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How SAT Calculates Costs

When a costs order has been made, the Tribunal also orders the amount of costs which the parties have to pay.

The obligation to minimise costs

Parties are expected to assist the Tribunal in achieving a fair, speedy resolution of the proceeding and at minimal cost to the parties, in accordance with the principles of the Tribunal in section 9 of the SAT Act.

Parties and their representatives should approach proceedings in a manner calculated to minimise costs.  The work performed by a legal representative should be proportionate to the value of the subject matter.  When a costs order is made, any costs for work considered to have been unnecessary or disproportionate are unlikely to be recoverable. 

The Tribunal may order a party’s representative, rather than the party itself, pay for costs incurred if the representative acted in way that resulted in unnecessary costs, or delayed the proceeding. The Tribunal can order these costs are to be paid to any party, including the party who engaged the representative.

Method of determining costs

When the Tribunal makes an order for costs, the amount may be ‘fixed’ or ‘assessed’.

Fixing costs

Costs are fixed when they are easily determined, and the Tribunal does not need to examine the amount of the costs claim in detail. Consequently there is no application fee when costs are fixed.

Assessing costs

If the costs are not fixed, they are ‘Assessed’ in accordance with the SAT Rules. The parties will be given an opportunity to reach agreement about the costs before they are assessed, as assessment of costs is a more structured procedure. A party applies for an assessment, which incurs an application fee and an assessment fee equal to 2.5% of the costs claimed in the application.

To facilitate the Tribunal’s decision, costs applications should be accompanied by itemised lists of the costs being claimed.

Considerations when quantifying costs

The Tribunal takes a 'broad-brush' approach to fixing or assessing costs, generally without descending to a detailed inquiry into individual items of claimed costs.  It will have regard to factors which include the nature of the matter, importance of the matter, its complexity, and the time and effort required to present the party's case.

The Tribunal can make costs orders for legal costs, but also order compensation for expenses, loss, inconvenience or embarrassment resulting from a proceeding or subject matter (section 87(3) SAT Act).

When considering the hourly rates of legal practitioners, the Tribunal's usual practice is to consider the current SAT Costs Determination issued by the Legal Costs Committee. The Determination includes maximum rates applicable to Counsel, Legal Practitioners and Clerks.

In cases where the nature of the matter and its importance to the party warrant it, the Tribunal may decide to refer instead to the Legal Costs Committee’s current Supreme Court (Contentious Business) Determination for guidance.

Whichever determination is used, the Tribunal's order will reflect its view of the reasonable work required in order for the party's case to be fairly presented.

Last updated: 9-Dec-2014

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