Ryan v Ess Pty Ltd & Ors  NTSC 36
PARTIES RYAN v ESS PTY LTD & ORS
TITLE OF COURT SUPREME COURT OF THE NORTHERN TERRITORY OF AUSTRALIA AT DARWIN
FILE NUMBER 25 of 2005 (20504486)
DELIVERED 3 March 2006
HEARING DATE 16 February 2006
REASONS OF The Master
PRACTICE - Northern Territory – costs – Supreme Court Rules O.63 – standard basis cf indemnity basis – solicitor and client costs – taxation before the conclusion of the proceeding
Colgate Palmolive v Cusson (1993) 46 FCR 225
Markorp v King (1992) 106 FLR 286
Re Wilcox (1996) 72 FCR 151
Vivanet v Power  NTSC 66
CASES REFERRED TO
E.M.I Records v Ian Wallace  1 Ch. 59
TTE v Ken Day  2 NTLR 143
Plaintiff Morgan Buckley
Second Defendant Cridlands
Third Defendant Hunt & Hunt
Fourth Defendant Ward Keller
Judgment category classification
Judgment ID number mas1106
Number of pages 5
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
No. 25 of 2005 (20504486)
MICHAEL WAYNE RYAN
ESS PTY LTD
(ACN: 061 845 430)
INTICO (WA) PTY LTD
(ACN: 068 898 037)
PROSAFE RIGS LIMITED
(ABN: 46 103 055 429)
CONOCOPHILLIPS JDPA PTY LTD
(ACN: 097 445 942)
MASTER COULEHAN: REASONS FOR DECISION
(Delivered: 3 March 2006)
 This proceeding was commenced by writ on 21 February 2005, the plaintiff claiming damages for personal injuries suffered on 22 August 2003. On 5 July 2005 the plaintiff was ordered to file and serve his statement of claim within 3 months. On 18 November 2005 this order was extended for a further 28 days from that date. On 9 February 2006 the fourth defendant applied for an order that the proceeding be dismissed for want of prosecution and failure to comply with the order made on 18 November 2005.
 The application was heard on 16 February 2006, on which date the plaintiff was ordered to file and serve his statement of claim within 7 days, failing which his claim was to be dismissed. The fourth defendant has sought the costs of this application, on a solicitor and client basis, to be taxed forthwith.
 The general rule is that, subject to the Rules, the costs of a proceeding are in the discretion of the Court (O.63.03 (1)). Where the strict application of Order 63 would result in an anomaly, the Court may make such order as to costs as it thinks equitable in the circumstances (O.63.03 (2)). Costs shall be taxed on the standard basis or the indemnity basis (O.63.25).
 On the standard basis a reasonable amount shall be allowed for all costs reasonably incurred and any doubt as to whether the costs were reasonably incurred shall be resolved in favour of the paying party (O.63.26). On the indemnity basis all costs are allowed except to the extent that they are of an unreasonable amount or have been unreasonably incurred, and any doubts are resolved in favour of the receiving party (O.63.27). The standard basis generally applies (O.63.28) and the Court may order that costs be taxed on the indemnity basis (O.63.29).
 There is no mention of costs on a solicitor and client basis in Part 3 of Order 63, although there is a provision for such costs in O.26.11(3). Costs payable to a solicitor who acts for a person under a disability are to be taxed on the indemnity basis unless the Court otherwise orders (O.63.31). There is provision in Part 6 of Order 63 for the taxation of costs payable to a solicitor by his own client, which are to be taxed on the indemnity basis, but with certain presumptions as to whether or not costs have been reasonably incurred or are reasonable in amount (O.63.59).
 This application is predicated on there being a difference between the costs that may be allowed on taxation and the costs paid by the party in whose favour an order for costs is made. There was no evidence as to such a discrepancy, but it seems to be accepted that this is the case (see Colgate Palmolive v Cussons (1993) 46 FCR 225, 226-227 and Re Wilcox (1996) 72 FCR 151,156).
 It has been suggested that the provisions of O.63.27 reflect the general law conception of what indemnity costs represent (see G E Dal Pont “Law of Costs” paragraph 16.7 and the cases referred to in note 28). In E.M.I Records v Ian Wallace (1983) 1 Ch. 59, at pages 72 and 74, Sir Robert Megarry V.-C gave cogent reasons as to why costs as between solicitor and client may not be appropriate as between party and party. In any event, the Court’s discretion, as provided for in O.63.03, is expressed to be subject to the Rules, which stipulate the bases for taxation, and no anomaly is apparent.
 The costs of an interlocutory application are to be borne by each party unless the Court otherwise orders (O.63.18). In this case there are good grounds for ordering otherwise. The plaintiff was seriously in default in failing to deliver a statement of claim, and the fourth defendant acted reasonably in bringing this application to force compliance with an order of the Court (see also O.24.01).
 The discretion to order costs on an indemnity basis is unfettered, but it is accepted that the circumstances must be such as to warrant departure from the general rule (see Colgate Palmolive at page 233, Re Wilcox at page 158 and Vivanet v Power (2001) NTSC 66 paragraph 15). The circumstance relied on by the fourth defendant is what was said to be the “contumelious” disregard of the Court’s orders. The plaintiff has offered no evidence by way of explanation for the delay, but the circumstances are not such as to suggest wilful disobedience. I am not persuaded that this is a proper case for indemnity costs.
 In the normal course, the costs of an interlocutory application are not to be taxed until the conclusion of the proceeding (see O.63.04 (3)). In TTE v Ken Day (1992) 2 NTLR 143, at page 145, Martin J (as he then was) suggested an approach that took into consideration whether the successful party ought to have reasonably anticipated interlocutory proceedings of the kind in question. In Markorp v King (1992) 106 FLR 286, at page 293, Mildren J suggested that the sub-section was directed to costs orders involving relatively small sums and that the rationale was to reduce the administrative burden of taxation, which may become unnecessary and which may be offset by orders in favour of the other party. In this case, it is doubtful that the fourth defendant may reasonably have anticipated having to make an interlocutory application to require the delivery of a statement of claim. However, the costs of this application should not be substantial and it is possible that there may be offsetting applications. On balance, I conclude that an order for taxation before the conclusion of the proceeding is not warranted.