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 and witness expenses.

After a judgment is delivered the Judge may:

  • order the unsuccessful party to pay the costs and/or disbursements of the successful party
  • 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)
  • 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 carefully record the costs and disbursements you incur in bringing or defending a proceeding, as you may have to show evidence of them if your proceeding is successful and they form part of an application for costs.

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 in depends on how complex the proceedings were: see rule 14.3 of the District Court Rules (external link)

The second part of the scale is a letter (A, B or C) that specifies how much time can be claimed for each task a lawyer does. Which category you fall in depends on how much time would have been reasonable: see rule 14.4 of the District 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 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 as long as the rest of the order is consistent with the order given in the judgment), the registrar will seal the order.

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

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 (including witness expenses).

Appealing a costs order

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

Security for costs

Security for costs is a payment of money made to the court to ensure that if a person is unsuccessful, they will be able to pay costs. The security for costs is kept in the court’s 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 5.48 of the District 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 put on hold (stayed) until security is paid. That means your proceeding cannot continue until security has been paid to the court.

An appellant in an appeal will usually be ordered to pay security for costs at the case management conference - see rule 18.13 of the District Court Rules (external link)

If the security for costs is not paid in time the respondent may ask the court to dismiss the appeal.

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