Paramount Lawyers Pty Ltd v Maneschi (No 2)
[2012] NSWSC 1303
•26 October 2012
Supreme Court
New South Wales
Medium Neutral Citation: Paramount Lawyers Pty Ltd v Maneschi (No 2) [2012] NSWSC 1303 Hearing dates: By written submissions Decision date: 26 October 2012 Jurisdiction: Common Law Before: Rothman J Decision: (1) The judgment of the Court in this matter of 3 August 2012 is varied by deleting Order 3(b) thereof and inserting in lieu thereof the following order:
"(b)The plaintiff herein, Paramount Lawyers Pty Limited, pay interest on the aforesaid judgment from 21 September 2010 until 3 August 2012 in accordance with s 100 of the Civil Procedure Act 2005 at 2% above the Reserve Bank of Australia cash target rate operating for the relevant period;"
(2) The plaintiff herein shall pay the costs of the defendant of these proceedings and of the proceedings in the Local Court on a party/party basis.
Catchwords: COSTS AND INTEREST - amendment of orders - determination of rate of interest prior to judgment at rate set by contract breached - costs on an overall basis - judgment less favourable to offeror than Offer of Compromise - no indemnity costs - principles on amendment of orders where subject matter reserved to parties Legislation Cited: Civil Procedure Act 2005
Legal Profession Act
Legal Profession Regulation 2005
Uniform Civil Procedure Rules 2005Cases Cited: Autodesk Inc v Dyason (No. 2) [1993] HCA 6; (1993) 176 CLR 300
Bailey v Marinoff [1971] HCA 49; (1971) 125 CLR 529
CH Giles & Co v Morris (1972) 1 All ER 1960
Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163
DJL v Central Authority [2000] HCA 17; (2000) 201 CLR 226
Elliott & Blessington v R [2007] HCA 51; (2007) 234 CLR 38
Pantorno v R [1989] HCA 18; (1989) 166 CLR 466
Postiglione v R [1997] HCA 26; (1997) 189 CLR 295Category: Consequential orders Parties: Paramount Lawyers Pty Limited (Plaintiff)
Roberto Maneschi (Defendant)Representation: Counsel:
A C Harding (Plaintiff)
Self represented (Defendant)
Solicitors:
Pikes & Verekers Lawyers (Plaintiff)
Self represented (Defendant)
File Number(s): 2011/209613
Judgment
HIS HONOUR: On 3 August 2012 the Court, as presently constituted, issued orders in this matter being orders on appeal from the Local Court which allowed the appeal in part, set aside the orders of the Local Court and gave judgment for the defendant in the sum of $22,000. The Local Court had given judgment in the sum of $29,205.
The substantive proceedings dealt with contractual issues associated with whether it was permissible, in law, to assign the debt arising from a Costs Agreement between counsel and solicitor, issues of estoppel, misleading or deceptive conduct and whether, as a matter of fact and law, there had been an assignment of the debt. Little or no attention was paid to the calculation of the debt. It was an appeal from the Local Court initiated originally as a claim for liquidated damages.
In substance, the defendant was successful on the appeal. The plaintiff's major submissions were that no debt arose and no assignment could occur and, in the alternative, if assignment had occurred the defendant was estopped from claiming the amount owing or was precluded from obtaining damages because the defendant had engaged in misleading or deceptive conduct. In that regard, the plaintiff was wholly unsuccessful. However, the Court took the view that the amount of the debt was $22,000 and not, as ordered by the Local Court, $29,205.
The orders issued by the Court included an order granting leave for the parties to file and serve written submissions on costs. This judgment deals with the costs to be paid.
The defendant, Mr Maneschi, submits that the plaintiff should pay its costs on an indemnity basis because of the effect of an offer of compromise and/or a Calderbank letter. Further, the defendant, Mr Maneschi, seeks to re-agitate the order of the Court relating to interest and seeks the payment of interest at the prescribed rate, rather than the Reserve Bank cash rate as ordered.
Interest
No motion, on notice or otherwise, has been filed to set aside the judgment on interest and to order interest at a different rate from that ordered on 3 August 2012. The plaintiff, Paramount Lawyers, rely upon that aspect to oppose re-agitation of the payment of interest. Mr Maneschi relies on the "slip rule" to re-agitate the issue.
Reliance on the slip rule is unnecessary. By order 5 of the orders issued on 3 August 2012, leave was reserved to the parties to address on any special or other order for costs and interest. As a consequence, at least in relation to the issue of interest, the Court is still seized of the matter and able to deal with the question of different orders in relation to interest.
Notwithstanding the jurisdiction of the Court to issue orders in relation to interest, orders of the Court can be altered only for reasons that form part of the exercise of a judicial discretion and are within the principles applicable to the alteration of a judgment issued.
The judgment of a court is entered and forms part of the record of proceedings and, at common law and absent statutory expansion, forms the basis for certain prerogative writs, although, in the case of a superior court of record of general jurisdiction, prerogative writs would not ordinarily arise. The proposition that the orders form part of the record is outlined by the High Court of Australia in Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163.
For that reason, at least in part, there are significant restrictions on the jurisdiction of the superior court to alter judgments, once entered. Judgments of the Court are entered by recording them on the computer system of the Court. The orders issued on 3 August 2012 were recorded on the Court's computerised court records' system on or about that date. As a consequence, the orders issued on 3 August 2012 have been entered: see Uniform Civil Procedure Rules 2005 ("UCPR"), r 36.11.
As is made clear by the High Court in Postiglione v R [1997] HCA 26; (1997) 189 CLR 295 and Pantorno v R [1989] HCA 18; (1989) 166 CLR 466, there are two quite distinct periods, each of which determines the ability to alter judgments or orders. Prior to the judgment being entered, the circumstances in which a court will be persuaded to entertain further argument (and possibly further evidence) are extremely limited. In relation to such earlier periods, the High Court, in Elliott v R; Blessington v R [2007] HCA 51; (2007) 234 CLR 38 applied the civil criteria expressed by the Court in Autodesk Inc v Dyason (No. 2) [1993] HCA 6; (1993) 176 CLR 300 in which the High Court said, at 303:
"What must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing. The purpose of the jurisdiction is not to provide a back door method by way unsuccessful litigants can seek to re-argue their cases."
On the other hand, after judgment has been entered, there are only 3 bases upon which a judgment or order may be reopened and amended and they are:
(a) The "slip rule";
(b) The power to amend where the intention of the Court has not manifested in the judgment; and
(c) The capacity to allow the altering of orders made in Chambers: see Bailey v Marinoff [1971] HCA 49; (1971) 125 CLR 529; DJL v Central Authority [2000] HCA 17; (2000) 201 CLR 226; CH Giles & Co v Morris (1972) 1 All ER 960.
However, the bases earlier expressed are dependant upon the proposition that leave has not been reserved to raise an issue and that final orders have issued. Whenever there is a reservation to the parties to agitate a question, in my view, there is always jurisdiction and power in the Court to deal with the question reserved.
Notwithstanding the reliance by Mr Maneschi on the "slip rule" as noted above, such reliance is unnecessary. Moreover, it assumes that the Court mistakenly made the orders, when the order as now framed was a deliberate exercise of the discretion reposed in the Court to order interest.
Pursuant to the terms of s 100 of the Civil Procedure Act 2005, the Court has the jurisdiction to include interest or an order for interest in the orders concluding proceedings in which there is the recovery of money. Such interest may be ordered to be paid on the whole or any part of the money recovered, or for the whole or any part of the period from the time the cause of action arose until the time the judgment takes effect.
Mr Maneschi relies upon the order for interest made by the Local Court. The orders of the Local Court were set aside and replaced by the orders made by the Court on 3 August 2012. As a consequence the order for interest made by the Local Court is of no effect.
The nature of the discretion reposed in the Court to order interest up to judgment is to allow a successful party to be compensated properly for the practical loss it has suffered. As a consequence, successful parties who obtain a money judgment will generally be entitled to an award of interest. In these proceedings, there is no issue that interest ought be ordered. However, it should be understood that the order for interest is compensatory and is not intended either as a reward to the successful party or as a punishment to the unsuccessful party. It is awarded in order to compensate properly for the loss that has been occasioned.
In these proceedings, notwithstanding the lengthy submissions made by each of the parties, no attention was paid during the course of the proceedings to the question of interest or the amount thereof.
Under UCPR, r 6.12(8), where in the case of a liquidated claim the period or rate of interest is not specified, the default rate is 4% above the cash rate last published by the Reserve Bank of Australia.
The order made by the Court was that interest be payable, up to the time of judgment, at the Reserve Bank rate. The reason that rate was chosen was that, ordinarily, interest is not payable on legal fees in accordance with the Legal Profession Act 2004 and the Legal Profession Regulation 2005. The Costs Agreement between Mr Branson QC and Paramount Lawyers, by clause 12 thereof, provided that interest could be payable in accordance with the Legal Profession Regulation 2005, namely, at the cash target rate of the Reserve Bank increased by 2%. That rate is significantly lower than the default rate prescribed by the UCPR.
The Court's intention in fixing an interest rate that was equivalent to the Reserve Bank cash rate, with no addition, and granting the parties leave to address on the question, was to encourage the parties to address the Court on the question.
Notwithstanding that intention, the submissions have been unhelpful. On the one hand Mr Maneschi claims the default rate under the UCPR. On the other hand, Paramount Lawyers opposes interest at any rate and otherwise accepts that "usually" the default position in UCPR, r 6.12 applies.
Notwithstanding the lack of attention to the issue by the parties, it seems that the effect of the orders of the Court should not put Mr Maneschi in a better position than he would be in enforcing the contract under its terms. I accept that the order of the Court is not a payment enforcing the interest rate payable under the Costs Agreement. Nevertheless, in the exercise of the Court's discretion, it would be inappropriate to award interest at a rate higher than the Costs Agreement provides, under which Agreement Mr Maneschi sues.
In those circumstances the order made by the Court will be varied, insofar as Order 3(b) provides for the Reserve Bank cash rate operating and, in lieu thereof, will provide for the cash target rate of the Reserve Bank of Australia plus 2% for the relevant period.
Costs
Mr Maneschi seeks an order for indemnity costs and relies on an offer of compromise of 23 September 2011, which offer was that the plaintiff pay the defendant $25,000, exclusive of costs. The offer was made, as earlier stated on 23 September 2011, and remained open until 21 October 2011. The proceedings occurred on 30 November 2011. The offer of compromise was intended to resolve the proceedings before the Supreme Court, as a consequence of which the offer made was an offer before trial of the issues in these proceedings.
It is not suggested that the offer of compromise was an amount that was equal to or greater than the amount awarded by the Court. As a consequence, the provisions of UCPR, r 42.15 (namely, that the defendant made an offer and the plaintiff obtained an order or judgment on the claim less favourable to the plaintiff than the terms of the offer) do not apply to this situation.
Ordinarily, although the relevant UCPR relates only to judgments in favour of the plaintiff, interest after the date of offer is not included in the calculation of the amount of any offer, when compared with the amount of the order of the Court. Even if the Court were to include the interest payable in accordance with the proposed amended order to which the Court referred above, the offer of $25,000 was an amount less favourable to Mr Maneschi than that ordered by the Court to be paid. As a consequence, the provisions of the UCPR do not apply to entitle Mr Maneschi to indemnity costs.
Ordinarily, costs follow the event. On one view the plaintiff, Paramount Lawyers, enjoyed success on the appeal in that the orders of the Local Court were set aside and different orders were made. Those different orders involved a requirement on the plaintiff, Paramount Lawyers, to pay an amount less than that which was ordered by the Local Court.
Nevertheless, the case in this Court, as in the Court below, was agitated more on the basis of whether any amount was payable rather than the calculation of the amount payable. There was some attention paid to the difference between $22,000 and $29,205, but that was an insignificant aspect of the proceedings before this Court, and an insignificant aspect of the proceedings before the Local Court.
In no way did the controversy as to the amount of the debt affect the length of the proceedings or the costs thereof. Indeed, the controversy as to the amount related more to the submission of Paramount Lawyers that because the amount owing was $22,000 and not the higher amount, the debt had not been properly or adequately specified and therefore there was no valid assignment of it.
Notwithstanding that the plaintiff, Paramount Lawyers, was successful in part on appeal, the overall effect of the judgment of this Court and of the proceedings as a whole was that the defendant, Mr Maneschi, was successful. However, the costs should be paid both in this Court and in the Local Court on a party/party basis.
Conclusion
On the basis of the foregoing, the Court makes the following consequential orders varying the judgment of 3 August 2012 in the following terms:
(1) The judgment of the Court in this matter of 3 August 2012 is varied by deleting Order 3(b) thereof and inserting in lieu thereof the following order:
"(b) The plaintiff herein, Paramount Lawyers Pty Limited, pay interest on the aforesaid judgment from 21 September 2010 until 3 August 2012 in accordance with s 100 of the Civil Procedure Act 2005 at 2% above the Reserve Bank of Australia cash target rate operating for the relevant period;"
(2) The plaintiff herein shall pay the costs of the defendant of these proceedings and of the proceedings in the Local Court on a party/party basis.
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Decision last updated: 26 October 2012
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