Ingles v Gould

[1992] QCA 68

IN THE COURT OF APPEAL	[1992] QCA 068
SUPREME COURT OF QUEENSLAND	Appeal No. 89 of 1990
Before the Court of Appeal
The President Mr Justice Davies Mr Justice Shepherdson
BETWEEN:

GRAEME ANGUS INGLES and

ROBIN DOUGLAS TIFFEN

(Plaintiffs) Respondents

- and -

RONALD WALLACE GOULD and

ELAINE MARGARET GOULD

(Defendants) Appellants

JUDGMENT OF THE PRESIDENT AND DAVIES J.A.

Delivered the 14th day of April, 1992

This appeal and the respondents' notice of contention

mark another stage in a long running dispute. The
appellants were plaintiffs and the respondents defendants to
a counter-claim for damages in Supreme Court Action No.173
of 1978 in which other persons (the "other party") were also
parties. A judgment on the counter-claim given in favour of
the respondents on 18 September 1981 included orders that
the appellants pay the respondents' taxed costs and that the
appellants recover such costs from the other party. The
litigation proceeded through the Full Court to the High
Court, where the respondents were successful.

The judgment of the High Court was delivered on 6th November 1984 and, on the following day, the respondents delivered their bill of costs to the appellants.

The taxation of the respondents' bill of costs was

fixed for 15 January 1985 but was postponed because of
negotiations between the respondents, the appellants and the
other party. On the same day, a document described as a form
of acknowledgment was sent by the respondents for execution
by the appellants and the other party. The document
quantified the respondents' costs and provided for interest
at the rate of 14% per annum until the costs were paid in
full. The appellants signed and returned the acknowledgment
on 18 January 1985 subject to conditions, including a
requirement of an indemnity from the other party in favour
of the appellants. On 7 March 1985, the other party signed
and returned altered documentation which acknowledged the
amount of the respondents' bill of costs but failed to meet
the appellants' conditions.

On 7 March, 1986, the respondents commenced the present

action against the appellants in the Supreme Court of costs and interest based on documentation which had been executed.

While the action was continuing, a further date for the

taxation of the respondents' bill of costs was fixed for 2 the respondents and the other party for the payment of the respondents' costs by the other party by instalments by the end of December. It seems that the appellants acquiesced in that agreement and the taxation was further adjourned. It is not disputed that the respondents reserved their right to seek interest from the appellants.
The amount agreed to be paid to the respondents by the other party on 2 December 1986 was that provided for in the bill of costs submitted by the respondents on 7 November
1984. Payment was made to the respondents by the other party

by two instalments on 3 and 24 December 1986 respectively.

It is common ground that the payments made by the other

party discharged the appellants' obligation to pay the

respondents' costs.

The respondents continued this action against the

appellants for interest on the costs which had been paid,
and the action was remitted to the District Court under

section 77 of the District Courts Act 1967 as amended. On
this appeal, the District Court's jurisdiction was accepted.

When the action came on for hearing in the District

Court, the original basis of the respondents' claim for interest was maintained but a number of other bases were also advanced. All but one of the respondents' claims were rejected, including the claim that the appellants had bound themselves to pay interest at the rate of 14% by the documentation executed in early 1985. However, the respondents succeeded on the basis of a claim founded on section 73 of the Common Law Practice Act 1867 as amended.
In his reasons for judgment, the trial judge concluded that there was no agreement binding of the appellants prior to the agreement between the respondents and the other party
on 2 December, 1986. He also said:

"Counsel for Goulds contends that costs were
ascertained on 2 December 1986 (see also the allegation
to that effect in paragraph 10(d)(iv) of the amendment
to the defences made by leave on 14 March 1990 referred
to erroneously as paragraph 10(b)(iv) in the written
submission by plaintiffs' counsel).

As I understand the plaintiffs' position, they are content to have the matter dealt with on the basis that counsel for the defendants concedes that the ascertainment of costs was finalised as at the time outside the 21 days of the payment of the second and final instalment referred to earlier. This being so, I find that the plaintiffs are entitled by force of the section to interest on costs, which costs have been ascertained at $124,249.90 to 3 December 1986, and on $64,249.90 from 4 December 1986 to 24 December 1968.

There is a discretion in the court as to the rate of the interest to be determined as the interests of justice in a particular case may be required.

The plaintiffs delayed formally having the bill of circumstances of this case for the defendants to have to pay interest at the usual rate of 12 per cent for the full period, bearing in mind the above circumstances, including that by reason of various appeals, etc., the bill of costs was not delivered until 7 November, 1984 and it was not set down for taxation until December of 1984. As a basis for arguing that I ought not to award interest, it was urged upon me, in effect, by counsel for the defendants that the 21 day period referred to in s.73 was exceeded by one day only, and it would be most unjust to make an order for interest upon them. This would be so if, indeed, as alleged by the defence, the costs were ascertained on the day that Vaggelas agreed to pay $124,249.90. So far as the defendants are concerned, however, in my view, costs must have been ascertained at some earlier time. They were prepared to, and did by their solicitors ultimately sign the acknowledgment which recorded that the costs were in the sum that I have indicated. I consider the justice of the situation would be met by my fixing the interest at 12 per cent from 17 January 1985 on $124,249.90 to 3 December 1986, and on $64,249.90 from 4 December 1986 to 24 December 1986. If, pursuant to s.73, I have no discretion to award interest from a time other than the date of the original judgment, I would adjust the interest rate to achieve the same result.

costs taxed by their own choice, or that of their legal
representatives on their behalf. Had they, instead of
seeking agreements from the defendants and Vaggelas for
a 14 per cent interest rate in consideration for
delay, proceeded to tax the bill, the defendant would
have declined or failed to pay within 21 days at their
peril. Certainly it can be said that the defendants
have had the benefit of this delay.
On my calculations, interest then on that basis amounts
to a total of $29,453 to the nearest dollar."

The parties subsequently agreed and notified the trial

judge prior to his formally pronouncing judgment on 26 April
1991 that, if calculated according to his rulings, the sum
of $29,453 to which he referred should have been $28,414.20,
which was reflected in the formal judgment which was entered

in the following terms:

"IT IS THIS DAY ADJUDGED that the Plaintiff do recover
against the Defendant $28,414.00 and that the
Defendants pay the Plaintiffs' costs of the action as
if the action were commenced continued and concluded as
one for relief pursuant to section 73 of the Common Law
Practice Act, to be taxed, and that otherwise, to the
extent that the Defendants' costs of the action had
been increased by the Plaintiffs pursuing the claims in
which the Plaintiffs were unsuccessful, the Plaintiffs
are ordered to pay the Defendants those costs of the
Defendant to be taxed."

The Orders sought by the appellants in this Court are

set out in their amended Notice of Appeal in the following
terms:

"(a) That there be judgments for the

Defendants/Appellants against the

Plaintiffs/Respondents.

(b)

That the Plaintiffs/Respondents do pay the the action and this appeal to be taxed."

In their notice of contention, the respondents seek to
have the order made in the District Court varied so as to
read:

"That there be judgment for the Plaintiffs against the ($33,420.67) together with interest on that sum at the rate of 14 per centum per annum from 25 December 1986 until 26 April 1991; and

Defendants in the sum of THIRTY-THREE THOUSAND FOUR
That the Defendants pay the Plaintiffs' costs of the
action to be taxed."

Although the respondents' notice was based on a

contention that a rate of interest of 14% per annum should
have been adopted instead of the rate of 12% per annum
adopted by the trial judge, the notice of contention did not
dispute the dismissal of the respondents' other claims,
including the trial judge's rejection of their claim that
the appellants were bound to pay interest at that rate by
the documentation entered into in 1985. That obligation was
asserted to have arisen under the Common Law Practice Act.

According to the respondents it was sufficient that:

(a)	the amount of their costs was known once both the appellant and the other party signed documentation which acknowledged the amount although no obligation to pay that amount in satisfaction of the order for costs was created by the documentation; and
(b)	the appellant had no further interest in the amount of the costs which they were entitled to recover from the other party.

Section 73 of the Common Law Practice Act provides:

"73. (1) Where judgment is given or an order is made

by a court of record for the payment of money in a
cause of action that arose after the commencement
of the Common Law Practice Act Amendment Act 1972,
interest shall, unless the court otherwise
orders, be payable at the rate prescribed from
time to time by Order in Council and until so
prescribed at the rate of eight per centum per
annum from the date of judgment or order on so
much of the money as is from time to time unpaid.
(2) Notwithstanding anything contained in

subsection (1) -

(a) judgment for damages and the damages are
paid within twenty-one days after the
date of the direction, interest on the

where the court directs the entry of court otherwise orders;

(b) payment of costs and the costs are paid
within twenty-one days after the
ascertainment thereof by taxation or
otherwise, interest on the costs shall

where the court makes an order for the orders."

Prior to section 73 of the Common Law Practice Act, a

judgment creditor, including a person in whose favour an
order for costs had been made, could obtain interest on the
amount ordered to be paid incidentally to execution but not
otherwise: Reis v. Carling (1908) 5 CLR 673. When the right
to interest existed, interest accrued from the date of the
judgment or order.

Legislation elsewhere upon which section 73 of the Common Law Practice Act is based similarly provides for interest on judgment debts from the date of judgment subject

to the qualification that, unless the court otherwise
orders, such interest is not payable if the judgment or
order is for an unquantified amount (damages or costs) and
payment is made within a period fixed by reference to a
nominated event. See, generally, Fischer v. David Syme and

Co. Ltd. (1989) 18 NSWLR 606.

That is also the broad approach adopted by section 73

of the Common Law Practice Act. Subsection 73(2) is a
qualification of subsection 73(1). Unless the Court
otherwise orders, interest otherwise payable under
subsection 73(1) is not payable on damages or costs if
payment of the amount of the damages (subsection 73(2)(a))
or costs (subsection 73(2)(b)) is paid within a period
determined in accordance with those subsections.

The appellants' primary submission was founded on the

commencement of the Common Law Practice Act Amendment Act
1972" in sub-section 73(1). No similar phrase appears in the
legislation elsewhere upon which section 73 of the Common

phrase "in a cause of action that arose after the alleged cause of action asserted by the appellants against the respondents in Supreme Court Action no.173 of 1978 "arose after the commencement of the Common Law Practice Act Amendment Act 1972", the order for costs in favour of the respondents was not made "in a cause of action". In support of that proposition it was argued that an order for the payment of costs would only be "made ... in a cause of action" within the meaning of sub-section 73(1) if the action was an action by a solicitor for the recovery of costs or an action by a client for the recovery of an overpayment of costs. Alternatively, an order for payment of costs in favour of a defendant sued on a cause of action is not an order "made ... in a cause of action"; a fortiori if, as in the present case, the claim against the defendant is dismissed because, in such circumstances, there is a judicial determination that there was no cause of action.

Whatever force might have been associated with the

appellants' argument if an exercise in statutory
construction was little more than a search for literal
meaning, that is not the modern approach: see sections 14A
and 14B of the Acts Interpretation Act 1954 as amended and

Saraswati v. R. (1991) 172 CLR 1, 21.

The object of the phrase "in a cause of action that

arose after the Common Law Practice Act Amendment Act 1972"
in sub-section 73(1) of the Common Law Practice Act is to
introduce a temporal limitation, not artificial distinctions
between actions in relation to costs and other actions or
anomalous differences between plaintiffs and defendants in
whose favour orders for costs are made. The correct meaning
of sub-section 73(1) appears quite clearly if the critical
phrase is read as though the words "any proceedings in
respect of" were inserted after the word "in"; that is, if
the phrase is read as "in any proceedings in respect of to a
cause of action that arose after the commencement of the
Common Law Practice Act Amendment of 1972."

Some confirmation for this approach is to be found in

section 72 of the same Act, to which section 73 is
complementary. Section 72 is concerned with interest up

until judgment and section 73 with interest after judgment.

Sub-section 72(1) commences with the words "In any

proceedings in respect of a cause of action that arises contain the same limitation.
after the commencement of the Common Law Practice Act

Once it is determined that sub-section 73(1) applies,

it becomes necessary to consider the operation of never ascertained within the meaning of the paragraph while the respondents contend that the amount of the costs was ascertained by March 1985. Alternatively to their other submissions, each of the appellants and the respondents contend that the costs ordered to be paid by the appellants to the respondents were ascertained on 2 December, 1986.
para.73(2)(b) in the circumstances of this unusual case.

This time it is the respondents who must resort to

literalism for their preferred submission. The contention
that the amount of the costs was ascertained by March 1985
was based in part, upon the premise that the amount provided
for in the respondents' bill of costs was the basis of each
acknowledgment so that the amount of the costs was known at
that time. It was argued that, because the amount was known,
it had been ascertained. The same argument formed the basis

of the respondents' notice of contention.

It is unnecessary in order to dispose of this

submission to search for some synonym for 'ascertainment",
the word used in subsection 73(2)(b), and to make a choice
between possible substitutes which might to varying degrees
suit the context, such as, for example, "knowledge" or
"determination". When regard is had to the object of the
subsection, it is apparent that no "ascertainment" of costs
within the meaning of the subsection occurs until the
relevant parties are bound (subject perhaps to appeals) with
respect to the amount of the costs ordered to be paid.

The respondents' submissions extended to an assertion

that the appellants were bound in March, 1985 to pay the
respondents the amount of the costs stated in their bill,
but there are a number of reasons why the Court should not

proceed on that basis.

In the first place, the respondents' attempt to

establish that the events gave rise to an agreement by the
appellants to accept the amount of the respondents' bill of
costs or an estoppel or waiver which prevented them from
disputing that amount was unconvincing. The parties
proceeded on the basis that the appellants had not lost or

abandoned their right to taxation prior to 2 December, 1986,

as is confirmed by the appointment for the taxation of the

respondents' bill of costs on that date and the further
adjournment of the taxation to February, 1987, to await the
performance of the other party's agreement on 2 December,
1986, to make payments in respect of the costs directly to

the respondents.

Secondly, it is at least questionable whether an

assertion that the appellants were bound in March 1985 to
pay the respondents the amount of the costs stated in their
bill is open to the respondents in this Court. That issue
was decided against the respondents in the District Court
when the respondents' claim for interest on any basis other
than section 73 of the Common Law Practice Act was rejected,
and the respondents' notice of contention does not dispute
that those other claims were correctly dismissed.

In any event, for other reasons, it is unnecessary for this Court to embark upon a detailed analysis of the events which occurred and their legal consequences and it is

appropriate for this Court to proceed on the basis that the
amount of the costs was ascertained on 2 December 1986.

The trial judge considered that the appellants and the

respondents conceded before him that ascertainment of the
costs for the purpose of sub-section 73(2)(b) of the Common
Law Practice Act occurred on 2 December 1986.

In his reasons for judgment, His Honour referred to a

concession by the appellants that the ascertainment of costs to this Court does not permit a conclusion that the trial judge erred in proceeding on the basis that the concession which he attributed to the appellants had been made.
was finalised at a time outside the 21 days of the payment
of the second and final instalment made by the other party
to the respondents. In part at least, he seems to have
relied on the address of counsel who appeared for the
appellants at the trial as the source of that concession.

The trial judge also stated that the respondents were

"content to have the matter dealt with" on the basis of that
concession. Once again, the limited material available does
not permit a conclusion that that inclusion was mistaken. In
the circumstances, this Court should proceed on the basis

upon which the matter was apparently conducted below.

It should be noted that it was not argued in this

Court, or apparently in the District Court, that when there is partial payment within the period fixed or in accordance with para.73(2)(b), subsection 73(1) operates only as to the
balance of the costs. Subject to arguments already noted, it
was not disputed that, since the costs were not fully paid
within 21 days after ascertainment, interest was payable on
the full amount until the first payment was made and
thereafter on the balance from time to time owing, subject

always to the discretion of the court to "otherwise order"

The trial judge's exercise of the discretion to

"otherwise order" is the final matter to be considered on this appeal. The circumstances which bear upon the proper exercise of that discretion are essentially the same events

as the parties relied on for the various other arguments

which were canvassed.

The appellants seized upon a statement by the trial

judge in this context that costs must have been
"ascertained" prior to 2 December 1986, which was followed
by a reference to the acknowledgment signed by the
appellants in January 1985. It was argued that that
statement was inconsistent with His Honour's finding that
"the ascertainment" of the amount of the costs within the
meaning of sub-section 73(2)(b) had occurred on 2 December
1986. However, there is no reason to suppose that, when he
said that "So far as the defendants are concerned ... costs
must have been ascertained at some earlier time", in the
course of discussing the exercise of his discretion the
trial judge intended to contradict his conclusion that the
appellants were not bound to pay the respondents the amount
of the costs stated in their bill prior to 2 December 1986.

Apart from that matter, the appellants' complaints concerning the trial judge's exercise of his discretion centred upon the circumstance that the respondents were paid

in full only one day outside the 21 day period allowed by sub-section 73(2)(b) and an assertion that the appellants are not entitled to recover from the other party the

interest which they are required to pay the respondents. assertion is of little relevance in the circumstances and there is nothing to indicate that the trial judge did not take the former matter into account.
Further, there is no other basis upon which it could be safely concluded that His Honour's discretion miscarried.

In the circumstances the appeal should be dismissed

with costs.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND	Appeal No. 89 of 1990
BETWEEN:

GRAEME ANGUS INGLES and

ROBIN DOUGLAS TIFFEN

(Plaintiffs) Respondents

- and -

RONALD WALLACE GOULD and

ELAINE MARGARET GOULD

(Defendants) Appellants

The President
Mr Justice Davies

Mr Justice Shepherdson

Reasons delivered by the President and Davies J.A.
with separate reasons by Shepherdson J. on the

14th day of April, 1992

APPEAL DISMISSED WITH COSTS.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND	Appeal No. 89 of 1990
Before the Court of Appeal
The President Mr Justice Davies Mr Justice Shepherdson
BETWEEN:

GRAEME ANGUS INGLES and

ROBIN DOUGLAS TIFFEN

(Plaintiffs) Respondents

- and -

RONALD WALLACE GOULD and

ELAINE MARGARET GOULD

(Defendants) Appellants

JUDGMENT OF THE PRESIDENT AND DAVIES J.A.

Delivered the 14th day of April, 1992

MINUTE OF ORDER:	Appeal dismissed with costs.
CATCHWORDS:
Counsel:	Mr H. Fraser for the Appellants Mr J. Sheahan for the Respondents
Solicitors:	Messrs. McCullough and Robertson for the Appellants
Messrs. Thynne and Macartney for the Respondents
Hearing Date:	9th March, 1992