1.

0 Costs
 Definition

Order 59 provides that costs of incidental proceedings in an action shall be in the

discretion of the court unless otherwise specifically stated in the rules. (O. 59 r. 2)

 Court Order for Cost

TABLE

Term Effect

"Costs" Where this order is made in interlocutory proceedings, the party in

whose favour it is made shall be entitled to his costs in respect of those
proceedings whatever the outcome of the cause or matter in which the
proceedings arise.

"Costs reserved" The party in whose favour an order for costs is made at the conclusion
of the cause or matter in which the proceedings arise shall be entitled
to his costs of the proceedings in respect of which this order is made
unless the Court orders otherwise.

"Costs in any event" This order has the same effect as an order for "cost" except that the
costs shall be determined only after the conclusion of the cause or
matter in which the proceedings arise.

"Costs here and The party in whose favour this order is made shall be entitled not only
below" to his costs in respect of the proceedings in which it is made but also to
his costs of the same proceedings in any lower Court, tribunal or other
body constituted under any written law or in arbitration proceedings.

The party in whose favour an order for costs is made at the conclusion
"Costs in the cause"
of the cause or the matter in which the proceedings arise shall be
or "Cost in the
entitled to his costs of the proceedings in respect of which such an
application"
order is made.

"Plaintiff's costs in the The plaintiff or defendant, as the case may be, shall be entitled to his
cause" or costs of the proceedings in respect of which such an order is made if
 judgment is given in his favour in the cause or matter in which the
"Defendant's costs in proceedings arise, but he shall not be liable to pay the costs of any
the cause" other party in respect of those proceedings if judgment is given in
favour of any party or parties in the cause or matter in question.

Where proceedings or any part thereof have been ineffective or have

been subsequently set aside, the party in whose favour this order is
"Costs thrown away"
made shall be entitled to his costs of those proceedings or that part in
respect of which it is made.

The plaintiff or defendant, as the case may be, shall be entitled to his
"Costs paid forthwith" costs of that part of the proceedings in respect of which such an order
is made, notwithstanding that the cause or matter has yet to be tried.

 Court’s Discretion

HONG LEONG BANK BHD v. LEE KHAI SIN [2008] 7 CLJ 129

The principles in this area of law is well settled. The principles relevant to this review may be
summarised as follows:

(a) The object of awarding costs to the litigant is to indemnify him for the expenses he had
incurred in successfully establishing his legal rights. Order 59 of the RHC 1980 provides that
costs of incidental proceedings in an action shall be in the discretion of the court. The court
shall have full power to determine by whom and to what extent the costs are to be paid. The
discretion of the court is very wide, but it has to be exercised judicially and on established
principles.

(b) Because costs is in the discretion of the court there has been a rule of practice of the House
of Lord as stated by Viscount Cave LC inDonald Campbell & Co. Ltd. v. Pollak, that no appeal
would lie for costs only, but the House will however entertain an appeal as to costs, where it is
alleged that the order is founded upon an error of law.
(c) An appellate court does not interfere in the question of costs without reluctance. This is
because the court below has an absolute discretion except that the discretion must be exercised
judicially. An appellate court should only interfere unless it can be shown that there has been an
error of law or the purported exercise of discretion was based on grounds wholly unconnected
with the cause of action. The White Book says at p. 938:

On an appeal as to costs where the costs are in the discretion of the Judge the C.A. will assume
that he exercised his discretion unless satisfied that he did not do so (Re Rotch [1909] 54 SJ 30).

A fortiori it will not interfere where he assigns reasons therefore which are perfectly germane
and not based on any false principle (Lever Bros v. Masboro' Equitable, etc., Society [1912] 28
TLR 294); nor where there are also other possible grounds for his discretion (Societe des Hotels
Raunis v. Hawker [1914] 30 TLR 423, CA).

(d) Wee Chong Jin CJ in K. E. Hilborne v. Tan Tiang Quee said:

It has long been well settled that costs are in the discretion of the court. It has also long been
well settled that an appellate tribunal is not entitled to interfere with a discretion exercised by a
lower court unless it is clearly shown that the discretion has been exercised on wrong principles.
It has also long been well settled that in the exercise of its discretion a court may, if in its
opinion there are grounds for it to do so, refuse to award costs to a party who establishes that
he has a good cause of action.

(e) In Petroliam Nasional Bhd (Petronas) & Anor v. Cheah Kam Chiew [1986] 1 LNS 81, the
Supreme Court stated that an appellate court will be reluctant to interfere with the judge's
order on costs. This was because both s. 68(1)(c) of the Courts of Judicature Act 1964 andO. 59
r. 3(2) of the RHC 1980 had put it beyond doubt that questions relating to costs were matters
entirely within the discretion of the court.

An appellate court will only interfere if there has been an error of law; or if the purported
exercise of discretion was based on grounds wholly unconnected with the cause of action.
(f) In Co-operative Central Bank Ltd v. Tan Nyap How [1997] 1 LNS 414, the court considered the
provision of O. 59 of RHC 1980. Augustine Paul JC (as he then was) made the following
observations:

In taxation review proceedings, the court would have no jurisdiction to interfere with the
discretion of the registrar on the issue of quantum unless it could be demonstrated that he had
erred on a question of principle or had failed to take into account some relevant consideration.
(b) Before discretion could be exercised, sufficient materials must be placed before the decision-
maker to enable him to exercise the discretion. (c) The note to item 26 Pt IV App 1 and para 1(2)
Pt X App 1 of O. 59 of the RHC provided the basis for making the discretionary award under item
26. (d) They identified the materials which must be considered by the registrar in exercising his
discretion. (e) The registrar would be able to consider the materials only if they were placed
before him in the proceedings in which the award was sought. (f) Thus full particulars of the
work done in respect of instructions for trial must be set out in the bill of costs to enable the
registrar to settle the quantum of the charges. (g) The burden was on the party bringing in the
bill of costs and claiming to be allowed the amount charged therein to show that the amount
was fair and reasonable and ought to be allowed. (h) Failure to consider matters which ought to
have been taken into account would mean that the registrar had erred in law and that the court
could review the exercise of the discretion.

In this case the SAR had not considered all the matters stipulated in the note to item 26 and the
circumstances as described in para 1(2). (i) The amount awarded by the SAR therefore was
based on insufficient particulars and amounted to an error of principle, (j) The lack of particulars
also precluded the court from amending the registrar's certificate in order to make a lawful
determination, (k) Thus the proper order would be to refer the matter back to the registrar to
review his taxation for item 26 upon the defendant submitting a fresh bill of costs with
particulars.

(g) In Gooi Hock Seng v. Chuah Guat Khim [2001] 1 CLJ 583, the issue before the Supreme Court
was in respect of taxation, on the question whether registrar's award on quantum can be
interfered and whether interest is payable where an order directs payment of costs to be taxed.
The court held that:

Bearing in mind the decisions in Coon v. Diamond Tread Co (1938) Ltd [1950] A ELR Vol 2385
and Gorfin v. Odhams Press Ltdand having considered what was laid down in the Malaysia Court
Practice, High Court Vol 1, p 3941, the respondent's application for review of the first and third
items ought to be dismissed. The phrase "as the circumstances require" in Order 59 r. 36(5),
confers on the judge, a discretion which is to be judicially exercised. The registrar's decision
should not be interfered with unless there was an error of principal or some other material
error and for this purpose, a broad overview of the matter should be taken. The court will not
interfere with the decision of the taxing Registrar upon a mere question of quantum if the
taxing Registrar has exercised his discretion after consideration of all the circumstances and if no
question of principle arises. It is only when the taxing Registrar's decision has been exercised on
some wrong principle or the quantum allowed is obviously wrong that the Judge will interfere.

As was laid down by the Federal Court in Liau Kim Lian v. Bajuria [1971] 1 LNS 63, interest is
payable where an order directs payment of costs to be taxed, and a judgment for damages to be
assessed, or for costs to be taxed, carries interest from the entry of judgment and costs to be
taxed, carries interest from the date of entry of judgment and not from the date of assessment
or taxation. In the circumstances, interest on costs should have been awarded by the Registrar.
In the circumstances, the Registrar's certificate should be amended accordingly, to include
interest on costs at 8% per annum from the date of judgment of the appeal in the Federal Court
dated April 17, 1993 to the date of realization.

SITI JULIANA SUEN ABDULLAH & ORS v. SUNGEI WANG PROPERTIES SDN BHD &
ORS [2009] 3 CLJ 592

(d) Further, access to justice must necessarily mean that the court must not be unscrupulous in
deciding on the issue of affordability to justice. Access to justice and affordability is within the
spirit and intent of the Federal Constitution and I will say by reading the Federal Constitution as
a whole, access and affordability to justice attains a unique stature and stands as a fundamental
guarantee under the Federal Constitution. The established criteria for assessment of getting up
fees under the caption skill, experience, special knowledge, etc in my view may not be sufficient
if the court has not taken into consideration the issue of affordability to justice. Bad precedents
must be read with caution when the sole discretion as to costs rest with the respective judge
and much weight ought to be given to the issue of access and affordability to justice when
dealing with getting up fees. (See 'Access to Justice' - interim report 1995 - Lord Woolf). In
consequence, getting up fees ought not be excessive and in this respect court ought to be least
concerned of the winning parties' costs to its solicitors, where the law is settled and in cases
where even a novice counsel can articulate the argument.

 Taxation of Costs

Powers of Registrar to determine costs (O. 59 r. 12)

(1) Subject to Order 59, rule 7, the Registrar shall have power to determine-

(a) the costs of or arising out of any cause or matter in the Court;

(b) the costs directed by an award made on a reference to arbitration under any written law
or pursuant to an arbitration agreement to be paid;

(c) any other costs the determination of which is directed by an order of the High Court; and

(d) any costs directed to be determined or settled by or under any written law.

(2) An application under this rule shall be in Form 117A.

23. Scale of costs for trial in the Subordinate Courts (O. 59 r. 23)

(1) Subject to the provisions hereunder, upon the conclusion and determination of any trial in
the Subordinate Courts, the party entitled to costs shall, unless the Court otherwise orders, be
paid fixed costs in accordance with the following scale:
  Bullock Order

Bullock v London General Omnibus Co (refer to page 470 of Janab’s Civil Procedure)

FEDERAL FLOUR MILLS LTD v. "TA TUNG" OWNERS & ORS [1966] 1 LNS 48

Now as regards the costs of the second defendants, Mr. Puthucheary has asked the Court to
order the plaintiffs to pay the second defendants' costs in any event or if a Bullock Order is
made, it should be in an unadulterated form, meaning that the Court should order the plaintiffs
to pay the second defendants' costs and the plaintiffs are allowed to recover such cost from the
first defendants. Mr. Puthucheary cited to me Mayer v. Harte and Ors. [1960] 2 All ER 840 where
it was held that -

costs were in the discretion of Court, subject only to the requirement that the discretion
must be judicially exercised, and there was no principle of law that required the county
Court Judge to make an order for the first and second defendants to recover their costs
direct from the third defendant merely because the third defendant was insolvent, nor
was it shown that the county Court Judge failed to take into consideration the third
defendant's insolvency when deciding what order to make as to costs; therefore the
county Court Judge had not failed to exercise discretion judicially and the Court of
Appeal would not interfere.

In view of these circumstances, I am of the opinion that the proper order as to costs of the
second defendants is to order the plaintiffs to pay the second defendants' costs. The costs of the
second defendants paid by the plaintiffs shall be included in the costs to be paid by the first
defendants to the plaintiffs.

 Sanderson Order

In a nutshell:-

i) Judgment for the plaintiff;

ii) The defendant to pay the plaintiff’s costs;
iii) The defendant to pay the costs of the co-defendant directly for defending the action
successfully.
 TAKONG TABARI v. GOVERNMENT OF SARAWAK & ORS & ANOTHER APPEAL
[1998] 4 CLJ 589

[3] Under O. 59 r. 3(2) of the Rules of the High Court 1980,the judge had the jurisdiction to
make a Bullock or Sanderson order. On the facts, it was reasonable for the appellant to have
joined the defendants as it was not possible to ascertain who was responsible for the
explosion. The surrounding circumstances of the appellant's claims called for the exercise of
the discretion to make a Sanderson order. The order of the judge was therefore varied such
that Liew's costs were to be paid directly by the Government and the bank in proportion to
their respective liabilities.

 Costs for Interlocutory Proceeding

Where this order is made in interlocutory proceedings, the party in whose favour it is made
shall be entitled to his costs in respect of those proceedings whatever the outcome of the cause
or matter in which the proceedings arise.

Costs for interlocutory applications (Subordinate Courts) (O. 59 r. 20)

Costs for interlocutory applications that may be allowed in the Subordinate Courts are as
follows:

(a) in the Magistrates' Court, a sum not exceeding RM2,500.00; and

(b) in the Sessions Court, a sum not exceeding RM8,000.00.

Costs for interlocutory applications (High Court) (O. 59 r. 21)

The amount of costs payable upon the conclusion of any interlocutory application, other than
those falling within the ambit of rule 22 shall be at the discretion of the Court, but in fixing the
amount of costs, the Court shall have regard, inter alia, to the factors set out in rule 16.

 Guarantee for Costs

ACE POLYMERS (M) SDN BHD v. KETUA PENGARAH LEMBAGA KEMAJUAN IKAN
MALAYSIA & ORS [2012] 8 CLJ 440

[27] This section provides the court with discretion as to whether or not to order that security
for costs be provided by a company that has been wound-up. In Skrine & Co v. Mbf Capital Bhd
& Anor & Other Appeals [1998] 3 CLJ 432, the Court of Appeal was of the view that s. 351 "...
provides for a two stage inquiry in the process of arriving at the conclusion as to
whether security for costs should be awarded in a particular case in which the plaintiff is a
company. The first step is for the court hearing an application in this regard to determine
whether there is credible evidence. The second step is to ascertain whether that evidence,
when found to be credible, supports the belief that the company will be unable to pay the costs
of a successful defendant". This approach was followed by the Court of Appeal recently in North
Plaza Sdn Bhd v. United Securities Sdn Bhd [2010] 1 CLJ 470.

[28] In North Plaza, the Court of Appeal expressed views similar to those first stated by Jessel
MR in Northampton Coal, Iron and Waggon Company v. Midland Waggon Company [1878] 7 Ch
D 500, 503, that the "fact of the plaintiff company being in liquidation would be sufficient
'reason to believe' the assets to be insufficient unless evidence to the contrary was given".
Speaking for the Court of Appeal, Mohd Hishamudin JCA said at p. 642:

Based on the above principle, and considering that the respondent had been wound up by the
court, there is, therefore, reason to believe that the respondent would be unable to pay the
costs of the appellant if the latter were to be successful in their defence - unless evidence to the
contrary is given by the respondent. The inquiry then would be: has the respondent given any
evidence to the contrary? We must say that we are unable to find any credible evidence to the
contrary.

[33] In its judgment given orally in Interfood Sdn Bhd v. Arthur Anderson & Co & Anor the Court
of Appeal echoed its earlier decision in Haidakota (M) Sdn Bhd v. Tan Tiam Chai & Another
Appeal [2009] 1 CLJ 699 which reviewed "some of the principles that broadly guide the exercise
of discretion" under s. 351 of the Companies Act 1965. Those guiding principles may be
summarised as follow:
i. an application for security for costs must be made with sufficient promptitude after the issue
of the writ;

ii. an order directing the provision for security should not generally be made where the making
of it would be oppressive, especially where the plaintiff has an arguable case;

iii. such an order should not be made where there is an absence of mala fide on the part of the
plaintiff in bringing the claim;

iv. special attention should be paid to the balance between exposing an innocent defendant to
the expense of defending a claim against shutting out a plaintiff from ventilating a genuine
grievance.

 Others

Interest on cost (O. 59 r. 24)

Any award of costs made under this Order shall carry such interest as may be specified under
Order 42, rule 12, from the date of award of cost until full payment.

Costs of the day (O. 59 r. 23(7))

Wherever on the day fixed for the trial of any proceedings the same is adjourned on the
application of any party, the Court may order the party at whose instance the application for
adjournment is made to pay to the other party any fees, disbursements and expenses thrown
away by the adjournment and costs not exceeding on each occasion, one quarter the costs for
advocacy.