When a Court makes a costs Order, it typically means that one party (usually the unsuccessful party) must pay some or all of the legal costs of the other. However, in most situations, the Order for costs doesn’t set out the amount to be paid, or when it has to be paid.
This post explains what happens after a costs Order is made in estate litigation in NSW or the ACT, and how parties can move from the Court’s decision to actual payment or enforcement of legal costs.
What Does a Costs Order Mean?
A costs Order generally sets out who must pay legal costs, but not how much. Common forms of orders include:
“Costs as agreed or assessed” – The parties should attempt to agree on an amount; if not, the costs must be formally assessed.
“Costs on the indemnity basis” – Requires the paying party to cover nearly all legal costs of the other, including some that might not be strictly necessary.
“Costs in the cause” or “Costs reserved” – These orders defer responsibility until a later stage or depend on the case’s outcome.
Both in NSW and the ACT, the actual amount payable must be worked out through negotiation or, failing that, costs assessment (NSW) or taxation of costs (ACT).
First Step: Try to Reach an Agreement
Before entering formal processes, the parties usually try to negotiate a cost figure. This often involves:
Exchanging invoices or itemised bills of costs;
Informal discussions between legal representatives; and
Offers to settle for a reduced or rounded amount.
If parties agree, payment can be made directly—there’s no need for court involvement or further paperwork or costs associated with any assessment, or delay.
There is no Agreement - Formal Assessment or Taxation of Costs
In NSW, if parties can’t agree on costs, the party entitled to payment can apply for a costs assessment under the Legal Profession Uniform Law (NSW) and associated rules. Any application must be made within 12 months of a costs order being made.
This is an administrative, not judicial, process managed by the Supreme Court’s Costs Assessment Scheme. An independent Costs Assessor will review the bill and determine what is fair and reasonable.
In the ACT, the equivalent process is referred to as taxation of costs, as outlined in the Court Procedures Rules 2006 (ACT). An application for taxation of costs must be made within 3 months of a costs order being made.
In the ACT, costs are assessed (or “taxed”) by a Registrar of the Supreme Court, who examines the bill, hears objections, and determines what is payable.
In both jurisdictions:
The process begins with a bill of costs served on the other party.
That party may respond with objections, and
The assessor (NSW) or registrar (ACT) decides.
What Happens After Costs Are Assessed or Taxed?
Once the amount is determined, the matter can go one of two ways.
In the event payment is made, the matter finalises. The paying party should pay the amount promptly, as interest may accrue on unpaid costs from the date of the original court order.
In the event that no payment is made, the party owed costs may commence enforcement action. The following is important to keep in mind:
In NSW, the party who is owed costs:
Must register the certificate of determination as a judgment of the Supreme Court under the Uniform Civil Procedure Rules 2005 (NSW); and
Thereafter, it can be enforced like any other judgment through garnishee orders, writs, or bankruptcy/insolvency.
In the ACT, the party who is owed costs:
Must apply for a certificate of taxed costs; and
Thereafter, file the certificate in the Supreme Court and enforce it as a judgment debt under the Court Procedures Rules 2006 (ACT).
Important considerations
If you have been ordered to pay costs, you should act proactively and seek an itemised bill from the other party, if you haven’t already received one. In the absence of a costs assessment/taxation, it is open to the parties to reach an agreement as to the amount that should be paid. If an agreement can be reached, payment should be made promptly to avoid interest and enforcement costs.
If you are entitled to costs, you must serve a bill of costs promptly and keep detailed records of your fees and disbursements paid. Don’t delay the filing of an enforcement application in the event you’ve not received payment.
A costs order is just the first step. Whether you’re paying or recovering legal costs, understanding the correct procedures in NSW or the ACT is essential to avoid unnecessary delay, expense, or enforcement proceedings.
If you’re unsure how to proceed—whether you need to assess, negotiate, or enforce—it’s important to seek legal advice to understand how to best proceed. Contact Robinson + McGuinness to arrange an appointment on (02) 6225 7040, by email on info@rmfamilylaw.com.au or get started now online with one of our experienced lawyers.