With reference to the relevant Rules of Court 2012 and case law explain the instances when a

winning party can be made liable to pay the losing party’s costs.
(10 marks)

Costs are defined by Order 59 rule 1 of Rule of Court 2012 (ROC) as fees, charges,
disbursements, expenses and remuneration. The objective of awarding cost to the litigant is to
indemnify him for the expenses he had incurred in successfully establishing his legal rights. By
virtue of Order 59 rule 2 of Rule of Court 2012 (ROC), costs of proceedings or costs shall be
at the discretion of the court. In other words, the court has full power to determine by whom and
to what extent the costs are to be paid. Generally, the costs follow the event, namely, the losing
party must pay the costs for the winning party and bear his own costs as laid down under Order
59 rule 3(1). For instance, in the case of Petroliam Nasional Bhd (Petronas) & Anor v Cheah
Kam Chiew [1987] 1 MLJ 25, the court held that costs follow the event and that the successful
party is entitled to be paid his costs except when it appears to the court that in the
circumstances of the case some other order should be made.

Even though, Order 59 rule 3(2) provides that the court shall order the costs to follow
the event, there are few instances or exceptions to the rule that costs follow the event.

Firstly, the winning party can be made liable if there is any element of misconduct or
neglect attributed by the winning party. This statutorily expressed in Order 59 Rule 5 which
provides that the Court may make an order for the winning party to pay the costs, where there
has been misconduct or neglect on the part of the winning party. In the case of Chen Chow Lek
v Tan Yew Lai [1983] 1 MLJ 170, the court allowed the appeal of the appellant in a sales
agreement of property. In this case, the court found that had the appellant been co-operative,
the case would not have come to court and the respondent would not have initiated the civil suit.
The litigation was completely unnecessary and could have been avoided if not for the
appellant’s attitude. Thus, even though the appellant won the suit, the court ordered him to bear
the costs of the proceedings.

The second exception is where a person is successful on a point which is not raised below.
Meaning to say that, during the first hearing, one of the parties did not raise a point and due to
that the party lost in the hearing. However upon appeal, the losing party raised a new point and
subsequently, the appeal was allowed hence, the court may order for the cost to be borne by
the specific party which mentioned before. In Anna Jong Yu Hiong v Government Of
Sarawak [1972] 2 MLJ 244, the court found that counsel for the appellant did not bring notice to
the court below a particular case, which he used on appeal and ultimately succeeded, he had
therefore succeeded on a point not raised in the court below and since she was only partly
successful in this appeal, no costs were to be awarded. With regard to costs in the court below,
since the amount awarded on appeal exceeded the amount deposited by the respondent in
court, the appellants were to have the costs in the court below. Thus, the appellant has to bear
the costs of the appeal.

Besides that, the court may decide the cost to be borne by the winning party if the parties did
not submit relevant authorities for the case. In the case of Re Syed Ahmed Hood Alsagoff,
decd [1961] MLJ 150, the court allowed the appeal but no order as to costs was made for both
the appeal and the trial stages because the appellant had not referred to two "very relevant"
cases in the court below which would have won him the case.

Moving on, the winning party would be liable to pay for the cost of the losing party in the event
of a very unusual thing occurring. It is best illustrated in the case of Petroliam Nasional Bhd &
Anorv Cheah Kam Chiew [1987] 1 MLJ 25, the plaintiff is a political group’s member when he
brought an action against Defendant which rescued MBF on grounds of ultra vires. The
defendant requested the Parliament to amend the act in which it can allow the Defendant to
rescue the MBF without any act of ultra vires. The court dismissed the plaintiff’s action but held
that the defendant should bear the cost of both parties in the proceeding. The act of the
defendant in requesting the Parliament to amend the act to make their action not to be ultra
vires can be constituted as a special circumstance. It can be further illustrated in the case of
Mohd Salleh Samad v Zainodin Dongking [2002] 1 CLJ 139, where the appellant pleaded
guilty to negligence in the lower court when in actual fact he was not negligent in the road
accident.

In conclusion, the court has full discretion and power to determine by whom and to what
extent the costs are to be paid. That being said, the court has to exercise the discretion judicially
and on established principles. The principles of costs are provided under Order 59 of the Rule
of Court 2012, which generally states that the losing party must pay the costs for the winning
party and bear his own costs. However, upon several exceptions to the general rule, the court
may rule for the losing party to pay the costs for the winning party and bear his own costs. The
judgement can be made based on the above discussed case.