Fingal Pastoral Pty Ltd v Page Seager Lawyers (No 3)

[2020] TASSC 62

[2020] TASSC 62

CITATION:	Fingal Pastoral Pty Ltd v Page Seager Lawyers (No 3) [2020] TASSC 62
PARTIES:	FINGAL PASTORAL PTY LTD
v
PAGE SEAGER LAWYERS (A FIRM)
FILE NO:	922/2014
DELIVERED ON:	21 December 2020
DELIVERED AT:	Launceston
HEARING DATE:	By written submissions
JUDGMENT OF:	Pearce J
CATCHWORDS:

Procedure – Civil proceedings in State and Territory courts – Costs – Interest on costs – Date from which

interest runs.

Supreme Court Civil Procedure Act 1932 (Tas), ss 164, 165.
The Board of Management of the Agricultural Bank v Brown [1958] Tas SR 22; Langmaid v Dobsons
Vegetable Machinery Pty Ltd (No 2) [2014] TASSC 55; Mercer v Allianz Australia Insurance Limited (No 4)
[2015] TASSC 2, followed.

Aust Dig Procedure [1730]

REPRESENTATION:

Counsel:

Plaintiff:	K A Loxley
Defendant:	S B McElwaine SC

Solicitors:

Plaintiff:	Shields Heritage
Defendant:	Shaun McElwaine + Associates

Judgment Number:	[2020] TASSC 62
Number of paragraphs:	21

Serial No 62/2020 File No 922/2014

FINGAL PASTORAL PTY LTD (ACN 009 478 817)

v PAGE SEAGER LAWYERS (A FIRM) (ABN 37 078 672 294) (No 3)

REASONS FOR JUDGMENT PEARCE J
21 December 2020

1             The issue for determination in this decision is the date from which interest on an award of costs should run. In the action the plaintiff claimed damages from the defendant, a firm of solicitors, for breach of contract, negligence and misleading or deceptive conduct in the provision of legal advice. The action proceeded to trial. Judgment was reserved on 14 December 2018. On 19 December 2019 I found that the plaintiff's action against the defendant failed: Fingal Pastoral Pty Ltd v Page Seager Lawyers [2019] TASSC 48. I dismissed the action and ordered that there be judgment for the defendant. Disputes arose about the defendant's entitlement to costs. On 6 August 2020 I published reasons indicating that I would order that, subject to limited exceptions, the plaintiff is to pay the defendant's costs of the action on a party and party basis: Fingal Pastoral Pty Ltd v Page Seager Lawyers (No 2) [2020] TASSC 40. No costs order has yet been made. The defendant had sought an order that I determine the costs rather than order that the costs be taxed. At the request of the parties that application was not determined, and the issue has not yet been resolved or agreed. In the meantime, the disputed issue of the entitlement to interest on the inevitable costs award has arisen. Because a formal costs order is yet to be made, a formal ruling on the question might be somewhat premature. However I am prepared to proceed in the interests of facilitating agreement on the costs issues which remain outstanding between the parties.

2             The defendant claims an entitlement to interest on the amount of the costs, once determined, from the day judgment in the action was reserved. The plaintiff contends that the entitlement to interest commences only on the day the amount of costs is determined, or alternatively on the day a costs order is made, or at the earliest on the date on which judgment was entered for the defendant.

3            I will first deal with the plaintiff's argument that interest on costs should run only from when the costs are formally ordered or determined. The Supreme Court Civil Procedure Act 1932, s 164, refers to the effect and enforceability of judgments and orders "whereby any sum of money, including any costs, charges, or expenses, shall be recovered by or shall be payable to any person". Section 165 provides:

"Every such judgment and order as is mentioned in section 164(1) shall carry interest at the rate of 5 per centum per annum, or such other rate as may be prescribed by the Rules of Court, from the time of the trial or inquiry, or, if there has been no trial or inquiry, from the time of signing or entering up judgment; and the amount of such interest shall be stated in the body of, and may be levied under, a writ of execution on such judgment." [Emphasis added.]

4 The plaintiff contends that the judgment ordered for the defendant on 19 December 2019 is not a judgment of the kind referred to in s 164 because it does not entitle the defendant to any sum of money. Alternatively, the plaintiff contends that the time of "trial or inquiry", when considering costs, refers to the process of taxing or otherwise determining the costs, with the result that interest commences to run only when costs are determined. In my opinion the argument that the terms of s 164 disentitle the defendant to interest on a costs order when made, from the time of judgment should be rejected as contrary to the terms of the legislation and to authority. The terms of s 164 distinguish between judgments and orders, but, in each case, provide for the payment of interest from either the time of trial or inquiry, or from the time of signing or entering up judgment. There is ample authority for the proposition that interest is payable on costs, once determined, from judgment in the action.

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5             In Craine v Colonial Mutual Fire Insurance Co Ltd [1923] VLR 623 judgment was entered for a defendant in the Supreme Court of Victoria. On appeal, the High Court ordered judgment for the plaintiffs. Schutt J canvassed the issue of whether, where there is an appeal, interest was to run from the date of the original judgment or the date of the judgment of the appellate court. However, in the course of his Honour's reasons he said at 627-628:

"… the next question to be considered is whether interest on costs for any and what period and at what rate is payable as upon a judgment entered in the Supreme Court for amounts awarded and for such costs as were ultimately found to be payable. As to this sec 181 of the Supreme Court Act provides for payment of interest on every judgment debt at 8 per cent. per annum from the time of the trial or inquiry; or, if there has been no trial or inquiry, from the time of entering up judgment, and that the amount of such interest shall be stated in the body of and may be levied under a writ of execution on such judgment. This section is based upon, although not identical with, sec 17 of the English Act, 1 & 2 Vict, c 110, which makes interest payable on judgment debts from the time of entering up judgment, and, whatever doubt there might be as to whether such a provision includes interest on costs has been completely dispelled by the authorities: See Fisher v Dudding [1841] 9 Dow 872, Pitcher v Roberts [1845] 2 Dow (N S) 394, Newton v The Grand Junction Railway Co [1846] 16 M & W 139."

6            Schutt J also referred to Schroeder v Clough [1887] 35 LT(N S) 850 as authority to the contrary, before citing Pyman & Co v Burt [1884] WN 100, Landowners' etc, v Ashford [1884] 33 WR 41, Boswell v Coaks [1887] 36 WR 65 and Taylor v Roe [1984] 1 Ch 413 as authority for the conclusion that there can "therefore be no doubt, I think, that interest on costs ordered to be paid by a judgment of this Court runs, in the absence of any special provision, from the date of the judgment".

7             In Pyman v Burt, the plaintiff recovered a judgment against the defendant, and under the judgment they were entitled to costs. The right to recover interest on costs ordered to be paid was given by the 1 & 2 Vict c 110, ss 17, 18 and 20. It was determined that in the absence of any special order, no distinction is made between interest on the debt and interest on the costs, and that both begin to run from the day of the judgment. Boswell v Coaks was a case in which an action was dismissed with costs. The trial judge determined that interest on costs ran from the date of judgment. Again, 1 & 2 Vict c 110, ss 17, 18 and 20 applied. The Court of Appeal dismissed the appeal.

8             The authorities considered and applied in Craine were, along with conflicting subsequent authority, considered in detail by the House of Lords in Hunt v R M Douglas Roofing Ltd [1990] 1 AC 398. The principal speech was that of Lord Ackner. The sole issue was whether s 17 of the Judgments Act 1838 (UK) meant that interest on costs to be paid by one party to another should run from the date on which judgment is pronounced or from the date on which the taxation of costs is completed by issue of a taxing certificate. Section 17 provided that every judgment debt, which by s 18 included costs, carried interest "from the time judgment was entered up". The terms of the 1838 Act are in similar, though not identical terms, to ss 164 and 165 of the Supreme Court Civil Procedure Act. In Hunt, the date of judgment was taken to be when a personal injuries action was settled by consent, and the action stayed with an order for costs. His Lordship reviewed the history of the legislative provisions, concluded that Pyman v Burt and Boswell's case were correctly decided, thereby overruling the decision of Lord Denning in K v K [1997] Fam 39, 2 WLR 55, and found that interest on the costs of the action ran from the date of judgment. In that case, that meant the date on which the action was stayed. The rationale for the conclusion is explained at 415-416, in summary, that justice requires that the unsuccessful party should pay interest on costs for an action which should not have been brought or resisted, and in respect to which it is most likely that the successful party has already had to pay the barristers, solicitors and expert witnesses. Moreover, an inability to recover interest on costs from the determination of the action or proceeding encourages delay in agreement or determination of the costs.

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9            The decision in Hunt was subsequently affirmed in Thomas v Bunn [1991] 1 AC 362. In that case, at 379 Lord Ackner stated:

"… it is accepted on all sides that Hunt's case establishes, and rightly establishes, that the liability to pay interest on costs does not have to await the quantification of those costs, but dates back to the date of the judgment awarding costs."

10           The reference in Thomas v Bunn to the date of judgment awarding costs should not be taken to confine the defendant's entitlement to costs in this case. A proper reading of the cases concerning the entitlement to interest makes clear, by application of the underlying rationale for the principle, that it is the determination of the action which is the operative date, and not the date of the costs award. In many cases the date will be the same, although not always. Both Hunt and Thomas v Bunn were followed by the New South Wales Court of Appeal in Minister Administering the Environmental Planning and Assessment Act 1979 v Carson (1994) 35 NSWLR 342, although that case concerned legislation in different terms to the Tasmanian provisions. It concerned a decision of the Land and Environment Court. The applicable legislation provided for the payment of interest on money payable pursuant to an order of the Court from the time the order "took effect". The Court of Appeal determined that interest payable on a costs order ran from the time the order was made, not when the costs were determined. However the Court of Appeal, particularly Young AJA, took the opportunity to consider the history of the position taken by various English courts to the meaning of "entering up judgment". Courts of common law and equity took differing approaches depending on the procedure of each court.

11           These principles have been applied in Tasmania. In The Board of Management of the Agricultural Bank v Brown [1958] Tas SR 22 Gibson J, citing Craine v Colonial Mutual Fire Insurance Co Ltd (above), concluded that the "time of the trial" referred to in s 165 means the date when judgment is delivered. His Honour said that the action was concluded before him when he gave the judgment appealed from. That decision was applied by Porter J in Potts v Frost (No 2) [2012] TASSC 32 at [21]. Section 165 was also considered by Tennent J in Langmaid v Dobsons Vegetable Machinery Pty Ltd (No 2) [2014] TASSC 55. The situation in that case was that her Honour had, at first, dismissed the plaintiff's claim for damages. Following a successful appeal the action was returned for assessment of damages. The question before her Honour was from when interest on the judgment sum should run. Counsel for the plaintiff sought interest from when judgment in the action was reserved. Her Honour, citing the Agricultural Bank case and Potts, determined that interest should run from the day following her original judgment. The Tasmanian cases concern interest on a judgment sum, but the line of authority from which the principles derive concern interest on costs, and none of the cases in that line of authority draw any distinction between the principles to be applied to judgment sums as opposed to costs. It has long been established that the legislation applies to costs: Thomas v Bunn.

12   For the foregoing reasons, in my opinion, interest on costs should run from at least the date of

judgment in the action.

13           The remaining issue for determination is the defendant's contention that interest should run from the date on which judgment was reserved. The issue was considered by Blow CJ in Mercer v Allianz Australia Insurance Limited (No 4) [2015] TASSC 2. His Honour referred to the following passage from the judgment of Schutt J in Craine at 629, Schutt J:

"I think interest was properly claimed under sec 181 of the Supreme Court Act at the rate of 8 per cent, and, further, that it was properly claimed as from the date of the order of the High Court. It may be that it was claimable as from the date of the original Supreme Court judgment, or it may be that it was claimable even from the time of the original trial of the action, having regard to the difference in the language of sec 181 of our Act and that of sec 17 of the English Statute 1 & 2 Vict, c 110, which does not refer to the time of trial. But whatever may be the true view as to

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these matters, it seems to me clear that the plaintiff was well within his rights in
demanding interest at the rate and from the period specified in the writ ...".

14           Blow CJ noted that the English statute referred to by Schutt J did not refer to the "time of trial." Blow CJ also pointed out that, in The Board of Management of the Agricultural Bank v Brown, Gibson J did not expressly address when interest runs in a case where judgment is reserved upon the conclusion of a trial, although Blow CJ established that the judgment in that case was in fact reserved. To my mind, having reserved his decision, Gibson J then impliedly addressed the issue by stating that "[t]he action was concluded before me when I gave the judgment appealed from on 21 June 1956."

15   In Mercer, at [18], Blow CJ continued:

"If this were a novel point, I might well conclude that 'the time of trial' for the purposes of s 165 is the time when judgment is reserved at the end of a trial – in this case 7 October 2014. However, because of the principle of judicial comity, I think I should follow the decisions of Gibson J and Tennent J, and interpret 'the time of trial' as referring to the date on which the action is determined. A major advantage of that interpretation is that it ordinarily results in post-judgment interest running from the day as at which any damages for continuing losses are assessed."

16 I agree with the conclusion applied by Blow CJ and also follow the decisions of Gibson J and Tennent J. I would do so not only from judicial comity, but also because I am satisfied that they are correct. I think that a finding that the "time of trial" means the date from which judgment is reserved is a recipe for uncertainty. Of course, s 165 refers to both the "time of trial or inquiry" and the "time of signing or entering up judgment" and meaning must be attributed to all of the words of the section. The different terms are explained, however, by reference to the potential for difference between the date of verdict and judgment and in the historical analysis conducted by Young AJA in Minister Administering the Environmental Planning and Assessment Act 1979 v Carson (above) when considering the meaning of "entering up judgment". The Rules of the Supreme Court which came into operation on the commencement of the Supreme Court Civil Procedure Act on 1 January 1934, as Schedule 2 to that Act, reflect the distinction and allow for the entry of judgment, by order or direction, to post-date the day on which judgment is pronounced, or to be on the day on which the "requisite documents are left with the proper officer for the purpose of entry": Order XLIII, rr 4-6. The difference is also reflected in the current Supreme Court Rules 2000, r 573, which provides:

"573 Entry of judgment after trial

(1) At or after the trial, the judge may –

(a)	direct that any appropriate judgment be entered; or
(b)	adjourn the case for further consideration; or
(c)	give leave to any party to apply for judgment.

17           The distinction between the "time of trial or inquiry" and the "time of signing or entering up judgment" may also arise in the case of successful appeals. Mercer is an example. The distinction was referred to in Craine, and also arose in Nicol v Allyacht Spars Pty Ltd (1998) 165 CLR 313.

18 I was not referred to any case which found, in support of the defendant's contention, that the reference in s 165 to the "time of trial or inquiry" means the date on which judgment in a contested action was reserved. Counsel for the defendant contends that the decision of the Full Court in Quarmby v Oakley [2015] TASFC 11 is authority for that proposition. The submission should be rejected. Dr Quarmby brought an action against the defendants for damages for assault and trespass. The action was heard in February and March 2011. On 3 May 2011 the trial judge ordered that the claims be dismissed with costs. The costs were taxed and a certificate of taxation was issued on 20 September 2012. The defendants filed caveats on the title to land owned by the plaintiff as judgment creditors in respect to the costs, and sought to recover the sum outstanding by writ of fi fa which

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claimed interest on the total amount of the taxing certificate from 3 May 2011. The plaintiff then sought to bring an action, commenced by writ, against the defendants for damages for wrongful lodgement of the caveats. He contended, amongst other things, that lodgement of the caveats was unreasonable and an abuse of process. He also disputed the claim for interest. The statement of claim was struck out by Holt AsJ as not disclosing any case for relief which had a prospect of success at trial. In the course of his Honour's ex tempore reasons, when addressing the plaintiff's contentions about interest, he stated:

"Thirdly, the plaintiff alleges in his statement that the taxing officer awarded about $18,000 for the costs of the taxation and for the taxing fee. The plaintiff claims that interest was not payable on this amount from the date of the trial.

Section 165 of the Supreme Court Civil Procedure Act 1932 relevantly provides that every judgment or order carries interest from the time of the trial and that the interest is to be stated in the body of and levied under a writ of execution on such judgment. Section 164 makes it clear that costs orders are encompassed within the orders to which s165 applies. Where costs are awarded the costs carry interest from the date of the trial, even though they are yet to be quantified. See Minister Administering the Environmental Planning and Assessment Act 1979 v Carson (1994) 35 NSWLR 342.

The costs of the taxation are encompassed in the Court's order for the payment of costs. The Rules of Court only confer a discretion as to the awarding of the costs of the taxation on the taxing officer in the event that the bill submitted is reduced by one-sixth or more. Section 165 is mandatory in its operation and its effect is well established as set out in Carson. The plaintiff has not put forward any legal argument, even in skeletal form, which might be canvassed at trial contrary to the position that interest is payable on the whole of the amount stated in the certificate of taxation from the time of the trial."

19           In Quarmby, there was no claim in the caveats or in the execution proceedings for interest on any part of the sum claimed for costs prior to the date of judgment in the unsuccessful action. Holt AsJ said nothing about the validity of a claim to interest from the date on which judgment was reserved, and did not expand on what he meant by reference to the "time of trial". The plaintiff appealed to the Full Court. There were 11 grounds of appeal. All asserted error in striking out the pleading, but none expressly raised the question of interest. The leading judgment in the Full Court was written by Estcourt J, with whom Porter J and I agreed. All that was relevantly said by his Honour was this:

"In my view there is no merit in any of the grounds of appeal. Most of the grounds are no more than the complaints of a disappointed but legally uninformed litigant in person. This is an appeal by way of re-hearing. Error must be shown, either patent or latent. I apprehend no error on the part of the Associate Judge. Indeed I would respectfully endorse his Honour's reasons and adopt them as my own as disposing of the appellant's complaints as to the dismissal of his action, both as to his claim in respect of the respondents' entitlement to interest on their judgment against the appellant, from the date of that judgment, and as to the appellant's claims for damages, including for 'maintaining caveats and unjustifiably refusing to remove them'."

20           It is obvious that Estcourt J gave a general endorsement of the reasoning of Holt AsJ, but to the very limited extent that Estcourt J addressed the question of the date from which interest runs, his Honour spoke only of the disputed claim to interest on the judgment from "the date of that judgment." The issue of interest prior to judgment was not engaged. The decision of the Full Court in Quarmby is not authority for the proposition now contended for by the defendant. It suggests that interest is properly claimable from judgment, although in that case the costs order was made on the same date. Quarmby also tends against the correctness of the plaintiff's contention, in this case, that interest runs only from the date of a costs order.

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21          In this case judgment was given on 19 December 2019. For the foregoing reasons I would order that interest on costs, once determined, should be calculated from and excluding that date.