Southern Equity Pty Ltd v Timevale Pty Ltd

[2015] NSWSC 2014

Supreme Court

New South Wales

Medium Neutral Citation:	Southern Equity Pty Ltd v Timevale Pty Ltd [2015] NSWSC 2014
Hearing dates:	11 March 2015
Date of orders:	11 March 2015
Decision date:	11 March 2015
Jurisdiction:	Equity
Before:	Brereton J
Decision:	Order as to interests on costs made.
Catchwords:	COSTS – interest on costs – party who obtains costs ordinarily entitled to order for interest also – absence of countervailing discretionary factors – costs of motion seeking order for interest – where motion brought after costs order made
Legislation Cited:	(NSW) Civil Procedure Act 2005, s 101(4) (NSW) Uniform Civil Procedure Rules 2005, r 36.7(1)
Cases Cited:	Grace v Grace (No 9) [2014] NSWSC 1239 Wood v Inglis [2010] NSWSC 749
Category:	Costs
Parties:	Southern Equity Pty Ltd ACN 003 364 985 (plaintiff) Timevale Pty Ltd (defendant)
Representation:	Counsel: T Fishburn (plaintiff) C Harris SC (defendant) Solicitors: Melbourne Legal Chambers (plaintiff) Matthews Folbigg (defendant)
File Number(s):	2008/280635

Judgment (ex tempore)

1. HIS HONOUR: On 11 February 2015, I made orders finally, it was hoped, disposing of these proceedings, including (after argument), costs orders as follows:

1. The plaintiff pays the defendant's costs of the proceedings in the Federal Court, other than the costs of filing and serving the initiating process.

2. The defendant pay 25% of the plaintiff's costs of the proceedings in this Court up to and including 5 May 2012, and of the costs of filing and serving the initiating process in the Federal Court.

3. The defendant pay the plaintiff's costs of the proceedings in this Court since 5 May 2012, provided that the plaintiff be entitled to recover the costs of preparing and otherwise in connection with a single notice of objections, surcharges and falsifications only.

2. At that time, the defendant foreshadowed that it might make an application for interest on costs pursuant to the (NSW) Civil Procedure Act 2005, s 101(4). By notice of motion filed on 5 March 2015 and returnable today, the defendant seeks an order pursuant to s 101(4) that the plaintiff pay to it interest on the costs payable by it to the defendant pursuant to order 3 of 11 February 2015 at the rate set out in (NSW) Uniform Civil Procedure Rules 2005, r 36.7(1). The plaintiff has not submitted that such an order should not be made, but submits that such an order should also be made in respect of the costs orders in favour of the plaintiff against the defendant.

3. For reasons elaborated in detail in Grace v Grace (No 9) [2014] NSWSC 1239, in my view, as expressed at [66] of that judgment:

…a party who obtains a costs order will ordinarily – in the absence of any countervailing discretionary factor – also obtain an order for interest on those costs, if it seeks one, and evidence of payment of the costs is not required; nor is evidence explaining the course of the proceedings.

4. No countervailing discretionary factor having been identified – either in respect of the costs order in favour of the defendant, or in respect of the costs orders in favour of the plaintiff I propose to make such an order, although it will be in a slightly different form from that proposed in the short minutes, in order to reflect the practice I have adopted in cases such as Wood v Inglis [2010] NSWSC 749, [21].

5. The defendant seeks an order that the plaintiff pay the defendant's costs of the motion. The plaintiff submits that each party should bear its own costs of the motion.

6. The practical outcome of the motion is that each party will obtain an interest on the costs order under s 101(4). Although the defendant appears confident that on balance the costs orders will significantly favour it rather than the plaintiff, there is no evidence before the Court that establishes that to be so, and the Court is really in the position that it does not know where the net benefit of the costs orders will lie.

7. Although I have held [in Grace v Grace (No 9)] that an application for interest on costs may be made after the relevant costs order, the Court encourages such applications to be made when the question of costs is itself debated, in order to avoid the costs of additional applications. As it seems to me, that factor, coupled with the circumstance that the motion will result in an order in favour of both parties, supports the conclusion that neither party should bear the other’s costs of this motion.

8. I had considered whether it would be better to make costs of the motion costs in the proceedings; but given the structure of the costs orders, that would then beg the question which phase of the proceedings it related to, and would create further difficulties of apportionment.

9. Accordingly there will be no order as to costs of the motion.

10. The Court therefore orders that:

1. Interest is to be paid on any amount payable under the costs orders contained in orders 1, 2 and 3 made on 11 February 2015 as follows:

1. Interest shall be payable on that proportion of each amount of costs and disbursements allowed on assessment which were actually paid by the costs creditor, which the total amount of costs and disbursements allowed on assessment to the costs creditor under the relevant costs order bears to the total amount of costs and disbursements which the costs creditor has paid or was liable to pay as between practitioner and client incurred in connection with these proceedings;

2. Interest shall be payable at the pre-judgment interest rates referred to in (NSW) Uniform Civil Procedure Rules 2005, rule 36.7, from the date of payment by the costs creditor of each amount of costs and disbursements actually paid by it until the costs debtor has paid the amount due to the costs creditor under any costs order made in these proceedings or any further order made in these proceedings;

3. For the purposes of this order, the costs creditor is the party having the benefit of the relevant costs order and the costs debtor is the party liable to pay costs under the relevant costs order in these proceedings.

2. There be liberty to apply in the event of any difficulty arising in the implementation of this order.

3. There be liberty to the costs creditor to apply on seven days' notice to the costs debtor for an order for payment of a specific amount in respect of interest awarded pursuant to order 1.

4. There be no order as to the costs of the notice of motion of 5 March 2015 to the intent that each party bear its own costs.

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Decision last updated: 18 February 2016