T&DC Pty Limited v Workforce Clothing Pty Limited (No 3)

[2016] NSWSC 1892

Supreme Court

New South Wales

Medium Neutral Citation:	T&DC Pty Limited v Workforce Clothing Pty Limited (No 3) [2016] NSWSC 1892
Hearing dates:	Application determined on the papers
Decision date:	22 December 2016
Jurisdiction:	Common Law
Before:	McCallum J
Decision:	Application for order that interest on costs be paid from date on which costs paid to legal representatives refused
Catchwords:	COSTS – application for interest on costs – date from which to be paid
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 101(4)
Cases Cited:	Spedding v Nobles (No 2) (2007) NSWCA 87
Category:	Costs
Parties:	T & DC Pty Limited (plaintiff) Workforce Clothing Pty Limited (defendant)
Representation:	Counsel: C Alexander (plaintiff) D Tynan (defendant)   Solicitors: Bull, Son & Schmidt Lawyers (plaintiff) Rockwell Olivier (Perth) Pty Ltd (defendant)
File Number(s):	2014/136181

Judgment

1. HER HONOUR: The plaintiff in these proceedings brought an appeal against a decision of the Local Court. In the proceedings below, the Court gave judgment for the defendant and ordered the plaintiff to pay the defendant’s costs as assessed on the ordinary basis up to a certain date and on an indemnity basis thereafter (excluding a particular costs order).

2. I dismissed the appeal with costs: T&DC Pty Ltd v Workforce Clothing Pty Ltd [2015] NSWSC 1731. The defendant then sought an opportunity to apply for indemnity costs, relying on a Calderbank letter. I rejected that application, confirming the order made upon publication of the judgment that the plaintiff pay the defendant’s costs as agreed or assessed on the ordinary basis: T&DC Pty Limited v Workforce Clothing Pty Limited (No 2) [2016] NSWSC 239.

3. It has been drawn to my attention that, in the judgment as to costs, I omitted to deal with an application for interest on costs. This judgment determines that application.

4. Paragraph 23 of the defendant’s submissions said:

The defendant has paid all of its legal representative’s costs in these proceedings and in the proceedings in the Court below. In respect of both of these proceedings the defendant has been out of pocket for a significant period of time. The defendant seeks an order for interest on costs pursuant to s 101(4) of the Civil Procedure Act 2005 (NSW): Spedding v Nobles (No 2) (2007) NSWCA 87.

5. The plaintiff’s written submissions were silent as to that aspect of the defendant’s application.

6. The defendant’s reliance on s 101(4) appears misconceived; that section has been amended since the decision in Spedding (No 2). The judgment records that the relevant provisions at that time were in the following terms:

“(4)   The court may order that interest is to be paid on any amount payable under an order for the payment of costs.

(5)   Interest under subsection (4) is to be calculated, at the prescribed rate or at such other rate as the court may order, as from:

(a)   the date or dates on which the costs concerned were paid, or

(b)   such later date as the court may order.”

7. Basten JA considered that the power to pay interest “from the date on which the costs were paid” presumably meant the date on which they were paid by the client to his or her legal representative.

8. Section 101 now provides:

(4)   Unless the court orders otherwise, interest is payable on an amount payable under an order for the payment of costs.

(5)   Interest on an amount payable under an order for the payment of costs is to be calculated, at the prescribed rate or at any other rate that the court orders, as from the date the order was made or any other date that the court orders.

9. Under the current provision, since I did not “order otherwise”, interest is payable on the amount payable under the order I made in my earlier judgment. The issue raised by the defendant’s application is whether that liability is to be calculated from the date the order was made or, as the defendant asks, from the date on which the costs were paid by the defendant to its legal representatives. Accordingly, the defendant’s application is, more properly, an application under s 101(5), not 101(4).

10. The decision in Spedding (No 2) does not address the current version of the section. However, I accept that the current provision confers a discretionary power to award interest on costs incurred and paid during the proceedings. The power is discretionary and does not appear to require the establishment of special circumstances; conversely the section does not appear to contemplate that such an order will be there for the asking.

11. The disproportionality between costs and the interest at stake in these proceedings, and the manner in which the Local Court should properly address that perennial problem, was at the heart of the issue raised by the appeal. The defendant’s application gives me little to go on, in determining the application, beyond the assertion that the lawyers were paid as they went. In all the circumstances, I am not persuaded that interest should be paid by the plaintiff from “any other date” than from the date the order was made.

12. It follows that no further order is required to be made.

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