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; or  Cementing your victory

Interlocutory cost orders SCR Otter Gold NL v Barcon NT Pty Ltd & Ors (2000) 10 NTLR 189 LCR LCR 38.06

Definitions  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  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 another  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 Dyktnyski v BHP Titanium Minerals Pty Ltd (2004) 60 NSWLR 203

The guiding principles  An unfettered discretion which must be exercised judicially  To look to do substantial justice between the parties  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 costs 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]