Ruff v Milton

[1995] QCA 411

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 101 of 1995

Brisbane
[Ruff v. Milton]

BETWEEN

ADELE CLARE RUFF Appellant

(Plaintiff)

AND

ROBERT CLARENCE MILTON Respondent

(Defendant)

McPherson J.A.
Thomas J.

Williams J.

Judgment delivered 8/09/95
Further Order delivered 10/10/95
Reasons for judgment by the Court

ORDER OF THE COURT OF APPEAL MADE ON 9 SEPTEMBER 1995 BE VARIED BY ORDERING THAT THE DEFENDANT PAY THE PLAINTIFF'S COSTS, FIXED ON A SOLICITOR AND CLIENT BASIS, OF AND INCIDENTAL TO THE ACTION.

CATCHWORDS	CIVIL - COSTS - Rule 118(1) District Court Rules - Offer to settle - Whether circumstances make "another" order for costs the proper order - Whether r.118(1) District Court Rules has application to proceedings on appeal - Tamway v. Solomon (App. 76 of 1995)
Counsel:	C.A. White for the appellant K. Holyoak for the respondent
Solicitors:	Nehmer Davenport Dean McKee for the appellant McInnes Wilson & Jensen for the respondent
Hearing Date:	28 August 1995
IN THE COURT OF APPEAL	[1995] QCA 411
SUPREME COURT OF QUEENSLAND

Appeal No. 101 of 1995

Brisbane

Before McPherson J.A.
Thomas J.
Williams J.

[Ruff v. Milton]

BETWEEN

ADELE CLARE RUFF Appellant

(Plaintiff)

AND

ROBERT CLARENCE MILTON Respondent

(Defendant)

REASONS FOR JUDGMENT - THE COURT

Judgment delivered the 10th day of October 1995

Judgment was delivered in this appeal on 8 September 1995 allowing the plaintiff's appeal with costs by increasing the amount awarded to her at the trial from $73,101.56 to $104,623.56. Counsel for the parties have since provided written submissions directed to questions of costs both at trial and on appeal. With respect to the costs at both levels, the appellant plaintiff now seeks orders that they be awarded on a solicitor and client basis.

In respect of the costs at trial, the plaintiff relies on r.118(1) of the District Court Rules 1968. That rule, which is in substantially the same form as O.26, r.9(1) of the Rules of the Supreme Court, provides that where a plaintiff makes an offer to settle which is not accepted by the defendant, and the plaintiff obtains a judgment no less favourable than the offer to settle, the court must order the defendant to pay the plaintiff's costs fixed on a solicitor and client basis, unless the defendant shows that another order for costs is proper in the circumstances. The genesis and purpose of the corresponding Supreme Court Rule has recently been considered by this Court in Tamwoy v. Solomon (App. 76 of 1995).

In this instance the plaintiff on 5 April 1995 made a pretrial offer to the defendant to settle her action for $85,000 plus party and party costs to be taxed or agreed (para. 1). It is apparent from its terms that the offer was made in reliance on Part 9 of the District Court Rules, which includes r.118(1). The plaintiff has by virtue of the judgment of this Court on 8 September 1995 now obtained judgment in the action for $104,623.56, which is more favourable to her than the amount of $85,000 for which she offered to settle on 5 April 1995. On the face of it, she is therefore entitled to an order under r.118(1) that her costs of the action be fixed on a solicitor and client basis.

It was, however, submitted that the order now sought with respect to the costs of the action should not be made in this instance because the offer to settle contained in para.6 a condition which, it is suggested, made the offer unreasonable. That paragraph is as follows:

"6. If the parties fail to agree to the amount of the Plaintiff's costs within fourteen days after the date of the Plaintiff's acceptance of this offer the Defendant agrees to submit to judgment for the Plaintiff for the Plaintiff's party and party costs to be taxed."

It was said that, at the time the offer was made, it was "attractive" to the defendant or its legal advisers except for para.6, which was described as "too onerous a term to impose upon our client". It should be added that this objection was first raised in a letter from solicitors for the defendant, which is dated 13 September 1995, which was after the judgment was given on the appeal.

We do not consider the condition in para.6 to be unreasonable. The offer to accept $85,000 was made "in full satisfaction of all the plaintiff's claims against the defendant plus the plaintiff's party and party costs on the District Court scale as taxed or agreed". Paragraph 6 added only that if the parties failed to agree on the amount of those costs within 14 days of acceptance of the offer, there should be judgment for the plaintiff for the amount of those costs to be taxed. It is difficult to appreciate how the defendant could be prejudiced by a provision like that in para.6. It would enable the plaintiff after 14 days to obtain a judgment for "costs to be taxed"; but until those costs were taxed and certified, and so ascertained, execution could not issue as on a judgment. See Jones v. Williams (1841) 8 M. & W. 349; 151 E.R. 1073; Widgery v. Tepper (1877) 6 Ch.D. 364, 369; Re Crump (1891) 61 L.T. 799.

The only difference which conceivably could be made by para.6 of the offer is in relation to interest on the amount of the costs when taxed and certified. In Reis v. Carling (1908) 5 C.L.R. 673, the High Court held that interest on a judgment for costs did not begin to accrue until execution issued; but that was because at that time there was no automatic right to interest on a judgment debt except under O.47, r.17, which operates only when the writ of execution issues. Section 73 of the Common Law Practice Act 1867 now confers an independent right to interest at the specified rate on the judgment sum from the date of the judgment or order.

However, even if that has the consequence of displacing the decision on this point in Reis v. Carling, so as to set interest running from the date of the judgment or order on the amount of costs that is later certified to be due, it is something which the legal advisers to the parties knew or might fairly be assumed to know.

The result in the present case would not be to disturb the operation of r.118(1). The amount of the judgment for $104,623.56 with costs of the action, which the plaintiff has now obtained in the action, exceeds by so wide a margin the sum of $85,000 with costs contained in the plaintiff's offer of 5 April 1995 to settle that, even if interest on the taxed party and party costs is included from the date of judgment pursuant to para.6 of the offer, the judgment of $104,623.56 with costs is "no less favourable" to the plaintiff than that offer to settle. On any view, the difference in this case between $85,000 (with party and party costs in an amount to be agreed or in default taxed, and judgment to be entered under para.6 within 14 days after acceptance), and $104,623.56 (with party and party costs to be taxed in due course) is so substantial that it more than caters for the amount of interest likely to be payable under s.73 at the specified rate on those costs for the entire period which, in the ordinary course, might be expected to be occupied in taxing them. The fact that in the District Courts there is a statutory scale of costs, which is what is contemplated by para.1 of the offer to settle, is likely to make the process of taxation considerably less time-consuming than in the Supreme Court. The amount of interest accruing between judgment and certification of the costs would thus be correspondingly reduced.

It follows that nothing has, under r.118(1), been shown to make "another" order for costs the proper order in the circumstances.

As to the costs of appeal, the argument that a successful appellant is entitled under r.118(1), or the equivalent O.26, r.9(1) of the Rules of the Supreme Court, to those costs on a solicitor and client basis in consequence of an offer to settle made pending appeal was considered and rejected by this Court in Tamwoy v. Solomon (App. 76 of 1995). In the present case, it was the plaintiff as appellant who succeeded on the appeal. However, although that represents a difference between this appeal and Tamwoy v. Solomon, it does not affect the reasoning of the Court in that case holding that the rule has no application to proceedings on appeal. Indeed, the justification for not applying r.118(1) to the costs of an appeal in this Court is even stronger in the case of an appeal from a District Court than it is on an appeal from the Supreme Court. There is nothing at all in the District Court Rules to suggest that r.118 ought to govern the incidence of costs in the appellate jurisdiction of this Court.

The order of the Court of Appeal made on 9 September 1995 will be varied by ordering that the defendant pay the plaintiff's costs, fixed on a solicitor and client basis, of and incidental to the action.