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[2023] QSC 92
This case considered whether costs orders in favour of both parties (on a claim and counterclaim) should be set off against one another, and whether a stay should be granted on execution to enable this to happen. Martin SJA decided that it was appropriate to make such orders.
Martin SJA
5 May 2023
Background
After a lengthy trial relating to the construction of a coal export terminal, Flanagan J gave judgment for both the plaintiff (“CMC”) on its claim and for the defendant (“WICET”) on its counterclaim. [1]. As a result, each party had a costs order in its favour. [1].
In this application, WICET sought an order that the costs orders be set off against each other, and that there be a stay on execution of CMC’s costs order until WICET’s costs had been assessed, to enable a set-off to happen. [1].
In the result, Martin SJA made the orders sought by WICET. [31].
Why the costs orders were to be set off and a stay ordered to allow this
Martin SJA noted that the jurisdiction to set off one costs order against another “neither arises from statutory nor equitable origins but is instead an exercise of the Court’s inherent jurisdiction over its own suitors” (quoting from Aristocrat Technologies Australia Pty Ltd v Allam [2017] FCA 812). [9].
To enable a set-off to occur, WICET argued that the appropriate course was to additionally order a stay on the execution of the liquidated costs order (CMC’s) to enable assessment of the unliquidated costs order (it’s own). [11]. As observed in the unreported decision of Wentworth v Wentworth [1994] NSWSC, “there should be no execution until the taxation of all the bills is complete and it can be seen which way the balance lies”. [11].
CMC did not argue that the Court could not order a set-off; but it opposed an order for a stay, on the basis of WICET’s delay. [13]. However, while Martin SJA accepted that delay was to be taken into account, he was satisfied that the “extreme complexity and size” of assessing costs in this case indicated that WICET had proceeded “at a reasonable pace given all the circumstances” (despite several years having passed). [21].
His Honour noted that an order of set-off would be “of no use to WICET unless there is a corresponding stay of the order in CMC’s favour”. [22]. In this case, CMC had not demonstrated that it would be prejudiced by the grant of a stay, and it was common ground that WICET would be “able to pay” whatever amount may be finally determined as owing. [30].
Accordingly, his Honour considered it appropriate to order that there be a set-off of the costs orders, and a stay of execution until the assessment had been undertaken to allow this to happen. [31].
W Isdale of Counsel