VISCARIELLO v MACKS (No 9)

[2012] SASC 132

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

VISCARIELLO  v  MACKS (No 9)

[2012] SASC 132

Reasons of Judge Lunn a Master of the Supreme Court

1 August 2012

PROCEDURE - COSTS

Costs order in favour of respondent solicitors who had acted for themselves - costs adjudicated - claim for pre-allocatur interest under s 114(2)(b) of the Supreme Court Act 1935 on the costs from the time the work was done - held pre-allocatur interest not allowable to solicitors acting in person on this ground - some pre-allocatur interest allowed, as plaintiff had delayed the completion of the adjudication.

VISCARIELLO  v  MACKS (No 9)
[2012] SASC 132

JUDGE LUNN:

Reasons on application for pre-allocatur interest on the adjudicated costs of Minter Ellison

1. The background of the matter is set out in my Reasons No 7.[1]  The costs payable by the plaintiff to Minter Ellison (“Minters”) have been cast at $13,107.91 including disbursements, but not including the taxing fee or any GST.[2]  Minters have applied for interest to be included in the allocatur from the date on which the costs order was made on 27 October 2010.  The allowance of any pre-allocatur interest was opposed by the plaintiff.

   [1] 16 March 2012, [2012] SASC 41.

   [2]    No GST has been claimed by Minters and I therefore make no further reference to it in these Reasons.

2. Section 114 of the Supreme Court Act 1935 (“the Act”) provides:

   (1)All money, including costs, payable under any judgment or order shall bear interest at the rate from time to time prescribed by the rules of court.

   (2)The interest shall be computed from the following times:

   …

   (b)in the case of taxed costs, from the date of the certificate of the taxing officer by whom the costs were taxed or an earlier date specified by the taxing officer in the certificate.[3]

   [3]    The certificate in sub-s (b) is called an allocatur in these Reasons.

3. Whether any pre-allocatur interest is to be allowed is to be determined by the exercise by the taxing officer of a broad judicial discretion by reference to the relevant circumstances of the case.[4]

   [4]    Osborne v Kelly, (1999) 75 SASR 392 at [22].

4. If the party in whose favour the costs are ordered has paid them to their solicitor, or, if unpaid, there is a contractual liability to pay interest to the solicitor on the unpaid costs until they are paid, that is a strong discretionary factor in allowing pre-allocatur interest.[5]  However, here Minters were the non‑party against which the 6R 146 application was brought by the plaintiff and they represented themselves on the application.  They were entitled under the order for costs to recover costs as if they had performed the work for a client.[6]  However, no authority was cited, and I am not aware of any, about whether solicitors who act for themselves should be treated as having paid the costs to themselves for their work so as to be entitled to pre-allocatur interest on those costs.  As a matter of principle I do not consider that they should be treated as if they had paid the costs to themselves.  If solicitors acting for a client are prepared to wait for payment of their costs until those costs are recovered from another party, and do not include a term in their retainer agreement with their client obligating the client to pay interest on the costs until they are paid, those solicitors are not entitled to recover interest on their costs before their payment either from their own client or from another party liable to pay them.[7] If here Minters had retained other solicitors to act for them, and those solicitors had not required payment of the costs from Minters or imposed an agreement for interest, no interest would be awarded under s 114(2)(b). Minters should not be in any better position because they acted for themselves. Accordingly, I am not prepared to allow them interest merely because they have had to wait for payment until the allocatur is issued and executed upon. There was no evidence here that Minters incurred any liability for interest on any monies represented by the costs for the work which they did. It may be arguable that if their business was operating on an overdraft or the like, the interest on the overdraft attributable to the costs in question could be treated as a factor in favour of an award of pre‑allocatur interest. However, the issue does not arise here and I need not decide it.

   [5]    Osborne v Kelly; above; Public Trustee v Newman, Full Court, 8 March 2012, [2012] SASCFC 18.

   [6]    Civil Procedure South Australia [6R 264.10].

   [7]    Osborne v Kelly, above.

5. In Osborne v Kelly above at [66] the Chief Justice said:

   If the defendant has been guilty of delay, or of an unreasonable approach to the taxation of costs, the taxing officer might well fix a date earlier than the date of the certificate from which interest is to run.

6. As stated in my Reasons No 7, the plaintiff’s failure to agree any item in the short form claim did not assist in the economic and expeditious quantification of the costs.  As also dealt with in those Reasons, in seeking to inspect relevant papers of Minters, and in unsuccessfully raising an issue about a lack of an opportunity to make a proper offer, the plaintiff significantly delayed Minters in completing this adjudication.  For these reasons, it is proper to exercise the discretion of the Court to allow interest to Minters for being kept out of the costs for the period in which the unreasonable conduct of the plaintiff has delayed the issue of the allocatur. 

7. My jurisdiction under s 114(2)(b) of the Act is only to fix a date from which pre-allocatur interest is to run.[8] There is no equivalent to s 30C(3) of the Act allowing the Court to fix a lump sum in lieu of pre-judgment interest. However, a broad-axe approach is permissible in fixing the date.[9]  I fix the date at 1 February 2012, which in the normal course should have been the date by which the processes of my adjudication should have been completed.

   [8]    Osborne v Kelly, above, at [68].

   [9]    Osborne v Kelly, above, at [36].

8. I have today made the following orders:

   1Interest at the rate specified in 6R 261 is to be allowed on the whole of the costs and disbursements in the allocatur, other than the taxing fee.

   2I direct the Registrar to calculate the amount of that interest in accordance with these Reasons and to include it in the allocatur.

   3Costs of the argument on interest to be paid by the plaintiff to Minter Ellison.