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Party Party Costs Assessment

A brief rundown and definition of some of the regular costs orders encountered.

The nomenclature of cost orders is perhaps not as precise as one would hope, and we sometimes encounter matters where the wording of the interlocutory or final cost order is unclear or is open to interpretation.

Below, I seek to address the common cost orders and terminology that we encounter and provide a brief definition of same (with great thanks and reference to both the excellent Law of Costs G E Dal Pont and Costs Guide NSW  – Thompson Reuters by Michelle Castle).

Pattison Hardman provides a brief rundown and definition of some of the regular costs orders encountered.

Types of Party Party Costs

Ordered Costs

Often previously referred to as party party costs or inter partes costs, the term ordered costs was introduced under the Legal profession Uniform Law to refer to those costs as costs payable under an order or rule of a court or tribunal. This is in contrast to the term solicitor client costs which are costs as payable by a client to a law practice.

The usual order as to costs

Such an order embodies the principle that generally, a successful party in litigation is entitled to an award of costs in its favour. Fairness dictates that the losing party generally bears the liability for the costs of the unsuccessful litigation. It represents costs on the standard or ordered basis as opposed to costs on an indemnity basis.

Costs in the Cause

Under this order, costs are awarded according to the final award of costs in the action. The order is encountered in relation to interlocutory proceedings. If the order is titled for example “plaintiff’s costs in the cause” then if the plaintiff is ultimately successful on the action, they will be able to recover the costs falling under this order. However, if the defendant was ultimately successful there will be no entitlement for them to recover their costs falling under this order.

Costs in any event

Again, this order is usually seen in interlocutory proceedings. It means that, irrespective of the ultimate determination of the matter, the party with the benefit to this particular cost order is able to recover same. It should be noted however that in most instances, costs awarded on interlocutory applications are not assessable or payable until the conclusion of the proceedings. There are exceptions to this rule, described below.

Costs reserved

Whilst historically there the meaning of costs reserved changed upon the jurisdiction, matters appear to be more settled now. In Victoria and New South Wales, the rules generally state that unless the court otherwise orders, costs that are reserved are to be paid and dealt with in the same way as the general costs in the proceedings.  The same approach occurs in the High Court, the ACT, the Federal Court and Courts of Queensland South Australia and Tasmania.  The outlier remains as Western Australia where Order 50 Rules of the Supreme Court 1971 WA states reserved costs shall not be allowed to a party without an order of the Court or a judge.

Silent as to costs

These orders are often encountered in interlocutory applications. In summary, if a party is successful on the motion where the order is silent as to costs and ultimately successful on the action, then these costs would be recoverable as costs in cause. On the flipside, should a party be unsuccessful on the motion where the order was silent as to costs, but ultimately successful in the action, in these costs would not be recoverable in the cause.

Costs of and incidental to the proceedings

There is no real difference, in my view, between an order for costs of the proceedings and costs of and incidental to the proceedings. The additional words of and incidental to do not widen the scope of the cost order and authorities stretching back to 1892 detail that an order for costs of the proceedings encapsulates costs of and incidental to same

Costs of the claim/counterclaim

A fairly self-explanatory order. Costs of the claim are restricted just to that and do not include costs in responding to the counterclaim. Likewise cost of the counterclaim can be recovered but these are quantified as only over and above the costs of the claim

Costs of the day

Costs of the day are not restricted to the actual appearance at the hearing on that day but also encapsulate the reasonable costs incurred in relation to that hearing. This work can include, for example, costs relating to the preparation for that hearing and general work surrounding same.

Costs thrown away

Costs thrown away orders are generally made resulting from the amendment of a pleading or for example the abandonment of a hearing date. In both instances these are backwards looking orders and the process in quantifying same necessitates the consideration and identification of work fairly and reasonably undertaken but now wasted. For example, this could be the preparation for a hearing and the arranging of witnesses/experts etc. and could stretch to Counsel’s cancellation fees (on which my colleague Paul has written about eloquently here) or costs incurred in meeting a head of claim that was ultimately abandoned by way of an amendment to a pleading. 

Costs assessable forthwith

Generally speaking, costs of interlocutory applications are not assessable until the finality of the proceedings, unless they are specifically ordered to be assessable forthwith. This position however is reversed in certain jurisdictions – for example the Commercial and Technology listed in the Equity Division of the Supreme Court in New South Wales where costs are assessable forthwith unless otherwise ordered. Care however should be taken as it is arguable that in order to secure the effectiveness of this costs order, the wording should be termed “costs assessable and payable forthwith” This was recently ventilated in Twigg v Twigg (No 2) [2019] NSWSC 1356 where the parties entered into consent orders that the costs be assessable forthwith (potentially inadvertently omitting the term payable) and it was found that the practice note did not automatically to extend to make such costs payable. As such, the order was not of any great utility to the recipient.

No order as to costs

A pretty self-explanatory order. On an interlocutory matter an order for no order for costs means that this cannot be swept up with the announcement costs of the proceedings of costs and cause Costs of appeal/costs here and below

Costs on Appeal

An order for costs in the appeal will not dislodge the cost order in the Court below whereas an order of costs of here and below gives the recipient the benefit of both.

Summary

As can be seen, the precise wording of the costs order either at the interlocutory or final stage of the proceedings can have a great impact on the costs ultimately recoverable/payable.  We at Pattison Hardman can provide advice and assistance to parties throughout the litigation process on matters such as this.

For full disclosure, the Charles Ackroyd and Paul Taylor are the editors of Costs Guide NSW – Thompson Reuters

Charles Ackroyd

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