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Abraham, Romaine --- "Costs Column: Types of Costs Orders: Part 2" [2023] PrecedentAULA 47; (2023) 177 Precedent 40

Types of costs orders:

Part 2

By Romaine Abraham

Part 1 of this column^[1] discussed three types of costs orders: costs reserved; costs in the cause; and no order as to costs. Part 2 of this column considers three other types of costs orders: an order for ‘costs thrown away’; an order ‘silent as to costs’; and the costs ‘of and incidental to’ the proceedings.

AN ORDER FOR ‘COSTS THROWN AWAY’

Generally, an order for ‘costs thrown away’ is made in circumstances where the legal costs incurred for work performed by one party is wasted due to the actions of another party. Typically, this occurs when an interlocutory or final hearing is adjourned at late notice on the successful application of one party, but where the other party was ready to proceed.^[2] An order for ‘costs thrown away’ may also be sought where a pleading is amended and the responsive work of formulating an argument or preparing a response must be duplicated.^[3] The final outcome of the proceeding is not a relevant factor in the determination of whether a ‘costs thrown away’ order should be made.^[4]

In certain circumstances, the liability for the incurrence of unnecessary legal costs can be extended to a legal practitioner. In accordance with s99 of the Civil Procedure Act 2005 (NSW), for example, a legal practitioner may be ordered to pay legal costs personally where costs have been rendered by the serious neglect, serious incompetence or serious misconduct of a legal practitioner, or in instances where the legal practitioner is responsible for legal costs that have been incurred improperly or without reasonable cause.^[5]

AN ORDER ‘SILENT AS TO COSTS’

Similarly to an order for ‘costs thrown away’, an order ‘silent as to costs’ is normally made at the conclusion of a discrete application or interlocutory step of a proceeding. Where a party makes a successful interlocutory application and the court makes such an order, the successful party is entitled to the costs of the application as costs in the cause.^[6] If a party opposes an interlocutory application where the order was ‘silent as to costs’, the unsuccessful party to that motion is not entitled to the costs of the application, if they are ultimately successful in the proceeding, as costs in the cause.^[7] However, if the motion was unopposed, and an order is made silent as to costs for that interlocutory step, the costs of all parties will be costs in the cause.^[8]

COSTS ‘OF AND INCIDENTAL TO’ THE PROCEEDINGS

An order for costs ‘of and incidental to’ the proceedings is usually the final costs order made in a proceeding. Case law indicates that an order for ‘costs of the proceeding’ and an order for ‘costs of and incidental to the proceeding’ has synonymous effect. In the Victorian Court of Appeal decision of Fifteenth Eestin Nominess Pty Ltd v Rosenberg (No 2)^[9] it was held that ‘[w]hen one party is ordered to pay the other party’s costs of a proceeding, that liability extends to the costs of such preparatory steps as are shown to be reasonably connected with the proceeding. That is so whether or not the words “and incidental to” are included in the order.’

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

^[1] See Precedent, No 175, March/April 2023.

^[2] GE Dal Pont, Law of Costs, 3rd Edition, LexisNexis Australia, 2013, [1.23].

^[3] Judicial Commission of New South Wales, Civil Trials Bench Book [2-0790]. See r42.6 of the Uniform Civil Procedure Rules 2005 (NSW) which requires a party that amends a pleading or summons without the leave of the court to ‘pay the costs of and occasioned by the amendment’, unless otherwise ordered by the court. Compare this with r63.17 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) which provides that the costs associated with amended pleadings, amended with or without the leave of the court, are the parties’ costs of the proceeding, unless otherwise ordered by the court. In the decision of Burke v Ash Sounds Pty Ltd (No 2) [2019] VSC 290, McDonald J held that r63.17 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) does not confer power on the court to make an order for costs thrown away occasioned by an amended pleading, but the court does have power under s24(1) of the Supreme Court Act 1986 (Vic) to make an award for such reason.

^[4] Dal Pont, above note 2.

^[5] See r63.23(1)(b) and (c) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic): r63.23(1) states: ‘Where a solicitor for a party, whether personally or through a servant or agent, has caused costs to be incurred improperly or without reasonable cause or to be wasted by a failure to act with reasonable competence and expedition, the Court may make an order that ... (b) the solicitor pay to the solicitor’s client all or any of the costs which the client has been ordered to pay to any party; (c) the solicitor pay all or any of the costs payable by any party other than the client.’ See also s24(1) of the Supreme Court Act 1986 (Vic) and s29 of the Civil Procedure Act 2010 (Vic).

^[6] Dal Pont, above note 2, [1.18]. For example, see r63.20 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) which states: ‘[w]here an interlocutory or other application is made in a proceeding and – (a) no order is made on the application; or (b) the order made is silent as to costs – the costs are the parties’ costs in the proceeding, unless the Court otherwise orders.’ This rule marks a change in the presumption that each party bore their own costs of an interlocutory application where the order was silent as to costs.

^[7] Ibid.

^[8] Ibid.

^[9] [2009] VSCA 178, [9].