By way of recap, chapter 17A Uniform Civil Procedure Rules (UCPR) outlines the rules regarding costs in Queensland. It is common ground that costs are discretionary and “follow the event” unless the Court orders otherwise[1] and are to be assessed unless otherwise ordered.[2]
Costs may be awarded by a court at any stage of a proceeding or after the proceeding ends, and must be decided in accordance with chapter 17A of the UCPR[3].
Let us now look at some terms that are typically encountered in orders for costs[4]:
All costs means standard costs (otherwise known as party and party costs);
Costs in any event means that the party in whose favour such an order is granted, receives its costs irrespective of the outcome of the proceedings overall;
Costs in the cause means that the costs will be disposed of with the ultimate orders as to costs of the trial;
Costs of the proceeding or costs of the action includes all the costs associated with preparing the proceeding including accounts and enquiries directed to be taken, the costs of interrogatories, notices to produce, notices to admit and drawing a brief full council;
Costs of appeal means the costs which are either directly related to the appeal or have a connection that makes them reasonably incidental. These include such things as obtaining reasons for judgement and reading the appeal record;
Costs of the claim, encountered where there is also a counterclaim, means the costs of the proceeding as though there were no counterclaim;
Costs of counterclaim means only the additional costs incurred as a result of the counterclaim;
Costs thrown away is an order which is commonly made in circumstances where the application or trial has been adjourned on the day of the hearing, due to the actions of one party. Generally, the costs that will be recoverable by such an order include a fee for Counsel, the costs of the solicitor or clerk instructing counsel, any witnesses expenses incurred for being available on the day in question, and any other expense which are incurred and which will have to be incurred again as a result of the adjournment.
No order as to costs means that each party must bear its own costs.
Reserved costs by rule 698, if the court reserved costs of an application in a proceeding, the costs reserved follow the event, unless the court orders otherwise.
With costs means such costs as the rules allow. This is in essence a default position which requires the parties to consider the particulars of the matter in question. Typically, it means that costs follow the event and are to be assessed.
Costs on an indemnity basis means all costs reasonably incurred and of a reasonable amount having regard to r.703(3) being the scale of fees for the court, any costs agreement between the party to whom the costs are payable and the party’s solicitor and any charges ordinarily payable by a client to a solicitor for the work undertaken. This is the old “solicitor and client costs” basis.
Orders as to amount to be paid
The general rule as detailed above, is that costs are to be assessed unless ordered otherwise. In this respect, the court may order a party to pay:
as specified part or percentage of assessed costs; or
assessed costs to or from a specified stage of the proceedings; or
an amount for costs fixed by the court; or
an amount for costs to be decided in the way the court directs.[5]
A party seeking to fix costs should provide the court with either a cost assessors estimate or on affidavit evidence, from an experienced senior solicitor, the costs incurred up to the date of the affidavit and the likely amount recoverable on assessment.
The court will generally decline to fix costs where it is not confident that the costs can be fixed, or where it considers that it is inappropriate to depart from the general rule that costs be assessed.
Now that we have a better understanding of the prospective costs orders a court can make, I will briefly address standard costs.
Standard Costs
Rule 702 provides that unless the rules or an order of the court provides otherwise, the costs assessor must assess costs on the standard basis. In so doing, the costs assessor must allow all costs necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being assessed.
Accordingly, the first consideration is whether the costs were “necessary or proper for the attainment of justice, or for maintaining or for defending the right of any party” and to the extent that costs do not satisfy this criteria then it is arguable that they should be disallowed.[6]
There is of course a distinction between the words “necessary” and “proper”, such distinction which is not interchangeable and which is the subject of considerable case law.[7]
In the recent decision of Hennessey Glass and Aluminum Pty Ltd v Watpac Australia Pty Ltd [2007] QDC 057 at 23 – 9, McGill SC DCJ held that:
“… Costs are ‘necessary’ if the litigation could not have been carried on reasonably without them. Costs are ‘proper’ if it was reasonable for a client with a competent solicitor to have incurred those costs in carrying on the litigation…”
Necessary and proper do not extend to recovery of costs where the party in question has sought to achieve the ‘gold standard’. In this respect, the decision of Wide Bay Conservation Council Inc v Burnett Water Pty Ltd (No 9) [2011] FCA 661 is of some interest as to the recoverability of costs where extensive evidence was lead but where no complex points of law were heard. Although this is a Federal Court decision, it is never the less instructive of the inherent inefficiencies of time based costing and promotes the fee on brief philosophy to litigation.
Nevertheless, it is worthwhile noting r. 721, which not only identifies the discretion of a costs assessor but, also provides that in assessing costs, a costs assessor must consider the following:
any other fees and allowances payable to the solicitor or counsel for other items in the same proceeding;
the nature and importance of the proceeding;
the amount involved;
the principle involved;
the interests of the parties;
the person who is paying the costs, or the fund or estate out of which the costs up to be paid;
the general conduct and cost of the proceedings;
any other relevant circumstances.
The next article on costs will consider indemnity costs.
This article should not be taken as legal advice. If you have a matter that deals with the subject matter of this article then you should seek independent legal advice regarding the particular circumstances of your case.
Liability limited by a Scheme approved under professional standards legislation.
[1] See. r.681 [2] See r.686 [3] See r.682 [4] This article draws heavily on the notations in the UCPR in terms of the specific orders detailed because there are set orders and their meaning is so well understood. See r.682.10 “various costs orders defined” for a more comprehensive analysis of the phrases and the relevant cases that correspond with each of the respective orders. The commentary to r.682 also provides a summary of additional orders which are not included in this article. [5] See r.687(2) [6] Re Malleson Stewart Stawell & Nankivell [1931] VLR 127 at 131 [7] W & A Gilbey Ltd v Continental Liqueurs Pty Ltd [1964] NSWLR 527 at 533
