One Lilian Nesamalar Alfred ('the deceased') was the vendor of a piece of property held under CT No 7967 Lot 4 Section 87A, Bandar Kuala Lumpur ('the land'), which she sold to one Adli Ariff Development Sdn Bhd ('Adli') through a sale and purchase agreement in writing dated 27 September 1994 ('the agreement').

Under cl 6.03 of the agreement, it is stipulated that the deceased shall be responsible to remove any caveats lodged on the land, and if this was not carried out, Adli shall 'take steps or actions to remove' it. It was further agreed under this same clause that in the event of the latter, 'the vendor [the deceased] shall reimburse the costs and expenses reasonably incurred by the purchaser [Adli]'.

There was a caveat placed on the land. The deceased could not remove it because she passed away, and probate to her estate was, at that material time, not extracted. This led Adli to make an application to remove the caveat, in which they were successful.

Probate to the deceased's estate is now granted to the petitioner, and Adli has made a claim for reimbursement from the deceased's estate for the costs of removing the caveat on the land. Pursuant to s 126 of the Legal Profession Act 1976, the petitioner has filed this application to tax a bill of costs delivered by Adli's solicitors, the respondent, claiming the disbursement. There is no dispute between the parties that the bill of costs is to be taxed, but the only issue is whether it should be based on 'party to party' costs — which the petitioner claims — or on 'solicitor and client' basis as submitted by the respondent.

Party and party cost is 'where a successful party should be indemnified against the necessary expense to which he has been put in prosecuting or defending an action' — 37 Halsbury's Laws (4th Ed) para 745. It is normally awarded to a successful party in a suit. As pointed out by Mr Muker, counsel for the petitioner quoting para 62/28/3 of the 1976 White Book, the principles of party and party cost are stated as:

It is of great importance to litigants who are unsuccessful that they should not be oppressed by having to pay an excessive amount of costs. The costs chargeable under a taxation between the party and party are all that are necessary to enable the adverse party to conduct the litigation, and no more. Any charges merely for conducting litigation more conveniently may be called luxuries, and must be paid by the party incurring them (Smith v Buller (1875) LR 19 Eq 475, per Malins V-C …).

Mr Muker further impressed upon this court that what was agreed in cl 6.03 of the agreement is reimbursement of the 'costs and expenses reasonably incurred', and costs based on party and party costs would adequately and sufficiently fulfil the intention of the parties in the agreement.

Mr Khoo, counsel for the respondent, argued otherwise. He was of the view that solicitor and client costs should prevail. Reimbursement of 'the costs and expenses reasonably incurred by the purchaser' must obviously be in reference to what Adli, the purchaser, has incurred to pay his solicitors to remove the caveat. For this, he likened the situation to that of claim by a mortgagee. To support his contention, he quoted a passage from The Law of Mortgages by Edward Cousins which is as follows:

Costs may be allowed to the mortgagee whether he is a plaintiff or a defendant in the litigation. If his title is impeached by the mortgagor, he is fully entitled to be fully reimbursed, so that if he was successful and received costs in the action, he may still recover the difference between the tax costs and his actual costs.

Solicitor and client costs relates to taxation of a solicitor's bill to his own client, and 'all costs will be allowed except in so far as they are of an unreasonable amount or have been unreasonably incurred' — 37 Halsbury's Laws (4th Ed) at para 747.

Reading cl 6.03 of the agreement in its entirety, one would realize that the purpose and objective of this pr