31 March 2025
Case Summary: Privilege and Fairness in Costs Assessments | Thompson v Cavalier King Charles Spaniel Rescue (Qld) Inc [2024] QSC 197.
Written by David Chen
In the recent decision of Thompson v Cavalier King Charles Spaniel Rescue (Qld) Inc [2024] QSC 197, Justice Muir confirmed the views of the High Court of Australia in Giannarelli v Wraith (No 2) (1991) 171 CLR 592 in relation to how privilege is dealt with in the context of a costs assessment process.
In her judgment, Justice Muir found that if a party having its costs assessed elects to disclose privilege documents to a costs assessor, then these documents must also be provided to the party liable to pay those costs.
If this party exercises its right to non-disclosure of privileged documents, the costs assessor will have to decide any contested items on the material before him, without drawing any adverse inferences from the failure and/or refusal to produce these documents due to privilege.
Despite section 79 of the Civil Proceedings Act 2011 (Qld), which provides privilege continue despite disclosure to a costs assessor, Muir J reached this conclusion noting that “the preservation of both confidentiality and legal professional privilege in cases where documents have been provided to the costs assessor is crucial to the principles of procedural fairness”.[1]
In support of her decision, her Honour made reference to rule 720(2)(b) of the Uniform Civil Procedure Rules 1999 (Qld) which requires that the procedure adopted by the costs assessor must be consistent with the principles of natural justice.
Finally, her Honour concluded at paragraph 21 of her decision that “the outcome may be imperfect but the rules of natural justice triumph” and found that unless there is an informal agreement between the parties then the principles of natural justice prevail and a party is entitled to see what the other is using as the basis for their claims for costs.
Therefore, practitioners should be aware and consider the context of the costs order against the rights to claim costs. Ask yourself the following questions:
- Is it an interlocutory order or is the entire the proceeding finalised?
- Can a claim for cost be proved other than by producing the privilege document?
[1] At paragraph 12.