Abraham, Romaine --- "Costs column: Types of costs orders, Pt 1" [2023] PrecedentAULA 22; (2023) 175 Precedent 43

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TYPES OF COSTS ORDERS

PART 1

By Romaine Abraham

The general rule in most civil litigation conducted in Australia is that costs ‘follow the event’, and the unsuccessful party will (partially) indemnify the successful party of their legal costs.^[1] Traditionally, courts are vested with unfettered discretion with respect to the award of costs of a proceeding.^[2] For example, s24 of the Supreme Court Act 1986 (Vic) stipulates that ‘the costs of and incidental to all matters in the Court ... is in the discretion of the Court and the Court has full power to determine by whom and to what extent the costs are to be paid.’^[3] Within this discretion, courts accordingly have the ability to make different types of orders as to costs.^[4] Moreover, the court is empowered to make different types of costs orders at interlocutory stages throughout a matter.^[5] This column discusses three types of costs orders: costs reserved; costs in the cause; and no order as to costs.

COSTS RESERVED

An order that costs be reserved is an order that can be made at an interlocutory step or in an application made within a proceeding. Costs are generally reserved in circumstances where overall costs will be determined by the outcome of the matter and ordered at the conclusion of proceedings.

The application and meaning of a costs reserved order varies depending on the jurisdiction and circumstance.^[6] Historically, no party was required to pay or able to receive the costs associated with a stage of the proceeding that was subject to a costs reserved order without a further order of the court that explicitly dealt with those costs.^[7] For example, O 66 r 50 of the Rules of the Supreme Court 1971 (WA) directs that reserved costs ‘shall not be allowed to a party without an order of the Court or a judge.’^[8] However, the historical position was reversed in NSW by reg 42.7(1) of the Uniform Civil Procedure Rules 2005 (NSW) which states that reserved costs ‘are to be paid and otherwise dealt with in the same way as the general costs of the proceedings’. Similarly, in Victoria, reserved costs are ‘the parties’ costs in the proceeding, unless the Court otherwise orders’.^[9]

COSTS IN THE CAUSE

‘Costs in the cause’ is a type of costs order that is made at an interlocutory step or at the conclusion of a discrete application. Where an order is made that costs be ‘in the cause’, the costs of the interlocutory step or discrete application to which the order applies will be awarded in accordance with the final order as to costs.^[10] A party who is ultimately successful and obtains a costs order in their favour is entitled to their costs of the interlocutory proceedings that have been determined to be ‘costs in the cause’ as against the unsuccessful party.^[11] An order that interlocutory costs be ‘costs in the cause’ attributed to a specifically named party means that the named party is entitled to the costs of interlocutory proceedings if the named party is successful, but does not have to pay the successful party’s costs of the interlocutory proceeding if they ultimately lose.^[12]

NO ORDER AS TO COSTS

Where the court makes an order that there be ‘no order as to costs’, each party to the litigation must bear their own costs of the proceeding, or if made at an interlocutory stage, of that step of the litigation.^[13] Where ‘no order as to costs’ is made at an interlocutory stage, and final costs orders are subsequently made entitling a party to costs of the proceeding, the successful party with the benefit of the later costs order will be deprived of their costs for that interlocutory stage.

OTHER TYPES OF COSTS

An order for payment of costs thrown away, an order ‘silent as to costs’ and costs ‘of and incidental to’ the proceedings will all be discussed in part 2 of this column.

Romaine Abraham is a costs lawyer based in Melbourne, Victoria.

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^[1] Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11, [67].

^[2] Saafin Constructions Pty Ltd (in liq) v MAG Financial and Investment Ventures Pty Ltd (Costs and Orders) [2021] VSC 702, [27].

^[3] See also s43 of the Federal Court of Australia Act 1976 (Cth). Section 43(2) states: ‘[e]xcept as provided by any other Act, the award of costs is in the discretion of the Court or Judge’.

^[4] By way of example, s65C(2)(a) of the Civil Procedure Act 2010 (Vic) enables the Court to ‘make different awards of costs in relation to different parts of a proceeding or up to or from a specified stage of the proceeding’.

^[5] In NSW, s98(3) of the Civil Procedure Act 2005 (NSW) states ‘[a]n order as to costs may be made by the court at any stage of the proceedings or after the conclusion of the proceedings’.

^[6] GE Dal Pont, Law of Costs, 3rd Edition, LexisNexis Australia, 2013, [1.17].

^[7] Ibid.

^[8] See also r 63.20(1) of the Supreme Court Rules 1987 (NT) which states ‘[w]here, by order of the Court, the costs of an interlocutory or other application or of a step in a proceeding are reserved, the Court may direct by and to whom those costs are to be paid.’ Rule 63.20(2) of the Supreme Court Rules 1987 (NT) states that ‘a party may, within 21 days after the conclusion of the proceeding, apply to the Court for a direction as to the payment of costs reserved.’

^[9] Regulation 63.22 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic). See also, r 40.03 of the Federal Court Rules 2011 (Cth), reg 51.01 of the High Court Rules 2004 (Cth), r 1728 of the Court Procedure Rules 2006 (ACT), r 698 of the Uniform Civil Procedure Rules 1999 (Qld), r 194.4(6) of the Uniform Civil Rules 2020 (SA), r 67 of the Supreme Court Rules 2000 (Tas), which all contain similar provisions.

^[10] Dal Pont, above note 6, [1.15].

^[11] Ibid.

^[12] Ibid.

^[13] Ibid, [1.24].