A recent High Court ruling has thrown into doubt the appropriate application of costs orders.
In December 2010, the High Court dismissed an application for a special costs order with regard to a case the applicant had lost on appeal.
According to Steve McAuley, a solicitor director of the Sydney firm McAuley Hawach Lawyers, the High Court decision regarding a long-running defamation matter came "out of the blue", with far reaching implications.
"This decision potentially has the impact to affect not only High Court procedure and practice, but it could affect all the courts and tribunals in Australia," McAuley said.
"It has the potential to make people think they need to make their applications for special costs orders earlier than in the past."
The matter stretches back to 1997, when Westpac dishonoured 30 cheques drawn by Sydney real estate agency Homewise.
The sole shareholder of Homewise, Paul Atkas, originally instituted defamation proceedings against Westpac following the incident.
After the NSW Supreme Court ruled against Atkas, the High Court ruled in his favour on appeal in August last year, and awarded him $50,000 with costs.
Westpac then filed a summons seeking a reduction in the amount of total costs it should pay.
The bank submitted that Atkas should pay Westpac's costs from the period after 4 June 2007, as at that time it had offered to pay Aktas and his then co-plaintiff Homewise, $620,000 plus costs, on the condition of confidentiality. Aktas refused.
The High Court dismissed the amended summons from Westpac with costs.
The High Court found that although it had the power to recall the costs orders it made in August, it refused to do so on the grounds that Westpac had "ample opportunity" to foreshadow that it would make an application for special costs orders if the appeal succeeded, and that "the importance of the public interest in the finality of litigation" means that costs should be considered at the same time as the issue at hand.
Despite Atkas making known his preferred costs orders if the appeal was allowed in his notice of appeal, Westpac failed to make any submissions to the contrary until its summons after the judgment was delivered.