In certain complex and important legal matters, special costs orders can be made to address the inadequacy of the costs allowable under the applicable costs determinations.

In this blog post, I discuss the legal principles surrounding special costs orders and the circumstances under which they may be granted, with reference to the case of BCBC Singapore Pte Ltd v PT Bayan Resources TBK (No 5) [2023] WASC 116.

Legal Principles

The power to make special costs orders is found in sub-section 141(3) of the Legal Profession Uniform Law Application Act 2022 (WA). This section replaced section 280(1) of the Legal Profession Act 2008 (WA) but is relevantly identical, meaning that authorities dealing with the previous section remain applicable.

As per the Court of Appeal decision in Sino Iron Pty Ltd v Mineralogy Pty Ltd (No 2) [2017] WASCA 76 (S), special costs orders may be made if a court or judicial officer is of the opinion that the amount of costs allowable in respect of a matter under a costs determination is inadequate because of the unusual difficulty, complexity, or importance of the matter. These orders are considered special and are only made if specified conditions are met.

Two Essential Components

To exercise the power to make a special costs order, the court must form an opinion that has two components:

The court must form the view that the maximum amount allowable under the relevant scale item is inadequate, in the sense that there is a fairly arguable case that the bill to be presented to the taxing officer may properly tax at an amount greater than the limit imposed by the relevant cost determination.
The court must also form the opinion that the inadequacy of the costs allowable under a costs determination arises because of the "unusual difficulty, complexity or importance of the matter."

Establishing a Fairly Arguable Case

A fairly arguable case will not be established merely because a party incurred greater costs than those allowable under the relevant determination.

However, if a party has applied significantly greater legal resources to each step in the litigation than those for which allowance is made under the relevant determinations, and this is viewed in the context of the difficulty, complexity, or importance of the matter, the conclusion that there is a fairly arguable case may be sustained.

The term "unusual" in this context qualifies only the "difficulty" of the matter, and not its "complexity" or "importance." It means unusual when compared to the usual run of civil cases determined in the court.

Case Example: BCBC Singapore Pte Ltd v PT Bayan Resources TBK (No 5) [2023] WASC 116

In this case, the court was satisfied that the Freezing Orders Proceedings were complex and important, justifying the special costs orders.

The nature and importance of the proceedings led the court to conclude that Bayan was justified in engaging counsel with greater experience and expertise in commercial litigation than in the usual run of civil cases, as well as solicitors who charged more than the scale rates.

Key Take-Aways

Special costs orders are made in cases of unusual difficulty, complexity, or importance when the maximum amount allowable under the relevant scale item is inadequate.
These orders are not made lightly, and the court must be satisfied that there is a fairly arguable case that the amount of costs allowable is inadequate because of the specific nature of the matter.