Duhaime's Law Dictionary


Taxation of Costs Definition:

The formal quasi-judicial review of a bill of costs or other determination of costs payable by one litigant to another.

Related Terms: Costs, Bill of Costs

Costs follow the event; the losing litigant pays costs to the successful litigant - not their lawyer's bill but usually a portion only calculated by reference to a scale or some chart based upon complexity and a reasonable amount of hours per step taken in the litigation. The successful party presents a proposal of costs to the unsuccessful - often called a bill of costs and if approved, negotiated or otherwise settled, the costs are a done deal. But if not, the costs must be reviewed by the Court, an administrative function many courts refer to a lower court, for example a registrar. The registrar hears arguments for and against the proposed bill of costs. The process of detailed review of a costs proposal is called taxation - or taxation of costs to distinguish it from the concept of income tax.

In Uram v Uram, Justice Huddart adopted these words to define taxation of costs:

"... the process of ascertaining and charging up the amount of costs in an action to which a party is legally entitled, or which are legally chargeable....

"The usual reason for taxing a bill of costs is to obtain the right to execute for costs to which the party is already entitled. Taxation is the process of ascertaining the specific amount."

Further, the helpful words of Justice Meredith in Flexlume:

"In all taxations of costs it should be borne in mind that allowances are to be made only for services actually performed, fees actually earned, and outlays actually incurred, all within the limitations which the tariff contains; that nothing is to be allowed for imaginary services, or services which might have been but were not performed "

REFERENCES:

  • Flexlume Sign Co. v. Globe Securities Co., 47 D.L.R. 23 (1918)
  • People v Tweed, 63 N.Y. 202 (1875)
  • Uram v. Uram, 66 B.C.L.R. 236 (BCSC, 1985)

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