Update on McCabes' article " 'Are we there yet' - When are proceedings over for the purposes of enforcement"

The High Court of Australia has refused an application for special leave to appeal the decision of the Full Court of the Federal Court of Australia in Sarks v Cassegrain [2015] FCAFC 38, confirming that a judgment issued by the Court on the basis of filing of a certificate of costs assessment is a "final judgment" for the purposes of s 40(1)(g) of the Bankruptcy Act 1966 (Cth) and can therefore ground a bankruptcy notice.

The High Court decision confirms that costs orders can be enforced through bankruptcy proceedings, and where the orders for an inquiry make a final declaration of the liability of the parties, and do not reserve any power for further judicial consideration on liability, the orders are final orders, and the proceedings have concluded for the purposes of rule 42.7 Uniform Civil Procedure Rules 2005 (NSW) (which provides that interlocutory costs orders are not payable until the proceedings have concluded, unless the court orders otherwise).

Some brief take-home points for clients and practitioners from this case:

  • If there is any question about whether a particular costs order is a costs order for an interlocutory application or other step in the proceedings, the party seeking costs should seek an order that costs be payable forthwith, to avoid an argument by the other party that the costs will not be payable until the conclusion of the proceedings (in accordance with UCPR 42.7)
  • A costs respondent should raise any concerns in relation to whether a costs order is payable during the course of the assessment, before a judgment is entered against it on the basis of filing of a costs assessment.