Abraham as Tutor for Abraham v St Marks Orthodox Coptic College (No 3)

[2008] NSWSC 1027

CITATION:

Abraham as Tutor for Abraham v St Marks Orthodox Coptic College (No 3) [2008] NSWSC 1027

HEARING DATE(S):

9 May 2008 and subsequent written submissions

JURISDICTION:

Common Law

JUDGMENT OF:

Rothman J

EX TEMPORE JUDGMENT DATE:

22 September 2008

DECISION:

(1) The defendants shall pay interest on any amount paid by the plaintiff, or on his behalf, as costs, provided that:
(a) the costs upon which interest is payable are agreed or allowed on assessment or have been; and
(b) interest is calculated from the date of payment of said costs by the plaintiff and continues only until such time as payment by the defendants of said costs and interest has occurred but not beyond the date upon which the cost assessor’s certificate was entered in this Court.

(2) To the extent necessary, the Court otherwise orders, under s 101(1) of the Civil Procedure Act 2005 and/or s 101(4) of the Civil Procedure Act 2005, that interest shall be payable on the assessment of costs from the date of entry in this Court of the costs assessor’s certificate.

(3) Nothing in the above orders limits interest payable as assessed under the Legal Profession Act 2004, or the capacity of a costs assessor to assess such interest.

CATCHWORDS:	COSTS – interest on costs – two categories could be allowed – interest ordered
LEGISLATION CITED:	Civil Procedure Act 2005 Legal Profession Act 2004
CATEGORY:	Consequential orders
CASES CITED:	Abraham bht Abraham v St Mark's Orthodox Coptic College and Ors [2006] NSWSC 1107
PARTIES:	Nareem Abraham as Tutor for Christopher Abraham (Plaintiff) St Marks Orthodox Coptic College (First Defendant) Coptic Orthodox Church (NSW) Property Trust (Second Defendant)
FILE NUMBER(S):	SC 20186/2002
COUNSEL:	P Connery - Solicitor (Plaintiff) B Hedges - Solicitor (Defendants)
SOLICITORS:	Walker Kissane & Plummer Solicitors (Plaintiff) Curwoods Lawyers (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

ROTHMAN J

22 SEPTEMBER 2008

20186/2002 Nermeen Abraham as Tutor for Christopher Abraham v St Marks Orthodox Coptic College & Anor (No 3)

EX TEMPORE JUDGMENT

1 HIS HONOUR: On 24 October 2006, the Court, as presently constituted, determined liability issues arising out of an accident and injury to the plaintiff, Christopher Abraham, who was nine years of age at the time of the accident (See Abraham bht Abraham v St Mark’s Orthodox Coptic College and Ors [2006] NSWSC 1107, “the liability judgment”).

2 Because of Christopher’s age, the issue of the assessment of damage was delayed pending greater certainty in his prognosis. There had been some skirmishes concerning costs and other matters.

3 The hearing on damages was fixed for hearing for 30 June 2008 before me. On 6 June 2008, the defendants successfully applied for vacation of the dates. Previously, the defendants had raised an issue as to the question of interest on costs, with which issue I now deal. The full details of how this issue arises are either not before the Court or unnecessary to repeat, nor am I inviting the details beyond that which has already been provided to the Court. There were written submissions that were filed and not served, but nothing turns on those aspects.

4 Interest on legal fees may arise in two legitimate ways: First, pursuant to the terms of s 321 of the Legal Profession Act 2004 (“the Act”), a legal practitioner may charge interest on fees that remain unpaid. There are restrictions on the ability to charge interest. Those restrictions require costs agreements, properly drafted bills of costs and the like.

5 Assuming contracting parties agree that interest is payable on any unpaid fees, then the interest calculated in accordance with the contract and the Act is the cost of providing legal services and is subject to the provisions of the Act. In other words, to the extent that interest is permissibly charged by a legal practitioner, either to another legal practitioner or to a client, that interest is subject to assessment under the Act. To the extent agreed or allowed by an assessor, such amount of interest is then payable by any party ordered by the Court to pay costs of the party who ultimately bears the costs of the interest. In these circumstances, there is no need, nor is it appropriate, for the Court to deal especially with the circumstance of the liability to pay interest.

6 Second, a legitimate claim for interest arises in circumstances where a bill of costs has been rendered in permissible terms and the fees have been paid either by the litigant or another practitioner, for example, when a solicitor pays counsel’s fees. In those circumstances, moneys have been expended on a payment of fees that is required to be paid by another party. To the extent that the fees are agreed or assessed as being recoverable, then interest on such a payment recompenses the successful party for the inability to use the money in the meantime.

7 However, because the fees have been paid, or to the extent they have been paid, such interest is not interest charged by the legal practitioner and not, therefore, recoverable before a costs assessor. In those circumstances, it is appropriate that interest on such out-of-pocket expenses be reimbursed and I make that order under s 101(4) of the Civil Procedure Act 2005. Such order cannot go beyond the date upon which the cost assessment is entered and is treated as a judgment of the Court, at which time interest is payable under s 101 of the Civil Procedure Act, if at all.

8 There may be a combination of interest due under the first and second categories above. I do not allow interest that is outside the categories above.

9 The Court makes the following orders:

(1) The defendants shall pay interest on any amount paid by the plaintiff, or on his behalf, as costs, provided that:
(a) the costs upon which interest is payable are agreed or allowed on assessment or have been; and
(b) interest is calculated from the date of payment of said costs by the plaintiff and continues only until such time as payment by the defendants of said costs and interest has occurred but not beyond the date upon which the cost assessor’s certificate was entered in this Court.


(2) To the extent necessary, the Court otherwise orders, under s 101(1) of the Civil Procedure Act 2005 and/or s 101(4) of the Civil Procedure Act 2005, that interest shall be payable on the assessment of costs from the date of entry in this Court of the costs assessor’s certificate.

(3) Nothing in the above orders limits interest payable as assessed under the Legal Profession Act 2004, or the capacity of a costs assessor to assess such interest.

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