Cheshire v Jennings (No 3) - [2021] SASCFC 21

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
CHESHIRE & ANOR v JENNINGS & ANOR (No 3)
[2021] SASCFC 21
Judgment of The Full Court
(The Honourable Justice Peek, the Honourable Justice Doyle and the Honourable Justice Livesey)
6 April 2021

APPEAL AND NEW TRIAL - PROCEDURE - SOUTH AUSTRALIA - POWERS OF COURT - COSTS
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS
On 19 February 2021, orders were made by the Full Court allowing the appeal, avoiding the contract between the parties and ordering that the unsuccessful respondents repay the deposit, together with any entitlement to interest, to the appellants. Submissions on costs were received in writing.
The appellants contended that any order made on appeal after the commencement of the Uniform Civil Rules 2020 (SA) comes within r 1.4(1) of those rules, with the result that those rules now apply to the appeal. Accordingly, they submit that the costs of the appeal should be determined in the ordinary way under the Uniform Civil Rules 2020 (SA) and in the discretion of the Court. The appellants appeared to have calculated interest in accordance with r 182.3 of the Uniform Civil Rules 2020 (SA).
The respondents contended that the Fast Track Rules 2014 (SA) apply to both the costs of the trial and the appeal. As for interest, the respondents accept that r 182.3 of the Uniform Civil Rules 2020 (SA) applies to the period after 18 May 2020, but before that date, at the rate specified by r 208 of the Supreme Court Civil Supplementary Rules 2014 (SA).
Held, ordering that the respondents pay the appellants’ costs of both the trial and the appeal:
1. It is not necessary to express a concluded view as to whether the issue of costs should be governed by the new rules or the former rules because the same result would be reached under each.
2. While it is true that determination of the appeal involved one issue of some novelty, none of the points raised on appeal were sufficiently complex or difficult to displace the basis on which the parties had conducted the litigation. Accordingly, the Fast Track Rules 2014 (SA) apply to the costs of the appeal.
3. By reason of r 40(2) of the Fast Track Rules 2014 (SA), and the respondents’ concession that the matter falls within the “high” category of the Fast Track Appeal Scale, the costs of the appeal are fixed in the sum of $6,000.00 in addition to any reasonable disbursements, apart from counsel fees, recoverable in accordance with clause 4 of Schedule 1 to the Fast Track Supplementary Rules 2014 (SA).
4. Interest is to be calculated at the specified rate of 5 per cent from the 18 May 2020 commencement of the Uniform Civil Rules 2020 (SA). Interest accruing before this date should be determined in accordance with the Supreme Court Rules 2014 (SA) and the accompanying supplementary rules.
Uniform Civil Rules 2020 (SA) rr 1.4(1), 182.3 ; Supreme Court Civil Supplementary Rules 2014 (SA) r 208; Fast Track Rules 2014 (SA) r 40(2); Fast Track Supplementary Rules 2014 (SA) cl. 4 of Sch 1, referred to.
Duncan as Liquidator of WDR Iron Ore Pty Ltd (In Liq) v SMA Industries Pty Ltd (No 2) [2020] SASC 127, considered.

CHESHIRE & ANOR v JENNINGS & ANOR (No 3)
[2021] SASCFC 21

Full Court: Peek, Doyle and Livesey JJ

THE COURT: On 19 February 2021, orders were made by the Full Court allowing the appeal, avoiding the contract between the parties and ordering that the unsuccessful defendants repay the deposit, together with any entitlement to interest, to the plaintiffs.
Submissions on interest and costs were received in writing.
The Fact Track Stream
Before addressing the contentions of the parties, it is first appropriate to note some of the procedural history.
When these proceedings were commenced on 28 February 2019 the plaintiffs (the appellants) elected to proceed in the “Fast Track Stream” with the result that the Fast Track Rules 2014 (SA) and the Fast Track Supplementary Rules 2014 (SA) applied to the action.
The trial was heard in the District Court commencing 15 April and, by judgment delivered on 20 June 2019, the plaintiffs’ claim was dismissed. After submissions were made on 27 June 2019, the District Court Judge awarded costs to the defendants (the respondents) in accordance with the Fast Track Supplementary Rules 2014 (SA), together with any disbursements recoverable in accordance with those rules.
An appeal was commenced on 10 July 2019 and heard by the Full Court on 9 April 2020. Judgment was delivered after the Uniform Civil Rules 2020 (SA) commenced on 18 May 2020.
The submissions made by the parties
The appellants contend that any order made on appeal after the commencement of the Uniform Civil Rules 2020 (SA) (Uniform Civil Rules) comes within r 1.4(1) of those rules, with the result that those rules now apply. Accordingly, the appellants contend that the Fast Track Rules 2014 (SA) apply to the costs of the trial but not to the costs of the appeal. They submit that the costs of the appeal should be determined in the ordinary way under the Uniform Civil Rules and in the discretion of the Court.
No specific submissions were made as to the rules applicable to the calculation of pre-judgment interest. The schedule provided by the appellants suggests that they have applied r 182.3 of the Uniform Civil Rules throughout the relevant period from 4 February 2019 through to the date of judgment. By that rule, pre-judgment interest is to be calculated at the rate of 5 per cent per annum “in respect of a period from the commencement date onwards or if the Court thinks fit any earlier period”. The “commencement date” is defined as the date those rules commenced, being 18 May 2020. However, rather than simply applying the flat rate of 5 per cent referred to in that rule, the appellants appear to have added that rate to the cash rate of interest set by the Reserve Bank of Australia from time to time.
The respondents, on the other hand, contend that the Fast Track Rules 2014 (SA) continue to apply. They say that r 1.4(1) of the Uniform Civil Rules 2020 (SA) does not apply to the costs of the appeal and they refer to authority.[1] Accordingly, the respondents submit that the Fast Track Rules 2014 (SA) apply to the costs of both the trial and of the appeal.
[1] Duncan as Liquidator of WDR Iron Ore Pty Ltd (In Liq) v SMA Industries Pty Ltd (No 2) [2020] SASC 127 (Blue J).
As for interest, the respondents accept that r 182.3 of the Uniform Civil Rules applies to the period after 18 May 2020. They calculate interest at the rate of 5 per cent from 18 May 2020, and before that date at the rate specified by r 208 of the Supreme Court Civil Supplementary Rules 2014 (SA) (being the cash rate plus 4 per cent).
The appellants’ interest calculation is $7,492.14, whereas the respondents’ interest calculation is $6,601.63.
The issue of costs
The first question is whether the Uniform Civil Rules apply to this appeal, given that it was argued at a time when the Supreme Court Civil Rules 2006 (SA) applied.
Rule 1.4(1) of the Uniform Civil Rules 2020 (SA) provides:
(1) Unless the Court otherwise orders—
(a) these Rules apply to—
(i) a proceeding commenced; and
(ii) a step in a proceeding taken,
on or after the commencement date; and
(b) the Previous Rules continue to govern a step in a proceeding taken
before the commencement date.
The question in this case, then, is whether one can identify any “step in a proceeding” taken after 18 May 2020. The term “step” is defined as follows:
Step in a proceeding or appellate proceeding includes a document filed, process issued, action taken or order made in the proceeding …
On one view, any order made in an appellate proceeding after the commencement of the Uniform Civil Rules is “a step in a proceeding taken” with the result that the Uniform Civil Rules apply to that step. On this view, as the orders of this Court on 22 February 2021 were made long after the new rules commenced, and as any order concerning interest and costs will be made after the new rules commenced to operate, those rules would apply.
Against this conclusion, the respondents submit that in Duncan (as Liquidator of WDR Iron Ore Pty Ltd) (In Liq) v SMA Industries Pty Ltd (No 2) the Judge noted, in a footnote, that costs determined after the commencement of the new rules were “governed by the former rules because the offer was made and the trial was completed during the operation of those rules”. The Judge did not specifically consider the operation or effect of r 1.4(1) of the Uniform Civil Rules 2020 (SA). However, it would appear that his Honour’s approach was predicated upon a view that the relevant step(s) for the purposes of r 1.4(1) was not the making of the costs order, but rather the making of the offer, and the hearing of the trial in respect of which the relevant costs were incurred. By analogy, it might be said in the present case that the relevant step was the hearing of the appeal in respect of which the relevant costs were incurred, with the result that the issue of costs is not governed by the Uniform Civil Rules.
It is not necessary to express a concluded view as to whether the issue of costs should be governed by the new rules or the former rules. That is because we would reach the same result under either set of rules.
Under the former rules, the starting point would be that the Fast Track Rules 2014 (SA) and the Fast Track Supplementary Rules 2014 (SA) apply to the costs of trial and of the appeal. Under the new rules, the starting point is that they are in the discretion of the Court unless this Court “otherwise orders”. In our view, this is a case in which it would be appropriate to “otherwise order” that the Fast Track Rules 2014 (SA) apply to the determination of costs. That would be consistent, we think, with the bases upon which the appellants commenced the proceeding and the parties have conducted that proceeding.
In opposition to that approach, the appellants contend that this Court “should not otherwise order because the appeal was dealt with as an ordinary appeal, and because of the complexity and novelty in the appeal points”. It is true that the determination of the appeal involved some novelty, particularly concerning the proper meaning of the term “environmental assessment” in the Form 1. However, none of the points raised on appeal were sufficiently complex or difficult to displace the basis upon which this litigation has generally been conducted by the parties. It should be recalled that, however important the issues were to these parties, they were effectively battling over the fate of a $65,000.00 deposit.
Assuming that the Fast Track Rules 2014 (SA) apply, then by reason of r 40(2) of those rules, the “costs awarded in respect of an appeal against a final judgment will be a fixed sum in accordance with the Fast Track Appeal Scale”. That Scale specifies three amounts, depending on whether the matter is determined to fall within the “low”, “mid” or “high” categories. The respondents concede that this matter comes within the “high” category and that the award of costs for the appeal should be the fixed sum specified of $6,000.00. That is in addition to any reasonable disbursements, apart from counsel fees, recoverable in accordance with clause 4 of Schedule 1 to the Fast Track Supplementary Rules 2014 (SA).
In the circumstances, the appellants will have their costs of the appeal in the amount of $6,000.00, together with such disbursements, apart from counsel fees, as the Fast Track Supplementary Rules 2014 (SA) permit.
As the appeal was allowed, it is also necessary to make an order in favour of the appellants concerning the costs of the trial. For the reasons already given, those costs must be based on the Fast Track Rules 2014 (SA) and the Fast Track Supplementary Rules 2014 (SA).
Pre-judgment interest
If the new rules apply to the issue of interest (as both parties accept), then subject to the Court’s discretion, interest is to be calculated at the specified rate of 5 per cent from the 18 May 2020 commencement of the Uniform Civil Rules 2020. In our view, interest accruing prior to this date should be determined in accordance with the former rules. Under the former rules, pre-judgment interest is determined by r 208 of the Supreme Court Civil Supplementary Rules 2014 (SA), which provides for interest in the amount of the cash rate plus 4 per cent.
That is the basis upon which the respondents have calculated interest and we see no reason to reject that approach. Accordingly, an amount will be awarded in respect of interest in the sum of $6,601.65.
Conclusion
We would order as follows:
1.The respondents are to pay the appellants pre-judgment interest in the amount of $6,600.00.
2.Set aside the costs orders of the District Court Judge, and order in lieu thereof that the respondents are to pay the appellants their costs of the trial pursuant to the Fast Track Rules 2014 (SA) and the Fast Track Supplementary Rules 2014 (SA).
3.The respondents are to pay the appellants their costs of the appeal in the amount of $6,000.00 together with reasonable disbursements (except counsel fees) in accordance with clause 4 of Schedule 1 of the Fast Track Supplementary Rules 2014 (SA).