court
of Appeal to have been successful, to pay the costs.
Bankes L.J., in giving judgment, said: "By para. 7 of
Sch. II. of the Workmen's Compensation Act, 1906, the costs
of and incidental to the arbitration and proceedings connected
therewith are in the discretion of the arbitrator, just in the
same way as the costs of proceedings in the High Court are
in the discretion of the judge where the case is not tried by
a jury under Order Lxv., r. 1. In both cases, however, the
discretion is fettered by a well accepted rule which was stated.
by Lord Halsbury in Civil Service Co-operative Society v.
General Steam Navigation Co. (2), in these words: ' No doubt,
where a judge has exercised his discretion upon certain
materials which are before him, it may not be, and I think
is not, within the power of the Court of Appeal to overrule
that exercise of discretion. But the necessary hypothesis
of the existence of materials upon which the discretion can
be exercised must be satisfied.' "

Lower down (3), Atkin L.J. proceeds to lay down three
principles by which a judge may be able to discern whether
the materials necessary to support the exercise of his judicial

(1) [1916] 1K. B. 640, 643. (2) [1903] 2 K. B. 756, 765.
(3) [1920] 2 K. B. 60.

822

H. L. (E.)
1927

Gis,
DoNALD
CAMPBELL
& Co.

Vv.
POLLAK.

Lord Atkinson,

HOUSE OF LORDS [1927]

discretion exist in any given case. The principles he shortly
stated as follows: "In the case of a wholly successful
defendant, in my opinion the judge must give the defendant
his costs unless there is evidence that the defendant
(1.) brought about the litigation, or (2.) has done some-
thing connected with the institution or the conduct of
the suit calculated to occasion unnecessary litigation and
expense, or (3.) has done some wrongful act in the course
of the transaction of which the plaintiff complains, These
principles require further expansion. By (l.) is meant—
has so conducted himself as to lead the plaintiff reasonably
to believe that he had a good cause of action against the
defendant, and so induce him to bring the action. The
authority for this proposition is Bostock v. Ramsey Urban
Council. (1) It is wide, for in terms it is not limited to
unreasonable or improper conduct, or to conduct other than
that which constitutes the alleged cause of action. Inasmuch
as the bringing of many actions of contract and most actions
of tort is due to the effect upon the plaintiff's mind of
defendant's conduct, and the effect is at any rate to induce
a belief that the plaintiff has a good cause of action, it would
appear to follow that, provided the belief was reasonable the
judge in all such cases has grounds for depriving a successful
defendant of costs. I presume e converso there would be
grounds for dealing with a successful plaintiff's costs when
his conduct has induced the defendant reasonably to believe
that he has a good defence. I am inclined to think therefore
that the propositions in Bostock v. Ramsey Urban Council (1)
should be read subject to the first, if not also to the second, of
the limitations suggested above—i.e., subject to the conduct
being unreasonable or improper, and being conduct other
than that which constituted the alleged cause of action."
Eve J. delivered a clear and able judgment to the same effect.

In my view, it necessarily follows from those authorities
that if a defendant in a case tried before a judge alone be
charged with fraud and successfully defends himself against
that charge, he may yet be deprived of his costs if he has

(1) [1900] 2 Q. B. 616.

A. C. AND PRIVY COUNCIL.

in fact been guilty of misconduct coming within one of the
classes indicated by Atkin L.J. There is no such principle
or rule of practice that, if a defendant accused of fraud obtains
from either a judge or jury a decision that he is not guilty
of the fraud, he is necessarily entitled to his costs, whatever
his conduct in other respects, and cannot be justly deprived
of them.

Branson J., at p. 62 of the Appendix, when dealing with
the two actions which were brought, the one by the firm
against Pollak and the other by the liquidator against the
same man, explains the relation in which they stood to each
other, and points out that it is the company's claim of which
he is now endeavouring to dispose. He then, at p. 92 of
the Appendix, when giving judgment, spoke as follows:
"I do not think it is either necessary or desirable that I
should go in great detail through all the many facts of this
long and troublesome action, which has lasted some nine
days before me. I think it is sufficient for me to say this,
that in my view the real reason why the action was brought
by the liquidator, and the real reason which forced him,
in my view, in the proper execution of his duty, and also
the creditors of the company, to bring the action, was the
fact that Mr. Pollak had, in his dealings with Said, begun
with a concealed partnership with Said, of which every trace
was kept out of the books, and that so far as anybody looking
at the books is concerned, once it appears that Pollak was a
partner with Said in the first of the transactions in which
Said took part, there is nothing to show when he ceased to
be a partner. I think a man who puts himself into that
position has only himself to blame if anybody who is concerned
to make him liable on the contracts with Said which follow
brings an action against him in respect of them. That is
the main ground put forward by the liquidator for the course
which he asks me to take in the matter, and it is the main
ground upon which I accede to the request that he makes.
The real reason why I am doing what I propose to do in
this case is, as I have stated, the fact that I believe that if
it had not been for Pollak entering into this partnership with

823

H. L. (E.)
1927
Ww

DonaLp
CAMPBELL
& Co.
v.
POLLAK.

Lord Atkinson,

824

HAl.0(E.)
1927

—
DONALD
CAMPBELL
& Co.

v.
POLLAK.
Lord Atkinson.

HOUSE OF LORDS [1927]

Said in the way in which he did, and keeping all the record
out of the books which would lead anybody to know it, and
keeping the knowledge of it from his subordinates in the
department, this action need not have been brought. It
was his fault that it was brought, because his conduct, and
guilty conduct, in a matter which is outside the immediate
cause of action which is being brought against him here,
and so satisfies every one of the limitations which are stated
by Lord Justice Atkin is the real cause of the initiation and the
prosecution of this litigation. The result is that I think
this is one of those cases in which it is clear that the defendant
has brought the litigation upon himself, and by the way in
which he has behaved himself, and consequently is an
appropriate case in which, in the exercise of the discretion
which in such cases I possess, I should say that I make no
order for costs."

The Court of Appeal appear to me to have based their
decision on this ground, that Pollak is not estopped by the
verdict of the jury against him from denying that he was
dealing improperly in speculating with Said, of which no
mention was made in the books of the firm, or by the finding
of the jury that he did not inform the other members of the
firm that he was doing so, that accordingly it was open to
Pollak to deny on oath both the accusation which the jury
in the first action found to be true, that he reiterated the
statement he had made at the first trial on these points, and
that none of the members of the firm were produced on the
second trial as they were upon the first to prove that Pollak
never asked for or got the consent of his co-partners to the
course of dealing he pursued. Branson J. held that Pollak
was not guilty of the fraud charged against him on the second
trial, but, notwithstanding this, he was clearly of opinion
that he was shown to be guilty of the misconduct, which he
indicates and describes, of a character which entitled the
judge to deprive him of costs. That is a wholly different
thing—if the learned judge was entitled to take into con-
sideration the whole circumstances of the case and every-
thing which led up to the action. The cases of Harnett v.

A. C. AND PRIVY COUNCIL.

Vise (1) and Bostock v. Ramsey Urban Council (2) decide that
he was so entitled, then, if so, there were, in my opinion, some
grounds to support his order. And if there were, he had
jurisdiction to make it, and neither the Court of Appeal nor
this House have any jurisdiction to interfere with his order,
because they are of opinion that the grounds were insufficient.
In my view then the appeal succeeds.

THE Lorp CHanceLttor. My noble and learned friend
Lord Phillimore desires me to say that he agrees with the
judgment which I have delivered.

Lorp Carson (read by Viscount Dunepin): My Lords,
I agree with the motion proposed by the noble Viscount
on the Woolsack. I am not at all sure that the course
of legal decisions has not gradually so circumscribed the
discretion as to costs given to a judge in cases tried by him
alone without a jury as to render such discretion almost
nugatory. Indeed, Atkin L.J. in the quotation made by the
noble Viscount from his judgment in Ritter v. Godfrey (3),
seems to lay down that such discretion must be exercised
under formulated rules, which appear to me to leave very
little '"'discretion" to the judge. It is not surprising,
therefore, in this state of the authorities that protracted
litigation as to costs only should ensue, involving in some
cases a rehearing of the action and a reproduction of the
evidence and documents used at the trial in order to enable
a full inquiry as to whether the judge has acted within the
rules laid down in the cases already decided. This, I think,
is a result quite contrary to what was intended by the
provisions of the Judicature Acts and the Rules of the Supreme
Court already quoted, which drew a clear line as to costs
where issues were tried before a judge and a jury respectively.
It seems strange that in the course of so many authorities
so little attention has been given to s. 49 of the Judicature
Act, 1873. The words of the section are clear and explicit,

(1) 5 Ex. D. 307. (2) [1900] 2 Q. B. 616.
(3) [1920] 2 K. B. 47.
A. C. 1927. 3 3 K

825

H. L. (E.)
1927

od
DONALD
CAMPBELL
& Co.

Vv.
POLLAK.

Lord Atkinson.

826

H. L. (E.)
1927

Se
DoNnALD
CAMPBELL
& Co.

v.
POLLAK.

Lord Carson.

HOUSE OF LORDS [1927]

and deal not with the exercise of the discretion but with the
question whether the discretion is conferred upon the judge,
and, in my opinion, no matter what the practice may have
been hitherto, we are bound to give full effect to it. The only
question we have to determine under that section is : Was
the order of Branson J. as to costs made in a case where the
costs are by law left to the discretion of the Court? The
very basis of the appeal is that the learned judge had such
a discretion and, indeed, that could not be disputed. In
such a case the section says that the order made by the judge
is not subject to appeal, and therefore neither the Court of
Appeal nor this House is competent to entertain such an
appeal. :

Whilst, therefore, it is, of course, true that a judge ought
to exercise his discretion judicially, whether he has done
so or not is a question which cannot be raised on appeal as
to costs, unless the judge gives leave as provided by the
section.

Order of the Court of Appeal reversed, and
judgment of Branson J. restored. The
respondent to pay the costs of the petition
praying that the appeal might not be received
as being incompetent, and also the costs of
the hearing at the Bar on the question of
competency ; and, save as aforesaid, no costs
to be allowed to either side here or in the Court
of Appeal. Cause remitted back to the
King's Bench Division to do therein as shall
be just and consistent with this judgment.

—Lords' Journals, July 29, 1927.