Cost orders in litigation the battle after the war

1. Cost orders in litigationthe battle after the war Miles Crawley 20 March 2014

2. Purpose 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

3. 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

4. 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 63.20 • No order as to costs • Each party bears their own costs

5. 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

6. 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

7. 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

8. 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……..

9. 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

10. Calderbankoffers • 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

11. 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

12. Pre-litigation procedures; mediation • Practice Direction 6 of 2009 • Spadaccini v Grice [2012] NTSC 41

13. 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]

14. 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 HavivHoldings Pty Ltd & Anor • (2010) 182 FCR 84

15. 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)

16. 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]