Davies v Ku-ring-gai Municipal Council

In the case of Davies v Ku-ring-gai Municipal Council, the respondent, Ku-ring-gai Municipal Council, sought to appeal a decision made by the Supreme Court of New South Wales in the Equity Division. The appellant, Davies, had initially filed a claim against the council, and the matter was settled with the council paying the appellant's costs, along with interest on those costs. The council's argument was that the interest on costs was not payable as a matter of course and should not have been awarded unless specifically ordered by the court. This disagreement led to the council's appeal, questioning the appropriateness of the interest on costs being included in the final order.

The primary legal issue before the court was whether, in cases where a party has demonstrated that they have paid costs to their solicitor, an order for interest on those costs under section 95(4) should be made as a matter of course in the Equity Division. The court had to determine the circumstances under which interest on costs should be awarded and whether the requirement of a specific order by the court was necessary, or if it could be deemed to be included as part of the costs when the party had already paid interest to their solicitor.

The court held that in cases where a party has already paid interest on costs to their solicitor, the court should make an order for interest on costs as a matter of course. This means that once it is established that a party has paid interest to their solicitor, the court should automatically include this in the final order without the need for a separate specific order. The court reasoned that this approach aligns with the principle that costs should follow the event, and if the party has already discharged the obligation to pay interest, it should be reflected in the final order. The court further noted that the absence of a specific order for interest on costs does not negate the fact that the interest has already been paid by the party.

As a result of this reasoning, the appeal by the council was dismissed, and the order for interest on costs, as already paid by the appellant, was upheld. This decision clarifies that where a party has paid interest on costs to their solicitor, the interest is to be included in the final order without requiring a specific order from the court, thereby affirming the principle that costs should follow the event.