Costs & disbursements

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Awarding costs and disbursements

In this section, ‘costs’ refers to the expense of hiring a lawyer. ‘Disbursements’ refers to the expenses you incur in taking the proceeding (other than the lawyer’s fees), for example, the court filing fees.

After a judgment is delivered the judge may:

  1. order the unsuccessful party to pay the costs and/or disbursements of the successful party
  2. order that costs lie where they fall, so no party is ordered to pay for the costs of the other (that is, the parties pay their own costs)
  3. reserve an order for costs until the final determination is made. This can happen when a judgment on an interlocutory application has been delivered, but there has not yet been a judgment on the final application.

You should make yourself familiar with the costs and disbursements you may incur in bringing or defending a proceeding, as you will need to pay them if your proceeding is unsuccessful.

Costs

In most cases, when a judge orders the unsuccessful party to pay costs, the judge will allocate a scale for the costs to be calculated. The cost scales are listed in:

The first part of the scale is a number category (1, 2 or 3). The number represents the amount of money that can be claimed each day in legal fees. Which category you fall within depends on how complex the proceedings were: see rule 14.3 of the High Court Rules (external link)

The second part of the scale is a letter (A, B or C) which specifies how much time can be claimed for each task a lawyer undertakes. Which category you fall within depends on how much time would have been reasonable: see rule 14.5 of the High Court Rules (external link)

A judge will order the unsuccessful party to pay costs on a solicitor-client basis if the parties have entered into a contract with a clause stating that, in the event of litigation, the unsuccessful party will pay the successful party’s costs on that basis.

A judge may rule on the amount of money the unsuccessful party is to pay the successful party for costs.

Disbursements

In most cases, when a judge makes an order for disbursements they will order that the disbursements be fixed by the registrar. This means that when an order for sealing (see rule 7.47 of the High Court Rules) is filed with the registrar, the registrar will review the disbursements claimed by the successful party. If the registrar is satisfied with the disbursements claimed (and provided the rest of the order is consistent with the order given in the judgment), they will seal the order.

Read rule 7.47 of the High Court Rules (external link)

The alternative is that a judge, when making an order for disbursements, will fix the amount of disbursements in the judgment.

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What can you claim?

If you are the successful party, you cannot claim costs such as loss of income due to time taken off work to prepare for the proceeding. However, you can claim disbursements.

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Appealing a costs order

If you want to appeal a costs order you must lodge appeal papers with the Court of Appeal within 20 working days of the date that the judgment that gives the costs order is issued.

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Security for costs

Security for costs is a payment of money to ensure that if a person is unsuccessful, they will be able to pay costs. The security for costs is kept in a trust account until the final outcome of the proceeding.

A plaintiff or applicant in a proceeding may be ordered to pay security for costs if the defendant or respondent applies for that order under rule 5.45 of the High Court Rules (external link)

When security for costs is ordered, the person must pay the costs to the court.

If the judge orders security for costs, the judge may also order that the proceedings are stayed until security is paid. That means your proceeding cannot continue until security has been paid into court.

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