Kuek v Devflan Pty Ltd & Anor (No. 2)
[2011] VSCA 85
•1 April 2011
SUPREME COURT OF VICTORIA
COURT OF APPEAL
| S APCI 2009 3746 | |
| GABRIEL KUEK | Appellant |
| v | |
| DEVFLAN PTY LTD & ANOR (No 2) | Respondents |
---
JUDGES: | NEAVE, HARPER and HANSEN JJA | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | On the papers | |
DATE OF JUDGMENT: | 1 April 2011 | |
MEDIUM NEUTRAL CITATION: | [2011] VSCA 85 | |
---
COSTS – Successful appellant sought repayment of money paid to respondents under costs orders of Taxing Master on basis that costs orders had been set aside – Respondents’ costs initially taxed at $39,105.20 by Taxing Master on 10 October 2007 – Taxing Master varied costs to $38,730.20 on review on 8 February 2008 – Confirmed on review by judge – On appeal orders of judge and Taxing Master on 8 February set aside, and review remitted to Costs Judge – Order of 10 October 2007 subsisted – Effect of r 63.56.1 – Application refused.
---
| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr A W Sandbach | Access Law |
| For the Respondents | Mr I G Waller SC | Brygel Lawyers |
NEAVE JA:
I have had the advantage of reading the judgment of Hansen JA in draft form and agree, for the reasons he gives, that the application for repayment should be refused with no order as to costs.
HARPER JA:
I also agree with Hansen JA.
HANSEN JA:
On 10 February 2011, following the handing down of judgment, the Court made orders including that the orders of the Taxing Master made on 8 February 2008 and 29 October 2008 be set aside and that the review of the Taxing Master’s orders commenced by notice dated 24 October 2007 be remitted to the Costs Judge for hearing and determination in accordance with law. Counsel for the appellant having requested, and the respondents opposing, repayment of the amounts the appellant has paid for the respondents’ taxed costs, we reserved liberty to apply on issues relating to the amount to be repaid including interest. Subsequently the parties, being unable to agree, requested the Court determine the matter. On 10 February the parties had been informed that if necessary the Court would deal with the matter on the basis of written submissions and without further appearance. Having now received written submissions we deal with the issues raised as follows.
To recapitulate, on 10 October 2007 the Taxing Master taxed and allowed the respondents’ costs in the sum of $39,105.20. He also ordered that the appellant pay the respondents $29,105.20, having previously (on 17 August 2007) made an interim order for the payment of $10,000. Pursuant to those orders the appellant paid the respondent $10,000 on 20 August 2007 and $18,000 on 11 October 2007, and $11,105.20 on 7 December 2007, being the total taxed amount of $39,105.20.
In the meantime, on 24 October 2007 the appellant filed the application to review the order of the Taxing Master pursuant to r 63.56.1. Rule 63.56.1(5) provided that upon the application the Taxing Master –
(a)shall reconsider and review the taxation upon the objections stated in the notice; and
(b)shall make an order confirming the taxation or make such further or other order as may be necessary.
On the review the Taxing Master concluded that the taxed amount should be reduced by $375. Accordingly, on 8 February 2008 he ordered that: ‘Pursuant to Rule 63.56.1(5)(b) … the order of 10 October 2007 is varied on review from $39,105.20 to $38,730.20’.
The right of a successful appellant to be repaid with interest that which has been paid under a judgment set aside is based on restitution: see Commonwealth of Australia v McCormack[1] and National Australia Bank Ltd v Bond Brewing Holdings Ltd.[2]
[1](1984) 155 CLR 273, 276.
[2][1991] 1 VR 386, 597.
As to interest, for reasons outlined in the appellant’s submissions, interest pursuant to the Penalty Interest Rates Act 1983 is not applicable either directly or by analogy. The purpose of awarding interest is to restore to the successful appellant that which has been taken from him, interest being regarded as the fruit of money the receipt of which cannot be denied: see Bond Brewing[3] and Ronstan International Pty Ltd v Thomson.[4] The Court determines a rate which in the circumstances does justice as between the parties. To assist the Court in determining an appropriate rate of interest the appellant’s counsel provided tables containing the Reserve Bank of Australia cash rate targets and the Commonwealth Bank of Australia Streamline Account overdraft rates.
[3]Ibid 597.
[4][2002] VSCA 107.
The appellant does not seek repayment of the interim amount of $10,000. Rather he seeks repayment of the balance of $29,105.20 together with interest for the period from 11 October 2007 until repayment.
The respondents submitted that the appellant was not entitled to repayment because the Taxing Master’s order made on 10 October 2007 has not been set aside. They submitted that the appellant could not be entitled to repayment while that order stood. Alternatively, and assuming that there was a basis on which to order repayment, the order would be inutile and impractical given that the remitted review has been fixed for hearing on 29 July 2011. It was submitted that any new assessment by the Costs Judge can easily be adjusted between the parties, having regard to the fact that the amount of the original taxation order has been paid.
In a reply, provided to the Court without leave, the appellant sought to make an argument that because r 63.56.1 did not prevent an application for review operating as a stay, the rule meant that the application to the Taxing Master for a review operated as an automatic stay of execution of the original taxation order. It is to be noted that the only payment to which the submission could relate was the final payment of $11,105.20 (the other payments having been made before the application for review was filed), but the fact is that that payment was made, and without protest that the obligation to pay was stayed under the Rules. Further, there is no evidence that the payment was made under a relevant mistake. But, apart from that, the point is not appropriately raised and the respondent should not be expected or required to deal with it by way of rejoinder. Not only did the appellant not have a right to provide a reply but were we then to proceed to a rejoinder, and possibly a further response from the appellant, where would it end? The parties should not be permitted to indulge themselves in this way, out of all proportion to the amount involved in this case.
It should be mentioned that the appellant, in his reply, further submitted that if his contention as to the construction of the Rules was incorrect, it followed that the orders made on 10 February 2011 did not correctly express the intention of the Court that the Taxing Master’s decision be set aside and that the quantification of the costs payable be determined in accordance with law. To give effect to that intention the Court should also expressly set aside the Taxing Master’s order made on 10 October 2007. This submission misapprehends the Court’s decision which was that the parties return to the review stage before the Costs Judge. The review is premised upon the subsistence of the 10 October 2007 taxation order.
The submissions raise the question of the relationship between the 10 October 2007 and 8 February 2008 orders. On its making did the latter order become the order on taxation? In my view it is plain on the face of the order that it did. What the Taxing Master did was reconsider and review the taxation pursuant to r 63.56.1(5)(a) and, having done so, order a substituted figure as that at which the respondents’ costs were taxed and allowed. It is true that the order used the word ‘varied’ but that was an appropriate mechanism or ‘necessary’ way to express the order on a review under r 63.56.1(5)(b). The result was that the 8 February 2008 order stated the amount at which the respondents’ costs were taxed and allowed. Accordingly, the order of 10 October 2007 ceased to have effect to that extent. In lieu there stood the order of 8 February 2008.
However, the 8 February 2008 order has been set aside and the application to review has been remitted for hearing and determination. It is important to note that what is reviewed under r 63.56.1(1) is the ‘order’ of the Taxing Master ‘allowing or disallowing, wholly or in part, any item in a bill, or allowing some amount in respect of any item’. The ‘order’ of the Taxing Master was that ‘The costs of the respondent are taxed and allowed in the sum of $39,105.20’. It is that order which is to be reviewed on the remitter, and as to which the Costs Judge will make an order under a r 63.56.1(5)(b) subject of course to any agreement of the parties on the matter. In the meantime the 10 October 2007 taxation order continues in force.
An issue not specifically mentioned by counsel concerns the amount of $375 by which the Taxing Master reduced the respondents’ taxed costs. All I do is mention that even as to that amount, plus interest thereon, the respondents oppose repayment on the technical ground that the 10 October 2007 order still stands. Perhaps the respondents hope to do even better next time around. On the other hand, perhaps by this stage those involved have lost perspective.
One further matter is that neither party has suggested that the other would not be good to pay or repay the costs and interest in question. Accordingly, no consideration of prejudice arises in that respect.
The conclusion in these circumstances is that the appellant is not entitled to repayment of the respondents’ taxed costs. That is because the order which establishes, or at least quantifies, his liability for such costs has not been set aside. Not only has the Court not done so and did not intend to do so, but on the appeal, and understandably, the appellant did not seek the setting aside of the 10 October 2007 order.
It follows that the application must be refused. What will now happen is that the review will proceed to completion at which point the appellant’s liability for costs will be ascertained. If and to the extent that liability is less than the total amount he has paid he will be entitled to be repaid the amount of that difference with interest on the principles referred to earlier. As to interest, if repayment had been ordered, I would have allowed a rate of 6 percent compound per annum but that is a matter that must be determined in the future if it arises.
Finally, there should be no order for the costs of the application which, in my view, the parties ought to have been prepared to make submissions on, when the Court gave judgment.
---
0