CHAPTER XIV.

COSTS.

SECT. 1.-Costs of the Reference.

In the case of a submission by consent out of court, unless a contrary intention is expressed therein, "the costs of the reference and award shall be in the discretion of the arbitrators or umpire, who may direct to and by whom and in what manner those costs or any part thereof shall be paid, and may tax or settle the amount of costs to be so paid or any part thereof, and may award costs to be paid as between solicitor and client." (Arbitration Act, 1889, s. 2, sched. 1, cl. (i).)

This applies to a submission made before the Act. (Re Williams and Stepney [1891] 2 Q. B. 257; 60 L. J., Q. B. 635.) It enables the arbitrators and umpire to settle finally the amount of costs to be paid to them, but for this purpose the amount must be stated in, and as part of, the award. (Re Stephens and Liverpool, dc. Insurance Co., 36 Sol. Jour., 464.) If fixed in the award, and the charges are extravagant, possibly the award might be set aside for misconduct. (Re Prebble and Robinson [1892] 2 Q. B. 602; 67 L. T. 267.)

If

not fixed in the award, the arbitrator's charges are liable to taxation.

(Ib.)

CHAP. XIV. Where reference by con

sent out of

court.

(Arbitra- order of court.

An order of reference may be made on such terms as Where by to costs, as the authority making it thinks fit. tion Act, 1889, s. 20.)

Where the whole of an action is referred to an official or special referee, and no provision is made as to costs,

Order silentreferred. action only

CHAP. XIV. he has power to deal with the costs (Order XXXVI., r. 55b), and the same power is conferred on an arbitrator when the action simply is referred to him.

Order silentaction and

other matters referred.

Rule before
Arbitration
Act, 1889,

where order
silent as to
costs.

XXXVI., r. 55c.)

(Order

An order of reference by consent not only of the action, but of other matters in difference, is not made under the Arbitration Act, but derives it validity from the consent of the parties. (Darlington Wagon Co. v. Harding [1891] 1 Q. B. 245; 60 L. J., Q. B. 110.) In such a case, if the order of reference is silent as to costs, but prior to drawing up the order there was a "submission" within the meaning of section 27 of the Arbitration Act, 1889, in the shape of a consent to refer, signed by the parties, their solicitors, or counsel (Aitken v. Batchelor, 62 L. J., Q. B. 193), the arbitrator would appear to have the same power over costs as one acting under a reference by consent out of court. If there is no such "submission" the authority of the arbitrator would appear to be the same as before the Act, when the order of reference was silent as to costs.

Before the Arbitration Act, 1889, where an action was referred, and the order of reference was silent as to costs, there was a distinction as to the power of the arbitrator with respect to the costs of the action and those of the reference, As to the former, the power of awarding costs was necessarily consequent on the authority conferred of determining the action (Roe v. Doe, 2 T. R. 664), for the reason that the costs in the action were matters in difference in the action, though not mentioned in the submission. (Firth v. Robinson, 1 B. & C. 277.) The reason why in references of actions the provision is sometimes inserted that the costs shall abide the event is, that the arbitrator may not have it in his power to withhold costs from the party who is in the right, but it is a restriction of a power which he would otherwise have of allowing costs at his election. (Roe v. Doe, supra.)

But, as to the costs of the reference and award, when CHAP. XIV the order was silent about them, the arbitrator had no power to adjudicate upon them, they being matters not submitted to him, as arising subsequent to the time. of submission; but each party had to bear his own expenses of the reference and half of those of the award. (Taylor v. Gordon, 9 Bing. 570; Bullen v. King, 36 L. T. 732; Candler v. Fuller, Willes, 62; Grove v. Cox, 1 Taunt. 165; Bell v. Belson, 2 Chitt. 157; Bradley v. Tunstow, 1 B. & P. 34.)

"Usual clude discretion of

terms "in

arbitrator

In practice, whether the reference is of the action alone or with other matters, it is usually provided that the costs of the reference shall be in the discretion of the arbitrator, and when an action is referred on "usual terms," this includes, amongst other things, discretion reference. of the arbitrator over the costs of the reference.

(Morel

v. Byrne, 21 W. R. 673; 28 L. T. 627.) The reason why he should have discretion over the costs is, that otherwise there would be nothing to restrain an unprincipled plaintiff from continuing the sittings indefinitely. (Ib., per Blackburn, J.)

over costs of

term

costs."

If an action is referred, and the submission make What inprovision for the "costs," either that they shall be included under the discretion of the arbitrator or abide the event, and there is nothing to limit the generality of the term "costs," it will include costs of the reference and award as well as costs of the cause. (Wood v. O'Kelly, 9 East, 436; Bullen v. King, 36 L. T. 732.) Sometimes by the terms of the submission the costs of the reference are to abide the event of the award, in which case the arbitrator has no power over them, but the party in whose favour the entire event of the award is, will be entitled to them by virtue of the reference. In such a case it is not necessary that the arbitrator should

Where costs abide the

event.

give any specific directions as to costs. It is sufficient, Where action where an action only is referred, if he direct how the only referred.

A.

Q

CHAP. XIV. issues ought to be found, and that is the proper course for him to pursue. (Gore v. Baker, 4 E. & B. 470; 24 L. J., Q. B. 94; Hemsworth v. Brian, 1 C. B. 131; 14 L. J., C. P. 134.) And if the necessary consequence of the finding is, that the action is determined in favour of one of the parties, such party will be entitled to the costs of the reference. (Eardley v. Steer, 2 C. M. & R. 327; Humphrey v. Pearce, 7 Ex. 696; 22 L. J., Ex. 120.) When an action is referred before issue joined, and the costs of the reference and of the award are to abide the event, this means the event of the award generally without relation to the issues. (Kelcey v. Stupples, 32 L. J., Ex. 6; 1 H. & C. 576.)

Where action and other differences referred.

When an action and counterclaim are referred, and the award on the counterclaim exceeds the amount awarded in the action, the "event" is in favour of the defendant so far as concerns the cost of reference and award. v. Campbell, 14 Q. B. D. 821; 54 L. J., Q. B. 281.)

(Lund

If not only an action but other matters in difference are referred, under a submission providing that costs shall abide the event, should the award be in favour of the same party as to both, he will be entitled to the costs of the action and also of the reference. Should the action be determined by the award in favour of one, and the matters in difference be given for the other, the former will be entitled to the costs of the action, and the latter to the costs of the reference as to the matters upon which he has succeeded. (Hawke v. Brear, 14 Q. B. D. 841; 54 L. J., Q. B. 315.) The former rule, in such a case, was that there were no costs of the reference on either side. (Gribble v. Buchanan, 18 C. B. 691; 26 L. J., C. P. 24.)

In a reference of accounts, including accounts for which an action is brought, the party in whose favour the balance is found is entitled to the costs which abide the event. (Hemsworth v. Brian, 1 C. B. 131; 14 L. J., Where a cause and all matters in difference

C. P. 134.)

were referred by an order of nisi prius, which provided CHAP. XIV. that the costs of the reference and award should abide the event of the award, and the arbitrator decided the cause in favour of the defendant, and with respect to the matters in difference awarded that the plaintiff had a valid claim against the defendant, and that the defendant had a valid claim against the plaintiff of larger amount, and directed the plaintiff to pay the difference to the defendant the claims were unliquidated and could not have been set off against one another in an action: it was held that the event of the reference was wholly in the defendant's favour, and that he was therefore entitled to the costs of the reference and award.

L. R., 3 C. P. 36; 37 L. J., C. P. 32.)

(Dunhill v. Ford,

Where the arbi

trator awarded that on the doing of certain things on both sides the action should cease, the court held that the event of the award was that each party should pay his own costs. (Yates v. Knight, 2 Bing. N. C. 277.)

When the costs of the action only are to abide the event, and the costs of the reference are in the discretion of the arbitrator, the arbitrator may award as he pleases with respect to the latter, notwithstanding the provisions of the County Courts Act, 1888, may deprive the plaintiff of his costs of the action. (Post, pp. 233, 236.)

Costs in discretion of

arbitrator.

costs of the reference.

The expenses incurred by the parties of the whole What are inquiry before the arbitrator, whether in respect of matters in an action or matters out of it, are costs of the reference.

In a reference by consent out of court, the costs of negotiating and settling the terms of the submission are costs of the reference. (Re Autothreptic Steam Boiler Co., 21 Q. B. D. 182; 57 L. J., Q. B. 488.) The costs of a special case stated by the arbitrator are primâ facie costs of the reference (Re Knight and Tabernacle Permanent Building Society [1892] 2 Q. B. 613, 620; Re Holliday and Corporation of Wakefield, 20 Q. B. D. 699;