Applications for Costs

Applications for Costs

Relevant Law and Principles 

The Court has inherent jurisdiction to make orders for costs. The Court has the power to award costs pursuant to s 37 of the Supreme Court Act 1935 (WA) and Order 66 Rule 1(1) of the Rules of the Supreme Court 1971 (WA). The provisions confer on the Court a discretion in relation to costs and incidental to all proceedings.

The general rule is that ‘costs follow the event’. That is, the successful party is entitled to have the discretion exercised in their favour. This general principle is only departed from when special circumstances warrant a diversion from this rule.[1] The Court’s discretion whether to make such an order is exercised judicially (i.e. by reference to the relevant factors applicable in a given case).[2]

What is sufficient to enliven the judicial discretion depends upon the circumstances. In J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch) (No. 2), [3] French J by reference to the observations of Woodward J in Fountain Selected Meats, [4] said:

‘It is sufficient, in my opinion, to enliven the discretion to award such costs that, for whatever reason, a party persists in what should on proper consideration be seen to be a hopeless case.’

Persisting in a hopeless case is one example of the type of conduct that is sufficient to lead a Court to the view that the party whose conduct gave rise to the costs should bear them in full.[5]

The judicial approach to the presumption (i.e. that an action has been commenced or continued because of a wilful disregard of the known facts of the established law) focuses upon what the party either knew, or ought reasonable to have known in the circumstances.[6]

Further, in the circumstances where the same lawyer represents joint defendants the usual order is that only one set of costs is allowed.[7]

Special circumstances that warrant the Court to exercise its discretion in awarding indemnity costs were discussed by Sheppard J in Colgate-Palmolive v Cussons[8] and relevantly included undue prolongation of a case on groundless contentions and an unreasonable refusal to accept an offer of compromise.

[1] Capolingua v Phylum Pty Ltd (1991) 5 WAR 137 (Ipp J); Ritter v Godfrey [1920] 2 KB 47, 52 – 53 (Lord Sterndale MR).

[2] Shorter v Hodges (1988) 14 NSWLR 698, 709.

[3] J-Corp Pty Ltd v Australian builders Labourers Federated Union of Workers (WA Branch) (No. 2) (1993) FCA 70.

[4] Fountain Selected Meats (Sales) Pty ltd v International Procedure Merchants Ltd (1988) 81 ALR 397, 400.

[5] Brookvista Pty Ltd v Meloni [2009] WASCA 180, [32].

[6] Trafalgar West Investment Pty Ltd (as trustee for the Trafalgar West Investment Trust v Superior Lawns Australia Pty Ltd) (No. 5) [2014] WASC 70, [12].

[7] GBT Corp Pty Ltd v Scott (1994) 116 FLR 266, 269.

[8] Colgate-Palmolive v Cussons (1993) 46 FCR 232, 232-234.

2020-07-23T04:36:01+00:00 July 27th, 2020|Uncategorized|0 Comments