notes for students

1. COST

2. COSTS
Meaning of cost is defined in o59r1 where it ‘include fees, charges,
disbursements, expenses and remunerations.
i. Client - solicitor
Client pays own lawyer regardless outcome, order not required and
not restricted (could be corporate, conveyancing or litigation).
ii. Party to party
Between litigants, contrast party and party
Old base for taxation
Depends on outcome (losing party pays winning party)
General rule: order required o59r3(1)
Integral to court proceedings: litigation only.

3. Power of court to award costs is discretionary; o59r2
Incidence - who bears
Quantum - how much
Exceptions
O59r3(2) ‘costs follow the event’
Outcome of the litigation would be that unsuccessful party pays the successful
party his costs and he is left to pay his own costs.
When is departure justified?
O59r5 deals with misconduct or neglect
Kerajaan Negeri Johor & Anor v Adong Kuwali
Reason not given, no evidence of misconduct and no order as to cost. It was
silent and cost disallowed (each party bears own costs).
On appeal, it was held that it was flawed, cannot simply exercise power for
departure. Must have reason.
Chen Chow Lek v Tan Yew Lai; the D won the case but had to pay for the costs of
appeal as it was the D’s fault which made the P commence the action.

4. Illegal Contracts
Cheng Mun Siah v Tan Nam Su; involved a plot of land in
Singapore, under the Act, have to get approval to sell the lad.
Sale of Singapore property to a foreigner is in breach of the
statute. Claim for refund of deposit. Relief denied to P. P cannot
be heard to allege his own turpitude and that any loss he may
suffer is well deserved.
Therefore ‘no order as to cost’ was made. Since both parties
have offended againstthe law.
Points not raised below.
appeal
1st instance

5.  Anna Jong Yu Hiong v Governmentof Sarawak; cost of appeal
disallowed. Succeeded on a point or case not raised in the court below.
Re Syed Ahmed Hood Alsagiff Decd - ‘no order as to costs either here
or below’, relevant authorities which determined this appeal not cited
below.
 PetroliamNational Bhd v Cheah Kam Chiew; Cost Awarded to Loser.
BBMBbank is in financial distress. Government needs to rescue the
bank and asked Petronasfinancially aiding the company. CKC is a DAP
member and sue the government and Petronasas he looked at the
Petroliam Act. According to the said act, it was said to be outside the
power of Petronasto do so. Government went on amended the
Petroleum Act and gives power to Petronas to act and make it works
retrospectively.Judge had to throw out the case as CKC has no cause to
continue, but held Petronasto pay CKC’s cost.Petronas and government
appealed as to the decision made as to the costs. Appellate court
reluctantto interfere unless there is an error of law.

6. O59r6 Personal Liability
“Incurred improperly”
“Wasted by undue delay or by any other misconduct or default”
Disallow solicitor - client costs
Repay the client if the client had already paid
Personally indemnity other parties if not paid yet.
Give reasonable opportunity to appear and show why other
should not be made.

7. Karpal Singh v Atip bin Ali; ‘conspicuously unmaintainable’. Atip is an
UMNO member, decided to sue Karpal Singh and represented by BS. BS
asked to file defamation suit againstKS. Court held that the suit is
conspicuously unmaintainable. Held that this is dereliction of lawyer’s
duties. Lawyer personally liable to costs.
High Court (determined and assessed and approved) vs Sessions Court
(fixed, stipulated in scale of costs,estimated with mathematical precision)
High court
O59r19discretion of the court
O59r16factorsthat need to be considered when making the costs order.
SubordinateCourts
O59r23the scale of costs

8.  File at the High Court but actually is within the jurisdiction of
the subordinate court.
 S23 Courts of Judicature Act 1964 provides that a High Court
to try all civil proceedings.
 See BNM v Gerald Glesphy; costs sanctions. Filed in HC but
within the jurisdiction of subordinate court. P shall not be
entitled to any more costs than he would have obtained at
subordinate court unless the judge certifies otherwise. See
o59r16(6)

9. Interlocutory matters
Subordinate court
O59r29; MC, RM2500 cap and SC, RM8000 cap
High court, refer o59r21 and see o59r16 for factors.
Judgment without trial
O59r22 applies to both HC and Sub Court.
This includes default judgment, summary judgment and striking out.
Cost reserved- costs postponed or deferred to the conclusion of case (judge decides the costs
later)
Costs in the cause - if a party loses at the interlocutory proceeding but later won the final case.
Claimable the cost in interlocutory (whoever wins the final case will also get the interlocutory
costs).
P’s costs in the cause - if P wins the cause, can claim. If P loses the cause, does not have to pay the
D’s costs.
D’s costs in the cause - if D wins the eventual cause, can get interlocutory proceeding costs. If D
lists the eventual cause, no need to pay P’s cost.
Costs thrown away - typically when JID set aside. If irregular, awarded to D. If regular, awarded to P
(therefore D failed to enter appearance or fail to file defence - omission).
Costs of the day - adjournment of hearing successfully obtained, pay the other side’s costs.
Costs paid forthwith - pay now
This order has neutralises o59r7 which provides ‘shall be paid at the conviction of the
proceedings’. Unless the court otherwise order.

10. Basis of Assessment
At common law, there were used to be five basis. However, now there is
only two applied on Malaysia. Which is the standardbasis and indemnity
basis.
Standard basis
 Reasonable amount
 In respect of all costsreasonably incurred
 Favour the paying party
 Default position
Indemnitybasis
 All cost shall be allowed
 Except it unreasonable amount or unreasonably incurred
 Favoursrecipient (receiving party)
Procedure is laid down in o53r7

11.  Submissions plus bill of costs
 Value of getting up (covers researching and mental
skills)
 Disbursement reasonably incurred (driving costs,
photocopycosts)
 Allocation certificate - certificate allowing costs.

12. Bullock and Sanderson Orders
Bullock v The London General Omnibus Company& Ors
P get costs from unsuccessful defendant and payscosts to successful
defendant.
P’s claims dismissed with cost.
Sanderson v Blyth Theatre Company
Recognitionof Court’spower
Unsuccessful D to pay the cost of the successful defendant directly.
Federal Flour Mills Ltd v Ta Tung Owners & Ors
Malaysiancases illustratedon both of the cases.

13. SUMMARY
 Order 59 Rule 1; definition of Cost: remuneration which
a party pas to his own solicitor or the sum which one
litigant pays to another litigant.
 Cost of the day; means a party who applies for
adjournment has to pay the costs.
 Order 59 Rule 3; an order for cost is essential.
 Order 32 Rule 1; if there is no cost given, application is
made orally or by NASA.
 Order 59 Rule 2(2); power to grant cost is discretionary.
 Order 59 Rule 3(1); general rule to grant cost.

14. SUMMARY
Exceptions (Order 59 Rule 3(2)):
1) Order 59 Rule 5; misconductor neglect
a. Kerajaan Negeri Johor & Anor v Adong Kuwali; held that the court cannot simply
exercise power for departure and reason for not granting cost must be given.
b. Chen Chow Lek v Tan Yew Lai; the D won the case but had to pay for the costs of appeal
as it was the D’s fault which made the P commence the action.
2) Illegal contracts
a. Cheng Mun SIah v Tan Nam Su; both parties had breach the law and hence no order as
to cost was made.
3) Party is successfulon a point not raised below (in appeal or 1st
instance);
a. Anna Jong Yu Hiong v Government of Sarawak
4) Relevent authorities which determined this appeal not cited below
a. Re Syed Alsagosf, Dec’d
5) Unusualthing
a. Petroliam National Bhd v Cheah Kam Chiew; the P took action against PNB for
financially aiding a company which contravened the Act. PNB got the Parliament to
amend Act retrospectively. The court held that PNB need to pay the cost to CKC.
6) Order 59 Rule 6; costs againstAdvocateand Solicitor personally
a. Karpal Singh v Atip bin Ali; the P (Atip/ Umno member) wanted to sue Karpal Singh for
defamation. However, defamation could not be made against a class of member. The
court held it was conspicuously unmaintainable and the lawyer acting for them need to
pay for the cost.

15. HIGH COURT
 Order 59 Rule 19; discretionary power of the HC
 Order 59 Rule 16; factors to be considered, this include the standard basis and the
indemnity basis.
 Getting up fees
A solicitor is entitled to getting-up fee for work stipulated in preparation for trail or
hearing.
 Form117 ROC
 Order 59 Rule 23; provided a fixed scaleof costs in proportion to the amount of the
subjectmatter of the action.
 Order 59 Rule 16; provides thatthe Registrar has discretion as to costs.
 Bullock and Sanderson Orders
1) Bullock v The London General Omnibus Company & Ors; P get costs fromunsuccessful
D and pays costs to successfulD. P’s claims dismissed with cost.
2) Sanderson v Blyth Theatre Company; UnsuccessfulD to pay the costof the successfulD
directly.
3) FederalFlour Mills Ltd v Ta Tung Owners & Ors; both cases wereillustrated in this case.

16. SECURITY COSTS
O23
Advise D how to protect his financial interest
Against whom?
D’s application against P
General Rule is that o23 is only for the D and people as well as in the position of
the D.
If D has a counterclaim against the P, under r1(3) the P can get security cost from
D when D is claiming a counterclaim.
Between P and Third Party
Can a Third Party get a security costs from P? No, this is due to the relationship
with the main action. It is a separate and independent claim.
Can third party get a security costs from D? Yes, third party is in the position of
D.
Non-party funding litigation
r2A

17. Timing
Adarsh Pandit v Viking Engineering Sdn Bhd; Federal Court held that this
application for security of costs can be made at any time and not necessary to
file at the earliest opportunity.
A Co v K Ltd; the proper time to apply for security is at the early stage. Went on
to appeal. A question of strict compliance with timetables. Time is of the
essence in the cause of action.
O23 provides that
 where is the P’s ordinary residence? Must be out of jurisdiction
 Nominal P, unable to pay the cost of D
 Check OS - P’s address. Whether it is undisclosed or incorrectly stated
 P’s address changed during the course of the proceedings. Why? To evade
the consequences of litigation.
S351 Company Act 1965 provides for registered company credible evidence
unable to pay.

18. Kasturi Palm Products v Palmex Industries Sdn Bhd; P’s own a bungalow in
India. Whether P resident abroad should provide security for costs. It is not a
rigid rule, as of right and as of cause. It is a matter of discretion of the court.
Held that order P to deposit RM10,000. Costs of the application shall be in cost
in cause. The question simply whether or not it is just to order for security for
costs.
Porzelack KG v Porzelack (UK) Ltd; likely outcome of the case
Faridah Begum bte Abdullah v Dato Michael Chong; Singapore citizen and
adjudged bankrupt. Does not preclude o23. Avoid any attempt at a detailed
investigation into the merits of the case. Court should only embark into the
investigation upon merits in plain and obvious cases. Impecuniosity by itself is
not a sufficient ground. P had not disclosed her Singapore address.
Sir Lindsay Parkinson & Co v Triplan; stifle genuine claim. Has P’s impecuniosity
caused by D?
If P fails to provide security
Stay of action or struck out or dismiss for want of prosecution
False address
There is an exception laid down in o23r1(2). Unless innocent or no intention to
deceive.

19. SUMMARY
 General Rule: Order 23
 D may apply to court for security of costto the P but the P cannot apply
for order 23.
 Order 23 provides that (a) the P must be out of jurisdiction,(b) nominal
P, (c) address undisclosed or incorrectly statedand (d) P’saddress
changed.
 Section 351 Companies Act 1965provides for registered company
credible evidence unable to pay.
 What are the circumstanceswill the court takes into account while
grantingsecurity for cost?
1. Kasturi Palm Productsv Palmex Industries Sdn Bhd; P resides abroad.
The question simply whether or not it is just to order for security for
cost.
2. Porzelack KG v Porzelack (UK) Ltd; likely outcome of the case.
3. Sir Lindsay Parkinson & Co v Triplan; stifle genuine claim, has P’s
impecuniosity caused by D?