Vikram Misra, Barrister at Clarence Chambers, continues his series into practice and procedure. In this article, he discusses the cost of interlocutory application and when they are payable. Follow the series here.
Rule 42.7 of the UCPR[1] provides that unless the Court orders otherwise, the costs of any interlocutory application are not payable until the conclusion of the proceedings. There are some circumstances however, which make it appropriate to depart from the ordinary rule and permit an order permitting the payment of costs forthwith. These include inter alia:
i) where the interlocutory proceedings relate to matters distinct from the substantive issues in the proceedings;
ii) where the costs were incurred by the unreasonable conduct of the party against whom an order has been made;
iii) where the costs are significant and the time for payment may otherwise be long postponed; and
iv) where the interlocutory proceedings are an unnecessary and unwarranted application.
In Bangladesh Islamic Centre of NSW Inc v El Zamtar [2022] NSWSC 69 (‘El Zamtar’), the Defendant was successful in its interlocutory application to dismiss the proceedings as an abuse of process. Consequently, the Defendant sought orders as to costs in the nature of a gross sum costs order, payable forthwith. The Court held:
[73] The conduct of BIC in commencing these proceedings was patently unreasonable. The correspondence from Mr El Zamtar’s solicitors drawing to BIC’s attention the abuse of process and Mr El Zamtar’s intention to move the Court for orders for dismissal was timely, appropriate and courteous. The correspondence was rebuffed and the Court’s time has been taken up with this dispute.
An order was made that the Plaintiff pay the Defendant’s costs forthwith and in the gross sum of $15,000[2].
One may also consider seeking an order under r 12.10 of the UCPR[3] (as the Defendant did in El Zamtar) in the circumstances of the dismissal of proceedings, requiring payment of those costs before your opponent can commence any further proceedings against your client on the same or substantially the same cause of action, or for the same or substantially the same relief, as that on or for which the former proceedings were commenced.
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[1] See also rules 40.04 and 40.13 (taxation of costs) of the Federal Court Rules 2011 (Cth)
[2] I deal with gross sum costs orders in my previous article “Practice and Procedure Part 1: Gross Sum Costs Orders”, available at the following link https://legalwiseseminars.com.au/insights/practice-and-procedure-part-1-gross-sum-costs-orders/. See also the analysis in El Zamtar [2022] NSWSC 69 at [64] – [71].
[3] See also rule 26.15 of the Federal Court Rules 2011 (Cth).
Vikram Misra was admitted as a solicitor in 2012 and called to the NSW Bar in 2015. He maintains a broad commercial practice and is regularly briefed in matters relating to taxation law, property law, construction law and equity. Vikram has completed a Graduate Diploma in Taxation Law at the University of Sydney in 2015 and a Master of Laws majoring in construction law and contract law at the University of Melbourne in 2016. Vikram is also a contributing author to the Security of Payment (NSW) section of the looseleaf Commercial Arbitration Law & Practice Service for Thomson Reuters. You may connect with Vikram via email counsel@vikrammisra.com or LinkedIn
