CIVIL PROCEDURE – COSTS – whether costs should be assessed at
the rate applicable to an interstate lawyer or at the local
rate on the District
Court scale
Source
Original judgment source is linked above.
Catchwords
CIVIL PROCEDURE – COSTS – whether costs should be assessed atthe rate applicable to an interstate lawyer or at the localrate on the DistrictCourt scaleCivil Proceedings Act 2011 (Qld) s 15LegalProfession Act 2007 (Qld) s 44Supreme Court of Queensland Act 1991(Qld) s 85, sch 1 cl 21Uniform Civil Procedure Amendment Rule (No 4)2007 (Qld)Uniform Civil Procedure Rules 1999 (Qld) rr 678, 679,680, 682, 687, 691, 724Athens v Randwick City Council [2005] NSWCA317(2005) 64 NSWLR 58, appliedAustralian Energy Ltd v Lennard Oil NL(No 2) [1988] 2 Qd R 230, appliedCachia v Haynes [1994] HCA 14(1994) 179 CLR 403, appliedCannon Street Pty Limited v Karedis [2006]QCA 541
[2007] 1 Qd R 505, distinguished
Jason Hall v Val Eco Homes Pty
Ltd (in liq) [2021] QCA 236, applied
Maggbury Pty Ltd v Hafele
Australia Pty Ltd [2001] QSC 78
[2002] 1 Qd R 183, distinguished
Mees v Roads Corporation [2003] FCA 410, cited
Regis Aged Care
Pty Ltd v Secretary Department of Health (No 2) [2018] FCA 454,
cited
Theden v Nominal Defendant [2007] QSC 316, considered
Tulloch Brae Pty Ltd v Environmental Protection Equipment Pty Ltd
CIVIL PROCEDURE - COSTS - whether costs should be assessed at the rate applicable to an interstate lawyer or at the local rate on the District Court scale
Tulloch Brae Pty Ltd v Environmental Protection Equipment Pty Ltd (No2)[2021] QSC 255, considered
[18]
Enso Legal for the plaintiff and defendant by counterclaim
[19]
[1] The defendant succeeded in an action against the plaintiff. On 13 October 2021, Dalton J ordered that the plaintiff pay the defendant's costs on the District Court scale to be assessed. On 4 November 2022, the defendant served a cost statement claiming $1,232,085.22 total costs, of which $857,324.12 were professional costs claimed by the defendant's New South Wales lawyers.
[2] The plaintiff took objection to the lawyers charging New South Wales rates rather than on the scale of costs in Schedule 1 to the Uniform Civil Procedure Rules 1999 (Qld) (UCPR).
[3] On 20 March 2025, a costs assessor referred the following question to the court pursuant to r 717 of the UCPR:
[20]
"On a proper assessment of the costs order [made by Dalton J] how should the defendant's costs be assessed?"
[21]
[4] For the reasons which follow, I have determined that the costs should be assessed on the basis of schedule 1 to the UCPR.
[22]
[5] On 13 March 2017, the plaintiff commenced proceedings against the defendant in the District Court of Queensland. On 24 April 2017, the defendant filed a defence and counter claim. Plastiras Lawyers acted for the defendant as Town Agents for Yates Beaggi Lawyers (YBL), a firm based in Sydney New South Wales. Plastiras continued to act as Town Agent until 26 March 2020. On 1 October 2020, Boss Lawyers then acted as Town Agent for YBL.
[6] The following is not in dispute:
[23]
(a) At all material times YBL remained on the record for the defendant until 23 April 2024;
(b) At all material times YBL was a law practice located in Sydney, New South Wales;
(c) The individual practitioners having conduct of the matter on behalf of the defendant were Australian legal practitioners holding practising certificates issued in New South Wales; and
(d) As Australian legal practitioners, they are entitled to practice in Queensland by reason of s 44 of the Legal Profession Act2007 (Qld).
[24]
[7] The matter was tried in the Supreme Court before Dalton J in May 2021. Her Honour gave judgment for the defendant on 2 September 2021.[1] On 13 October 2021, Dalton J ordered:
[25]
"Order that the plaintiff pay the defendant's costs of the claim and of the defendant's counter claim against the plaintiff on the District Court scale on a standard basis to be assessed or agreed."
[26]
[8] On 4 November 2022, the defendant served a costs statement on the plaintiff. The total costs claimed by the defendant are $1,232,085.22 of which $857,324.12 are the professional costs claimed in respect of the work performed by YBL. The claim by the defendant in respect of his liability to YBL is calculated on the basis of time costing rates applicable to work done by New South Wales solicitors.
[9] On 9 January 2023, the plaintiff served its notice of objections to the cost statement. By its notice of objections, the plaintiff took objection to the defendant seeking to claim his indemnity by reference to fees ordinarily charged for such work in New South Wales rather than the scale of costs contained in Schedule 1 of the UCPR.
[10] On 11 June 2024, Mr Graham Robinson was appointed as Cost Assessor. On 20 March 2025, the Cost Assessor filed his referral in the Supreme Court.
[11] As can be seen, the issue between the parties is that the plaintiff claims that the fees charged by YBL should be on the scale of costs contained in Schedule 1 of the UCPR. The defendant on the other hand submits that YBL in entitled to charge its costs at rates applicable to work done by New South Wales solicitors.
[27]
[12] The plaintiff submits that the order of Dalton J is clear. Her order was that the plaintiff pay the defendant's costs on the District Court scale. It is submitted that rr 680 and 687 UCPR override r 724 UCPR. It is submitted that the professional fees of YBL are to be assessed according to the District Court scale. This interpretation is consistent with r 691 UCPR and avoids the absurdity that would arise if a party were to engage solicitors in another jurisdiction to act on their behalf who might charge considerably more for the work than a party engaging a Queensland solicitor.
[13] It is further submitted there is a clear ambiguity between r 724 and r 691 UCPR. It is submitted that r 5 UCPR is relevant to the interpretation. It is not disputed that YBL is entitled to charge the defendant in terms of their retainer, but the costs ought to be recovered should be in accordance with the order.
[14] In New South Wales there is no applicable scale by reference to which party and party costs are assessed. Party and party costs in New South Wales are, in a sense, unregulated and more closely equate to indemnity costs in Queensland. It would be absurd for a party instructing a lawyer outside of Queensland to be entitled to greater indemnity than for a litigant who instructs lawyer practicing in Queensland. The UCPR should be construed so as to avoid an absurd result. Ultimately, the plaintiff contends that on a proper construction of the cost order, the defendant's costs (including the professional fees of the New South Wales solicitors) should be assessed in accordance with the scale of costs in force when the costs were incurred in Queensland as provided for in the UCPR.
[28]
[15] The defendant submits that the order made by Dalton J is consistent with the operation of r 691(1) UCPR. The defendant notes the plaintiff's contention that r 724(4) should be read subject to r 691(1) UCPR, such that the latter imposes a maximum limit on costs that can be assessed in favour of the defendant. It is submitted this is not correct.
[16] The defendant submits that Chapter 17A of the UCPR governs the ordering and assessment of costs. The chapter was incorporated into the UCPR by amendments made in 2007 with effect from 10 December 2007.[2]
[17] Part 2 of Chapter 17A relates to "costs of a proceeding" whereas Part 3 relates to "assessment of costs" i.e. party/party costs. It is submitted there is a clear structure as to costs. Part 2 concerns the basis on which the power is exercised and Part 3 concerns how costs are to be assessed once the power is exercised. It is submitted the provisions clearly complement each other and work together, not in opposition to each other.
[18] It is submitted that the order by Dalton J was that costs were to be on the standard basis as agreed or assessed. It contemplated that costs would be assessed in accordance with Chapter 17A.
[19] It is submitted that Chapter 17A was incorporated into the UCPR at a time when the Legal Profession Act2007 (Qld) was passed to facilitate the national practice of law by ensuring the Australian legal practitioners can engage in legal practice in Queensland. The new reality after that time was that non-Queensland lawyers were entitled to practice in Queensland.
[29]
"The defendant's costs should be assessed in compliance with the provisions of chapter 17A Part 3 of the UCPR and to the extent such costs relate to a lawyer practising in New South Wales, the assessor must, pursuant to UCPR 724(4) assess such costs having regard to the rate of costs commonly charged in that State."
"A court may award costs in all proceedings unless otherwise provided."
[32]
[27] There is nothing in the Civil Proceedings Act which specifies the basis on which costs may be awarded or once awarded, how they are to be assessed.
[33]
[28] It is s 85 of the Supreme Court of Queensland Act 1991 (Qld) which provides that the Governor in Council has the rule making power. Clause 21 of schedule 1 provides that the rules may provide as to costs in civil proceedings.
[34]
(1) Costs of a proceeding, including an application in a proceeding, are in the discretion of the court but follow the event, unless the court orders otherwise.
[35]
(2) Subrule (1) applies unless these rules provide otherwise."
[36]
"687 Assessed costs to be paid unless court orders otherwise
[37]
(1) If, under these rules or an order of the court, a party is entitled to costs, the costs are to be assessed costs.
[38]
(2) However, instead of assessed costs, the court may order a party to pay to another party -
[39]
(a) a specified part or percentage of assessed costs; or
[40]
(b) assessed costs to or from a specified stage of the proceeding; or
[41]
(d) an amount for costs to be decided in the way the court directs.
[42]
(1) For assessing costs on the standard basis, an Australian lawyer is entitled to charge and be allowed the costs under the scales of costs for work done for or in a proceeding in the court.
[43]
(a) for the Supreme Court and District Court - schedule 1; or
(3) For an assessment for Magistrates Courts on the standard basis, the scale in schedule 2 appropriate for the amount the plaintiff recovers applies.
[46]
(4) For an assessment for Magistrates Courts on the indemnity basis, the scale in schedule 2 appropriate for the amount the plaintiff claims applies.
[47]
(5) If the nature and importance, or the difficulty or urgency, of a proceeding and the justice of the case justify it, the court may allow an increase of not more than 30% of the Australian lawyer's costs allowable on an assessment under the relevant scale of costs.
[48]
(6) A costs assessor has the same authority as the court under subrule (5).
[49]
(7) The costs under the scales of costs for work done are inclusive of any GST payable in relation to the work.
[50]
(8) Unless the court otherwise orders, the costs are in accordance with the scale of costs in force when the costs were incurred."
[51]
[32] Part 3 of the UCPR deals with the assessment of costs. This provides for the provision of a cost statement under r 706; objections to cost statements under r 706; the appointment of cost assessors and the procedure on assessments.
[33] Rule 724 UCPR provides:
[52]
"724Professional charges and disbursements
[53]
(1) If a costs statement includes a charge for work done by a lawyer practising in Queensland and acting as agent for a party's lawyer, the charge must be shown as a professional charge, not as a disbursement.
[54]
(2) A costs assessor may assess and allow a charge mentioned in subrule (1) even if it is not paid before the assessment.
[55]
(3) If a costs statement includes a charge for work done by a lawyer practising outside Queensland, the charge may be shown as a disbursement or as a professional charge.
[56]
(4) If a costs assessor allows a charge mentioned in subrule (3) when assessing costs, the amount the costs assessor allows must, so far as practicable, be an amount appropriate in the place where the lawyer practises."
[57]
[34] The defendant's submissions that r 724 of the UCPR was inserted to ensure a consistent approach nationally on, inter alia, the question of costs, appears correct.[4]
[35] However, this case comes down to an interpretation of the order made by Dalton J.
[36] It has been said that in interpreting a court order, it must stand or fall on its own terms.[5] However, on occasions a court must have regard to extrinsic evidence to interpret the order, such as reasons for judgment[6]
[37] In the costs decision in Tulloch Brae Pty Ltd v Environmental Protection equipment Pty Ltd (No2)[7], Dalton J decided that indemnity costs were not appropriate despite submissions by the defendants that they should be awarded. Her Honour also specifically awarded costs on the District Court scale. It can readily be concluded this was because the amounts were within the jurisdiction of the District Court.
[38] In this particular case, the determination to award costs on the District Court scale was an order not only as to costs but also an order as to the way in which costs were to be assessed. In this particular case, her Honour's order made it clear that the defendant's costs were to be on the District Court scale (in schedule 1) on the standard basis to be assessed.
[39] The Court made a specific order as to the way in which costs were to be assessed under r 681(1) UCPR or alternatively under r 687(2)(d) UCPR.
[40] The plaintiff's submission is correct that her Honour's order overrode any of the provisions of r 724 UCPR because her Honour made an order governing the way the costs were to be assessed. The fees of YBL are part of the defendant's costs.
[41] Such an approach is also consistent with the provisions of r 691 UCPR where the assessment of costs by an Australian lawyer is referred to as the scale of costs for the District Court. Indeed this approach is consistent with the approach taken by Jones J in Theden v Nominal Defendant.[8]
[42] There is no doubt that YBL are entitled to charge their client in accordance with the terms of their retainer, but what is in issue here is the costs payable by the losing party under a court order. It is to be noted that an award of costs is not intended to provide comprehensive compensation for any loss suffered by a litigant.
[58]
[45] For the reasons given, I answer the question asked by the costs assessor as follows:
[59]
"On a proper construction of the costs order made by Dalton J on 13 October 2021 the defendant's costs (including the professional fees of the New South Wales solicitors) should be assessed in accordance with the Queensland District Court scale of costs in force when the costs were incurred."
[60]
[46] I will hear from the parties on the question of costs.
[20] It is submitted that r 724(4) UCPR provided an important change which permitted that lawyers practicing outside of Queensland could recover their costs at the amount applicable in the place where the lawyer practices. The fact is, YBL are lawyers practising in New South Wales and their rates had been set according to New South Wales market practices. Their costs have been included in the statement of costs as a disbursement.
[21] It is submitted it is mandatory for Mr Robinson under r 724(4) UCPR to assess the costs at the rate appropriate to New South Wales.
[22] It is submitted that it is not absurd to construe r 691 UCPR as subject to r 724(4) UCPR. For example, another state may have lower rates than Queensland and there might be a windfall for a lawyer practising outside of Queensland.
[23] Rule 724(4) UCPR is cognisant of the economic difference between States which is relevant to national legal practice. It is wrong to imply words into a regulatory instrument.
[24] The implication proposed by the plaintiff is neither simple nor grammatical nor consistent with an apparent statutory purpose. Authorities relied on by the plaintiff do not support its position.
[25] It is submitted that the question should be answered:
[43] Cannon Street Pty Limited v Karedis[10] may be distinguished. There was no similar limitation in the costs order in that case.
[44] Maggbury Pty Ltd v Hafele Australia Pty Ltd[11] may also be distinguished. In that case, the order was that the plaintiffs pay the second defendant's costs to be assessed without any other limitation.