Cost Orders in Litigation - William Forster Chambers

Miles Crawley
20 March 2014
In litigation, ultimate success or failure may well
be measured by the order made as to costs
So we need to consider:
Attempting to turn a loss into at least a draw;
 Cementing your victory
Interlocutory cost orders
SCR 63.18
Otter Gold NL v Barcon NT Pty Ltd & Ors (2000)
10 NTLR 189
LCR 38.02
LCR 38.06
 Costs in the cause
Costs recoverable by party ultimately successful
 Party’s costs in the cause
Costs only recoverable if that party ultimately is successful
 Costs in any event
Only recoverable when matter concluded
 Costs reserved
SCR 63.20
 No order as to costs
Each party bears their own costs
 Costs of today
Includes costs reasonably related to the day
 Costs thrown away
Costs incurred but wasted
 Certified fit for counsel
Recover at counsel rates + solicitor
 Taxed on an indemnity basis
SCR 63.25: all costs unless unreasonably incurred
 Taxed on the standard basis
SCR 63.26: all costs reasonably incurred
 Party and Party costs
All necessary or proper costs
 Solicitor and client costs
All costs not resulting from fussy or pedantic clients
or lawyers
 Bullock order
Unsuccessful party recover ordered costs from
 Sanderson order
Bullock order without the middle man
 Calderbank offer
Non-filed offer under Calderbank principles
Costs are an indemnity, not a punishment
 Must be actually incurred
 Representative parties
 Identifying the real party
Johnson v Santa Teresa Housing Association 83
NTR 14 at 17-20
Dyktnyski v BHP Titanium Minerals Pty Ltd (2004)
60 NSWLR 203
The guiding principles
 An unfettered discretion which must be exercised
 To look to do substantial justice between the
 Generally costs will follow the event and be
recoverable on the standard or party and party
basis, but……..
Depriving a successful party of costs
A court is entitled to deny a successful party some or
all of its costs where there is evidence that the party:
 brought about the litigation;
 has done something connected with the institution
or the conduct of the suit calculated to occasion
unnecessary litigation and expense; or
 has done some wrongful act in the course of the
transaction of which the other party complains
Ritter v Godfrey [1920] 2 KB 47
Calderbank offers
 it need either to refer to being “without
prejudice except as to costs” or make specific
reference to being made “pursuant to the
principles in Calderbank v Calderbank”
 The offer must contain a genuine compromise
 An offer expressed to be inclusive of costs
generally is not suited to being an effective
Calderbank offer, as it usually does not allow
court to decide whether a verdict is better or
worse than the offer made
 Failure to beat may lead to adverse cost orders
on an indemnity basis
Filed offers
SCR 26
By P if not accepted and no worse a result – indemnity
By D if not accepted and P does worse – P gets costs on
standard basis to date of offer and D gets costs on
standard basis thereafter
LCR 20
By P if not accepted and achieves a better result –
indemnity costs
By D if not accepted and the P does no better – P gets
costs on standard basis to date of offer; thereafter D gets
costs on an indemnity basis
Pre-litigation procedures; mediation
Practice Direction 6 of 2009
Spadaccini v Grice [2012] NTSC 41
Where a party succeeds on some issues and
not others
Where there are multiple issues, it may be appropriate for
a court to assess the costs on each issue or make a
reduction of the costs which the successful party obtains
because of that party’s losses on separate issues
Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (no 3) (1998) 30 ACSR 20
Cretazzo v Lombardi (1975) 13 SASR 4, 16
Elite Protective Personnel Pty Ltd & Anor v Salmon (no 2) [2007] NSWCA
373, [6]
Where there are multiple parties with varying
degrees of success
 Shotgun litigation compared with finger pointing
 Bullock and Sanderson orders
 Aggregation of parties
Howard’s Storage World Pty Ltd & Ors v Haviv Holdings Pty Ltd & Anor
(2010) 182 FCR 84
Lump sum costs
Whether in all the circumstances, it is appropriate to
do so
 where the delay, inconvenience and cost of the taxation process
would be considerable
Idoport Pty Ltd v National Australia Bank Ltd [2005] NSWSC 1273 at [9]
 to avoid the expense, delay and aggravation involved in protracted
litigation arising out of taxation
Beach Petroleum NL v Johnson (No.2) (1995) 57 FCR 119
 where the successful party will be put to significant cost on a
taxation which will not be recouped
Smart Co Pty Ltd v Clipsal Australia Pty Ltd (No.7) [2011] FCA 1359
 where the party ordered to pay costs is unlikely to be able to meet
the liability from the assessment process
Leary v Leary [1987] 1 WR 72; Beach Petroleum NL v Johnson (No.2)
Whether on the material available, a fair
assessment can be made
 where the court is confident it can adopt an
approach to estimating costs which is fair, logical
and reasonable
Beach at 123; Smoothpool v Pickering [2001] SASC 131
 The fairness parameter includes the court having
sufficient confidence in arriving at an appropriate
sum on the materials available
Harrison v Schipp (2002) 54 NSWLR 738 at [22] per Giles JA; Sony
Entertainment v Smith (2005) 215 ALR 788
 The onus is on the party seeking a lump sum award
to establish these matters
Seven Network Limited v News Ltd [2007] FCA 2059 at [29]

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