Wiles v Millard Shaw Pty Ltd (No 2)
[2021] VSC 714
•29 October 2021
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S ECI 2019 05143
| KELVIN WILES | Appellant |
| v | |
| MILLARD SHAW PTY LTD (ACN 090 126 248) | Respondent |
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JUDGE: | Ginnane J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF JUDGMENT: | 29 October 2021 |
CASE MAY BE CITED AS: | Wiles v Millard Shaw Pty Ltd (No 2) |
MEDIUM NEUTRAL CITATION: | [2021] VSC 714 |
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APPEAL – Magistrate’s orders – Appeal partially successful – Offer of compromise – Appropriate costs orders – Interest on judgment for debt due under a guarantee – Date from which interest should run – Supreme Court Act 1986 s 58.
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr M D Dean | |
| For the Respondent | Mr I Hristovski | JHK Legal |
HIS HONOUR:
On 16 June 2021 I delivered judgment stating that I proposed to allow Mr Wiles’ appeal, to set aside the Magistrate’s orders and in lieu thereof give judgment for Millard Shaw Pty Ltd in the sum of $16,395.20 together with interest and costs to be awarded on a standard basis.[1]
[1]Wiles v Millard Shaw Pty Ltd [2021] VSC 346, [99].
Subsequently the parties made detailed written submissions about interest and costs.[2] I have considered those submissions. These reasons explain the orders that I will make on interest and costs.
[2]The appellant objected to the respondent relying on submissions in reply that were filed a couple of days out of time. However, I accept the explanation given for their late filing and will allow the respondent to rely on those submissions.
On appeal from the Magistrates’ Court, this Court can make such orders as it thinks appropriate, that is to give effect to its judgment.[3]
[3]See s 109(6) of the Magistrates’ Court Act 1989.
Costs of the Supreme Court proceeding
The respondent, Millard Shaw Pty Ltd was substantially successful in the appeal. Mr Wiles succeeded on grounds 5, 6, 7 and 8, being the Hall Chadwick ground and the indemnity costs ground, but not in respect of the other grounds. He did not succeed on the main grounds of the appeal.
The Magistrate’s order required him to pay Millard Shaw $21,428.30 plus interest and indemnity costs. My order requires him to pay $16,395.20 together with interest and standard costs.
Millard Shaw submitted that the Court should award it the costs of the appeal on a standard basis, even though the appellant has been partially successful because that would implement the terms of the agreement between the parties. It submitted that the terms of the agreement made Mr Wiles liable irrespective of the outcome of the appeal. I do not accept this submission. It is contrary to my finding that the agreement did not require the payment of indemnity costs and as a result Millard Shaw was not entitled to all the legal costs that it incurred. At most, it was entitled to standard costs, but with the Court retaining a discretion as to the amount or basis on which costs would be awarded. Moreover the grounds on which Mr Wiles succeeded on appeal were not instances of Millard Shaw not being able to ‘enforce [the] deed (either partly or completely)’[4] as it contends. Rather the Court held that the deed did not entitle it to indemnity costs and that it had not proved that it was liable for Hall Chadwick’s fees.
[4]Clause 11.1(c) of the Deed.
The issues on which each party succeeded in this Supreme Court proceeding are identifiable and I consider, therefore, that the Court should make a costs order on an issues based approach reflecting their success.[5] This exercise is not scientific, but is based on the Court’s general impression and evaluation of the importance of the issues on which the parties succeeded and the time that they occupied.
[5]Chen v Chan (No 3) [2009] VSCA 233 [10(3)-(5)].
In my opinion, Millard Shaw had substantial success on the appeal and should be awarded a substantial part of its costs, but the Court’s order should also reflect the fact that Mr Wiles had some success as well. He succeeded in reducing the judgment sum and in establishing that he was not required to pay Millard Shaw indemnity costs. Taking these matters into account, I consider that Mr Wiles should pay Millard Shaw 70% of its costs of this Supreme Court proceeding on a standard basis.
In my first judgment I stated that I considered that Mr Wiles should pay Millard Shaw’s costs of the Magistrates’ Court proceeding on a standard basis. However, Millard Shaw now relies on its offer of compromise made in that proceeding, so I will next consider it.
The offer of compromise
On 8 May 2017, in the Magistrates’ Court proceeding, Millard Shaw served on Mr Wiles an offer of compromise pursuant to O 26 of the Magistrates’ Court Civil Procedure Rules 2010 (‘Magistrates’ Court Rules’). It offered him $30,000 inclusive of interest and costs. The offer was not accepted. Millard Shaw sought an order under r 26.08 of the Magistrates’ Court Rules that it was entitled to costs of the proceeding in the Magistrates’ Court below, plus 25% of the standard scale basis.
The onus is on Millard Shaw to establish that its offer was a genuine compromise. If that onus is discharged, the next question is whether the judgment obtained is no less favourable than the offer. If it was, the final question is whether the Court should otherwise order than in the terms set out in r 26.08. In that regard the onus lies on Mr Wiles.[6]
[6]Stevens v Spotless Management Services Pty Ltd (No 2) [2016] VSCA 311, [22].
Mr Wiles submitted that the comparator date for interest and costs for the purposes of evaluating an offer of compromise was the date of the offer. He cited the decision of Daly AsJ in Chatham v Coral Park Pre-Training & Breaking Pty Ltd (No 2) (Costs)[7] that supported his submission as to the date when the costs recoverable must be considered.
[7][2021] VSC 44, [9], [30].
So far as interest was concerned, Mr Wiles relied on the provision in r 26.08(5) of the Magistrates’ Court Rules, which provided that when the plaintiff obtained an order for the recovery of a debt which included an amount for interest or damages or by or under any Act, the Court awarded the plaintiff interest or damages in the nature of interest, the Court must disregard so much of the amount recovered by, or awarded to, the plaintiff for interest or damages in the nature of interest as relates to the period after the day the offer of compromise was served.
Mr Wiles contended that the amount of costs that Millard Shaw was entitled to as of the date of the offer of compromise was $3,034.00, and I propose to adopt that figure. Millard Shaw did not provide any evidence contradicting it. Its solicitors’ letter accompanying the offer of compromise said that it was making ‘an allowance of $4,000 for costs, noting that our client would be entitled to claim costs in excess of $4,000 under the relevant Scale of Costs’. However, the affidavit of Millard Shaw’s solicitor contained a chronology of documents filed and court appearances without specifying the costs claimed in respect of them. The chronology extended to 14 May 2019, two years after the office of compromise was served. The affidavit stated that, as at its date, which was 1 July 2021, the solicitor estimated that Millard Shaw’s costs of the proceeding, calculated on a standard basis, would exceed $20,000. It was unclear whether that estimate was of the costs of the Supreme Court proceeding or also of the Magistrates’ Court proceeding, but in any event, there was no real estimate of Millard Shaw’s costs up to the date of the offer of compromise in the Magistrates’ Court.
Mr Wiles calculated the interest he was obliged to pay to the date of the offer of compromise, being the period from 21 June 2016 to 8 May 2017, as $1,393.58. Again I accept that calculation. The solicitors’ letter accompanying Millard Shaw’s offer of compromise stated that its claim included $2,800.08 in interest, calculated as at 5 May 2017, but did not give the commencement date of the calculation.
Therefore, the comparator amount against which to assess Millard Shaw’s offer of compromise of $30,000 inclusive of interest and costs, was $20,822.78. That sum consists of $16,395.20, plus interest of $1,393.58, plus costs of $3,034.00. Applying that comparator amount, Millard Shaw did not achieve a better result than its offer of compromise. It remains the case that Mr Wiles must pay Millard Shaw’s costs of the Magistrates’ Court proceedings on a standard basis and those costs must be on the appropriate Magistrates’ Court scale.
If the parties cannot agree on the amount of the Supreme Court costs or the Magistrates’ Court costs, they must be assessed by the Costs Court. It is not appropriate for a judge to attempt to assess those costs.
Interest
Millard Shaw claims interest under s 58 of the Supreme Court Act 1986 (‘Supreme Court Act’). Under that section it is entitled to interest from the date on which demand was made for the sum owing by Mr Wiles under the guarantee. The evidence suggests that the demand should be treated as made on 21 June 2016. Millard Shaw’s submissions sought interest in the amount of $8,192.22 , but in its reply submission claimed interest in the amount of $8,633.72 from 15 March 2016, the date when the sum was advanced until 6 June 2021, although that date may have been intended as 16 June 2021, the date of my first judgment. I consider that its first approach is correct and that interest commenced to run from the date of Millard Shaw’s demand which I find was 21 June 2016. This follows from the terms of s 58 of the Supreme Court Act.
I do not accept Mr Wiles’ submission that interest should only run from the date the proceeding was issued in the Magistrates’ Court on 16 September 2016 until the date of the Magistrates’ Court judgment on 10 October 2019. In the circumstances of this case, interest continued to accrue while the appeal was before this Court. When the Court varies a judgment appealed from, it is open to the Court on appeal to calculate interest down to the date of the judgment.[8] That is the appropriate course to follow, not least because the Magistrate did not fix the amount of interest to be awarded and, in any event, I have now reduced the amount of the judgment awarded by the Magistrate. From the date of my judgment, the judgment debt carries interest pursuant to s 101 of the Supreme Court Act. The apparent effect of Mr Wiles’ submissions would be that Millard Shaw would not receive any interest for the period from 10 October 2019 until the case was decided by this Court.
[8]See State of Victoria v McIver (No 2) [2005] VSCA 126, [3]. See also G.E.F. Packaging Services v Turner [1995] VSC 191 (Court of Appeal). While these cases concern the calculation of interest under s 60 of the Supreme Court Act, the same reasoning is applicable to the calculation of interest under s 58.
I accept that interest is payable from 21 June 2016 to 16 June 2021 in the sum of $8,126.84. In the exercise of the Court’s discretion, I consider 16 June 2021 to be the appropriate cut off point for interest to be awarded under s 58 of the Supreme Court Act. A judgment debt carries interest under s 101 of the Supreme Court Act.
I therefore order:
1.The appeal be allowed on grounds 5, 6, 7 and 8.
2.The order of the Magistrates’ Court of 10 October 2019 in Case No G 12564074 be set aside.
3.There be judgment for Millard Shaw Pty Ltd against Kelvin Wiles in the sum of $24,522.04, including interest in the sum of $8,126.84.
4.The appellant pay the respondent 70% of its costs of and incidental to this appeal on a standard basis to be assessed by the Costs Court in default of agreement.
5.The appellant pay the respondent’s costs of and incidental to the proceedings in the Magistrates’ Court, in case No G12564074, on a standard basis on the appropriate Magistrates’ Court scale to be assessed by the Costs Court in default of agreement.
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