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COSTS

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Meaning
Remuneration which a party pays to his own solicitor for his professional services
legal advice; attendances,; drafting and copying documents; conducting legal proceedings, etc.

The sum which one litigant pays to another litigant to compensate the latter for the expense which he has incurred in the litigation

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court fees; stamping fees, etc


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Meaning
O59 r1(1) RHC
costs includes fees, charges, disbursements, expenses and remuneration; taxed costs means costs taxed in accordance with this Order.

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Entitlement to costs
Subject to the provisions of O59, no party shall be entitled to recover any costs of or incidental to any proceedings from any other party to the proceedings except under an order of the Court O59 r3(1) RHC. An order for costs is therefore essential, ie the court must make an order as to costs to enable a party to recover such costs incidental to the proceedings, except for matters falling under O59 rr10(1) and 11(1) RHC.
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Principles
Discretion
The award of costs is in the discretion of the court O59 r2(2) RHC

Costs follow the event


If the court in the exercise of its discretion see fit to make any order as to the costs of or incidental to any proceedings, the court must (subject to O59) order the costs to follow the event except when it appears to the court that in the circumstances of the case some other order should be made as to the whole or any part of the case O59 r3(2) RHC
Petroliam Nasional Bhd & Anor v Cheah Kam Ciew [1987] 1 MLJ 725
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Principles
The principles are these. (1) Costs are in the discretion of the court. (2) They should follow the event, except when it appears to the court that in the circumstances of the case some other order should be made. (3) The general rule does not cease to apply simply because the successful party raises issues or makes allegations on which he fails, but where that has caused a significant increase in the length or cost of the proceedings he may be deprived of the whole or a part of his costs. (4) Where the successful party raises issues or makes allegations improperly or unreasonably, the court may not only deprive him of his costs but order him to pay the whole or a part of the unsuccessful party's costs.
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Principles governing the courts discretion


This discretion, like any other discretion, must be exercised judicially, and the judge ought not to exercise it against a successful party except for some connected with the case. As I understand the law as to costs it is this, that where a plaintiff comes to enforce a legal right, and there has been no misconduct on his part - no omission or neglect which would induce the Court to deprive him of his costs - the Court has no discretion, and cannot take away the plaintiff's right to costs. There may be misconduct of many sorts: for instance, there may be misconduct in commencing the proceedings, or some miscarriage in the procedure, or an oppressive or vexatious mode of conducting the proceedings, or other misconduct which will induce the Court to refuse costs; but where there is nothing of the kind the rule is plain and well settled, and is as I have stated it.
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Exceptions to costs follow the event


The general rule sometimes gives way in particular circumstances. Examples

the court may award the winner only a proportion of his costs from or up to a specified stage of the proceedings; the court may make no order as to costs;
Cheng Mun Siah v Tan Nam Sui [1980] 2 MLJ 269 Re Syed Ahmed Hood Alsagoff decd [1961] MLJ 150 Anna Jong Yu Hiong v Government of Sarawak [1972] 2 MLJ 244

the winner may have to pay the losers costs of certain matters O59 r2(2) RHC
Chen Chow Lek v Tan Yew Lai [1983] 1 MLJ 170
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Other exceptions
Other exceptions
O59 r3(5) RHC O59 r3(6) RHC O59 r3(7) RHC

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Costs against solicitor personally


O59 r8(1) RHC provides that subject to the following provisions of the rule, where any proceedings costs are incurred improperly or without reasonable cause or are wasted by undue delay or by any other misconduct or default the Court may make against any solicitor whom it consider to be responsible (whether personally or through a servant or agent) an order disallowing the costs as between the solicitor and his client and
directing the solicitor to repay to his client costs which the client has been ordered to pay to other parties to the proceedings; or directing the solicitor personally to indemnify such other parties against cost payable by them.
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Taxation of costs
The party receiving costs in entitled only to his taxed costs.
The party will send his bill of costs to the other party and where the other party does not agree with the bill of costs, he is entitled to have the bill of costs taxed by the Registrar.

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Taxation of costs
Procedure
A part entitled to require any costs to be taxed must begin proceedings for the taxation of those costs by producing at the Registry the bill of costs and a copy thereof together with all necessary papers and vouchers O59 r20 RHC Where proceedings for taxation have been duly begun in accordance with r20, then, subject to paragraph (2) of this rule and rule 23, the Registrar shall give to the party beginning the proceedings and to any other party entitled to be heard in the taxation proceedings, not less than 7 days notice of the day and time appointed for taxation O59 r21 RHC
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Taxation of costs
Procedure
A party whose costs are to be taxed in any taxation proceedings, must within 2 days after receiving a notice under rule 21(1) send a copy of his bill of costs to every other party entitled to be heard in the proceedings - O59 r22 RHC

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Taxation of costs
Bases of taxation
Party and party basis
O59 r27(2) RHC

Common fund basis


O59 r27(4) RHC

Trustee basis
O59 rr30(1) and (2) RHC

Solicitor and own client basis


O59 r28 RHC

Indemnity basis
EMI Records Ltd v Ian Cameron Wallace Ltd [1982] 2 All ER 980
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Taxation of costs
Several parties
Where several parties are involved in an action, the court may make either a Bullock or a Sanderson order. Illustration
The plaintiff decides to bring proceedings against two defendants in the alternative. For instance, a pedestrian who was injured by a collision between two vehicles sues both drivers. If the plaintiff succeeds only against one defendant, the court in its discretion may order the unsuccessful defendant to pay the successful defendants costs.

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Taxation of costs
Several parties
Illustration
This may be done either
by an order that the unsuccessful defendant pay the successful defendants costs direct to him Sanderson order; or by an order that the plaintiff pay the successful defendants costs to him and recover them from the unsuccessful defendant as part of the plaintiffs cost of the action Bullock order

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Costs of interlocutory proceedings


There are many ways in which a court may deal with costs of the many interlocutory stages of action.
Reserved costs
This is where the courts defers the determination of the costs of any interlocutory proceedings pending the finality of the action. In other words, the amount of costs is postponed to the end of the trial of the action. This is where the costs of the interlocutory proceedings are to be awarded according to the final award of costs of the action at the end of trial. If the plaintiff/defendant wins the case, he gets the costs of the interlocutory proceedings; but if he loses, he does not have to pay the other partys interlocutory cost
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Costs in the cause

Plaintiffs/Defendants costs in the cause

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Costs of interlocutory proceedings


Plaintiffs/Defendants costs in any event
It does not matter which party wins the case, when the case is decided or settled the plaintiff/defendant is to have the costs of the interlocutory proceedings. This order is usually made when the interlocutory proceeding is rendered necessary by the action or default of the other party.
The plaintiff/defendant is to have the costs of the interlocutory proceeding without waiting for the final decision in the action.

Plaintiffs/Defendants costs

Costs of the day


These are usually awarded against a party who makes a successful application for the postponement of a hearing

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Costs of interlocutory proceedings


Costs thrown away
These are usually made on application to set aside a judgment and is imposed upon a defendant who has allowed judgment to be entered by default due to his failure to enter an appearance or to deliver his defence.
includes all costs reasonably incurred in enforcing the judgment such as execution and garnishee proceedings, but do not include bankruptcy proceedings.

But where the judgment obtained by the plaintiff is bad and irregular, the defendant is entitled to have it set aside as of right and to have the costs thrown away.
This means that each party must bear his own costs of the proceedings.
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No order as to costs

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Security for costs


In circumstances where the defendant feels that the strength of the defence is good and there is a good chance of defeating the plaintiffs case but is worried that the plaintiff will be unable to make payment as to the order as to costs that may be made at the end of the trial, the defendant may apply to the court that the plaintiff be made to provide security as to costs. If the defendants application for security for costs is allowed, the court will make an order for security for costs whereby the plaintiff will be required to pay specific amount of money into the court within specified period.
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Security for costs


O23 r1(1) RHC provides that the court may order the plaintiff to give security in any one of the 4 situations outlined, having regard to all the circumstances of the case. This gives the court a real discretion to order security for the defendants costs if it thinks it is just to do so. The court is bound to have regard to all the circumstances of the case in the exercise of its discretion.
KASTURI PALM PRODUCTS V PALMEX INDUSTRIES SDN BHD [1986] 2 MLJ 310 FARIDAH BEGUM BTE ABDULLAH V DATO' MICHAEL CHONG [1995] 2 MLJ 404
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Security for costs


4 situations under O23 r1(1) RHC

that the plaintiff is ordinarily resident out of the jurisdiction; or that the plaintiff (not being a plaintiff who is suing in a representative capacity) is a nominal plaintiff who is suing for the benefit of some other person and that there is reason to believe that he will be unable to pay the costs of the defendant if ordered to do so; or subject to paragraph(2), that the plaintiff's address is not stated in the writ or other originating process or is incorrectly stated therein; or that the plaintiff has changed his address during the course of the proceedings with a view to evading the consequences of the litigation,
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Security for costs


O23 RHC is without prejudice to the provisions of any written law which empowers the court to require security for costs of any proceedings O23 r3 RHC Example
s 351(1) of the Companies Act 1965
Where a company is plaintiff in any action or other legal proceeding the court having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the company will be unable to pay the costs of the defendant if successful in his defence, require sufficient security to be given for those costs and stay all proceedings until the security is given.

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Security for costs


In the exercise of its discretion to order security for costs, the court is guided by the following considerations

is the plaintiffs claim bona fide? Has he reasonably good prospects of success? is there admission by the defendant? is the application oppressive in nature, that is, to stifle a genuine claim? has the plaintiffs want of means been brought on by the defendant? at what stage of the proceedings is the application made?

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