Cost Law Commentary

Lessons for Litigators - traps in new Supreme Court Cost Rules Part 1

Statutory Rule 142 of 2012 introduced significant amendments to the Supreme Court Rules  re costs with effect from 1 April 2013.  There are a number of potential traps for litigators unfamiliar with the new rules.  In a series of posts, we will consider the impact of these amendments, and possible traps for litigators. There are three amendments which impact what is recoverable as a party's "costs of the proceedings".

Amendments to pleadings (R 63.17)

The automatic cost penalty imposed on a party who amended a pleading, embodied in the old R63.17, has been abolished.  A party wishing to recover costs the thrown away by or flowing from an amendment to a pleading will have to seek a specific order.  Otherwise, costs of an amendment simply form cost of the proceedings, and are therefore recovered by the party who gets a final cost orders in its favour.

Costs of interlocutory applications (R 63.20)

If no order is made on an application or the order is silent as to costs, then costs are costs of the proceedings.

It is not uncommon that an application goes “into the ether” and no final cost orders are made.  An example is an application for further and better discovery, where between the first return date, and a further hearing the parties agree on the further discovery to be provided.  No further order is made on the application, and no cost order is made.  It’s arguable that the party issuing the application has succeeded and should get its costs, if the other party agrees to give further discovery.  But if the other party is the one who wins the proceedings and gets its costs of the final proceedings, it will also get its costs of this discovery application by operation of the new R 63.20.

Reserved costs (r 63.22)

Previously, reserved costs were in the discretion of the Taxing Officer.  Under the new rule, they are the parties’ costs of the proceedings unless the Court otherwise orders.

It is therefore important at the conclusion of the matter, particularly if you are acting from losing party, to consider whether orders should be made in your client’s favour in respect of:

1.         Amendments;

2.         Interlocutory applications where a cost order was not made or the order was silent as to costs; and

3.         Reserved costs.