Wentworth v Rogers (No. 1)

[2002] NSWSC 651

CITATION:	Wentworth v Rogers & Anor (No. 1) [2002] NSWSC 651
FILE NUMBER(S):	SC 019228/82
HEARING DATE(S):	28/11/01, 05/04/02
JUDGMENT DATE:	20 August 2002
PARTIES :	Katherine Wentworth v Gordon John Rogers & Anor
JUDGMENT OF:	Howie J at 1

COUNSEL :	Plaintiff in person Defendant in person
SOLICITORS:	- -
CATCHWORDS:	Costs - Jurisdiction - Interest on costs
LEGISLATION CITED:	Supreme Court Act 1970 - ss 76, 95 Supreme Court Rules - rule 3 part 40, part 52 div 5 Legal Profession Act 1987 - clause 45 schedule 8, part 11 divs 5 and 6, s 190 Legal Profession Regulation 1994 - clause 80
CASES CITED:	Minister Administering the Environmental Planning and Assessment Act 1979 v Carson (1994) 35 NSWLR 342 McWilliams Wines Pty Ltd v Liaweena (NSW) Pty Ltd (1993) 32 NSWLR 190 Grogan v Thiess Contractors Pty :Ltd [2000] NSWSC 1101 Woods v Woods [2001] NSWSC 1108 GIO of NSW v Healey [No. 2] (1991) 22 NSWLR 380 Wentworth v Wentworth (NSWCA, unreported, Handley JA, 4 December 1998)
DECISION:	The application is dismissed and no order is made as to costs.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Howie J

TUESDAY 20 AUGUST 2002

019228/82 KATHERINE WENTWORTH v GORDON
JOHN ROGERS & ANOR
JUDGMENT ON APPLICATION FOR INTEREST ON COSTS NO 1

1 His Honour: By Amended Notice of Motion Ms Wentworth seeks interest on costs awarded in her favour as long ago as 1994. The litigation in which the order was made has a long and involved history which it is unnecessary to set out for the purpose of this judgment. The costs order was made after a hearing before a jury of a claim for damages brought by Ms Wentworth against Mr Rogers as a result of which Ms Wentworth received judgment in her favour and a modest amount of damages. On 24 June 1994 Sully J ordered that Mr Rogers pay one half of Ms Wentworth’s costs as assessed.

2 On 10 March 1995 Mr Rogers obtained a stay of the execution of the order for costs pending an appeal against the judgment in respect of which the order for costs was made. There were numerous interlocutory hearings and consequential orders made pending the hearing of the appeal. In effect that stay remained in place until 23 March 1998. On that date Handley JA stayed the execution of the costs order until further order of the Court but stated that the stay was not to prevent Ms Wentworth completing the assessment of those costs. Ms Wentworth had made an application for an assessment in September 1997 but Mr Rogers objected to the application because of the stay in force.

3 On 9 November 1998 a Certificate as to Determination of Costs issued from an assessor for the sum of $123,015.85.

4 On 7 December 1998 the matter was before the Court of Appeal once more and on that day the Court extended the existing stay until fourteen days after the delivery of the Court’s reserved judgment or until further order. The Court handed down its judgment on 29 October 1999. No further order was sought in respect of the stay and it expired 14 days thereafter, that is on 12 November 1999.

5 On 29 June 2000 Ms Wentworth, by filing the Certificate in this Court’s Registry, obtained a judgment for the sum of $123,015.85, that judgment to take effect from 27 March 2000.

6 During the period in which the costs order was stayed, there was further litigation between the parties that was heard by Sperling J. The result of that proceeding was that Mr Rogers was successful and a costs order was made in his favour against Ms Wentworth. That order has been the subject of an appeal by Ms Wentworth and there is a pending special leave application before the High Court.

7 The present application was heard by me together with another Notice of Motion seeking interest on a further costs order made in Ms Wentworth’s favour against Mr Rogers and other interlocutory applications related to the ongoing litigation between these parties. Ms Wentworth represented herself during these hearings. Initially Mr Rogers was legally represented and written submissions were placed before the Court on his behalf in respect of each of the matters that were to be determined by me. However, during the course of these hearings Mr Rogers ceased to retain his legal representatives. As he lives in the far north of Queensland he chose not to attend the Court but wrote indicating that he wished the matters to be determined in his absence taking into account the written submissions which had been filed on his behalf.

8 After receiving evidence by way of affidavit from Ms Wentworth and her oral and written submissions in November last, I reserved the matter for judgment.

9 Before I was in a position to deliver judgment, Mr Rogers and Ms Wentworth appeared before me on the hearing of proceedings brought by Ms Wentworth against Mr Rogers and his wife. As Mr Rogers was then before me in person, I determined to re-open this matter to give him the opportunity of putting material and submissions before me relevant to the application. The parties were again unrepresented. Mr Rogers made some brief submissions and Ms Wentworth responded. I once again reserved judgment, subject to Ms Wentworth providing me with further material in amplification of the somewhat complicated history of the matter. Mr Rogers indicated he had no objection to that course. This material was provided to me on 8 July last.

10 The relevant sections of the Supreme Court Act are as follows:

76 Costs
(1) Subject to this Act and the rules and subject to any other Act:
(a) costs shall be in the discretion of the Court,
(b) the Court shall have full power to determine by whom and to what extent costs are to be paid, and
(c)………………………
95 Interest on debt under judgment or order
(1) Where judgment is given or an order is made for the payment of money, interest shall, unless the Court otherwise orders, be payable at the prescribed rate from the date when the judgment or order takes effect on so much of the money as is from time to time unpaid.
(2)……………
(3) Notwithstanding subsection (1), where, in proceedings for damages on a common law claim, the Court makes an order for the payment of costs and the costs are paid within twenty-one days after ascertainment of the amount of the costs by assessment under Division 6 of Part 11 of the Legal Profession Act 1987 or otherwise, interest on the costs shall not be payable under subsection (1) unless the Court otherwise orders.
(4) If an order is made for the payment of costs, the Court may order that interest is to be paid on the amount so ordered, at the prescribed rate referred to in subsection (1), from the date or dates when the amount in respect of costs was duly paid.

11 Part 40 of the Supreme Court Rules is concerned with judgments and orders of the Court. Rule 3 of Part 40 is as follows:

Date of effect
3(1) A judgment shall take effect -
(a) where it is given in Court - as of the date on which it is given;
(b) otherwise -- as of the date of entry.
(2)…………..
(3) Subject to subrule (1) an order shall take effect as of the date on which it is made.
(4) Notwithstanding subrules (1) and (3), where an order of the court directs the payment of costs and the costs are, pursuant to any Act or the rules, to be taxed, the order shall take effect as of the date of the certificate of taxation.
(5) Notwithstanding subrules (1), (3) and (4), the Court may order that a judgment or order take effect as of the date earlier or later than the date fixed by those subrules.

Clause 45 of Schedule 8 of the Legal Profession Act 1987 provides:

45 Superseded references to taxation of costs
On and from the commencement of Part 11, as substituted by Schedule 3 to the Legal Profession Reform Act 1993 , a reference in any Act or other instrument (however expressed) to the taxation of costs is taken to be a reference to the assessment of costs under Division 6 of Part 11.

12 These provisions have been considered in relation to the power of the Court to order the payment of interest on costs and the following propositions appear to me to represent the present state of authority:

(i) An order for the payment of costs generally takes effect from the date the order is made and not from the date that costs are assessed: Minister Administering the Environmental Planning and Assessment Act 1979 v Carson (1994) 35 NSWLR 342. This is so where costs are not to be taxed or assessed, such as where the amount of costs is agreed between the parties, cf Pt 40 r 3(4) above.
(ii) Sections 95(3) and 95(4) do not diminish or restrict the power of the Court to make an order under s 76 for the payment of interest in respect of a period before the making of the costs order where the successful party has made payment on account of costs; McWilliams Wines Pty Ltd v Liaweena (NSW) Pty Ltd (1993) 32 NSWLR 190; Grogan v Thiess Contractors Pty Ltd [2000] NSWSC 1101; Woods v Woods [2001] NSWSC 1108.
(iii) An order for interest on costs can be made under s 76 in respect of a period preceding the making of the order for costs even though the successful party has not made any payment on account of costs: Woods v Woods , above.
(iv) Pt 40, r 3(5) allows the Court a degree of flexibility to do what is just in the particular case where the usual position would produce unfairness; GIO of NSW v Healey [No 2] (1991) 22 NSWLR 380 at 387. The rule can be applied even though the successful party has made no payment in relation to costs: Wentworth v Wentworth (NSWCA, unreported, Handley JA, 4 December 1998).

13 It should now be noted that Part 11 Division 6 of Legal Profession Act 1987 commenced operation on 1 July 1994. The order for costs was made by Sully J on 24 June 1994. The application for assessment of costs was made by Ms Wentworth in September 1997. Clause 80 of the Legal Profession Regulation 1994 provides:

80. Bills or orders before 1 July 1994
(1) This clause applies to costs which were the subject of a bill given to a client (or which were the subject of an order of a court or tribunal made) before 1 July 1994.
(2) The former taxation provisions continue to apply (and new Part 11 of the Act does not apply) in respect of costs if application is made before 1 July 1995, whether for the taxation or assessment of the costs.
(3) If, however, application is made on or after 1 July 1995 (whether for the taxation or assessment of the costs), the costs are to be assessed in accordance with new Part 11 of the Act. However, the former taxation principles apply to any such assessment and that Part is to be construed accordingly.


Clause 71 of that Regulation contains the following definition:

"former taxation principles" means any principles that were applied in the taxation of costs before 1 July 1994 (including any relevant scales and determinations).

Part 52 Division 5 of the Supreme Court Rules provides the basis for taxation under Part 11 Division 5 of the Legal Profession Act 1987 ,
r 32(1).

14 Section 190 of the Legal Profession Act 1987 provides:

190. Interest on outstanding costs
(1) A barrister or solicitor may charge interest on the unpaid costs for legal services provided by the barrister or solicitor, if the costs are unpaid 30 days or more after the barrister or solicitor has given a bill of costs for those services in accordance with this Division.
(2) A barrister or solicitor may not charge interest on the unpaid costs for legal services unless the bill of costs for those services contains a statement that interest is payable and of the rate of interest.
(3) A barrister or solicitor may also charge interest on the unpaid costs for legal services in accordance with a costs agreement.
(4) A barrister or solicitor may not charge interest under this section or under a costs agreement at a rate that exceeds:
(a) except as provided by paragraph (b)---the rate prescribed under the Supreme Court Act 1970 in respect of unpaid judgments of the Supreme Court, or
(b) the rate prescribed by the regulations.

15 In her written submissions, Ms Wentworth states that she has not paid any money by way of fees to her legal representatives in respect of the matter for which she was given the benefit of the costs order. They acted on a contingency basis. She states that those representatives “have been held out of their costs by the actions of the defendant since 1994”. She further states that, “the plaintiff and her legal representatives have been kept out of their monies from 24/6/94 and the defendant has had the benefit and use of those monies from that date”.

16 There is no evidence before me of what was the agreement, if any, between Ms Wentworth and her legal representatives as to the payment of interest on those costs. I know nothing about any bill of costs rendered to Ms Wentworth by those representatives. I do not know to what extent Ms Wentworth is out of pocket or how she would be prejudiced in a real sense if the application was refused.

17 The normal rule is that the order takes effect from the date of taxation (now assessment), in this case 9 November 1998. Although I have a discretion to order that the order for costs take effect at an earlier date, I do not believe such an order is justified in the present case. A stay of orders while an appeal is being determined is a normal part of the process of litigation. I do not see why in the present case the fact that a stay was granted in respect of the order for costs requires or justifies that an earlier date be chosen for the operation of the costs order than that which applies in the normal case. This notwithstanding the delays that occurred in the hearing of the appeal. The usual justification for such an order, that the successful party is out of pocket by the payment of costs, does not pertain to the present case.

18 Although I have power to make an order that interest run from the date of the order for costs or from an earlier date this does not seem to me to be warranted in the present case. Ms Wentworth has relied upon the decision of Hamilton J in Wood v Wood above. In that case his Honour made an order that interest run from a date antecedent to the order for costs, even though the costs had not been paid by the successful party. But that was an unusual and quite extraordinary case determined on its own facts. The successful party was impoverished by reason, at least in part his Honour found, by the actions of the unsuccessful party. There was evidence before his Honour of the arrangements made between the legal representatives and the successful party that included the payment of interests on costs, “from the time a successful outcome was manifest”. His Honour found that arrangement to be a perfectly fair one.

19 There is nothing before me that would justify such an order as was made by Hamilton J or any other order displacing the normal operation of the relevant statutory or other provisions.

20 The application is dismissed. I make no order as to costs.

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Last Modified: 08/22/2002