OSBORNE v KELLY AND KLIMENKO No. SCCIV-80-2716 [2001] SASC 260

The plaintiff appealed by leave to the Full Court. On 12 November, 1999, the appeal was allowed and the court made the following orders:

2. The order of the Honourable Justice Perry dated the 16th June 1999 dismissing the application for a review of the ruling of the taxing master with respect to interest be set aside.

3.2 The decision of the taxing master be set aside;

3.3 The matter of interest be remitted to the taxing master for further consideration in light of the reasons of the Full Court;

3.4 The defendant pay to the plaintiff his costs of the application.

4. There be no order as to the costs of the Appeal to this court."

When handing down his judgment in the matter (with which Mullighan and Wicks JJ concurred), the Chief Justice made the following remarks:

"... I would allow the appeal but to make it clear on what basis, I will just read two paragraphs from my reasons:

'I first of all reached the conclusion that none of the matters relied upon by the plaintiff establish a principle or rule within the present case require an order for interest run from the date of the judgment or from an earlier date. However, while I found no fault in the taxing officer's general approach to the question of interest, the exercise of the taxing officer's discretion requires reconsideration having regard to the fact the plaintiff had paid some of the costs from his judgment moneys and on the basis that the defendant had fair notice of the costs claimed by the plaintiff about a year earlier than the taxing officer realised ..."

The learned Chief Justice then said that he proposed that the appeal should be allowed to enable the taxing officer to reconsider the question of interest in the light of "those two matters".

There was an application on the part of the plaintiff for special leave to appeal to the High Court against the decision of the Full Court but that application was refused.

The matter was referred back to the Master who heard submissions of counsel and made the following orders on 13 December, 1999:

1. In accord with the directions of the Full Court by order dated 12 November 1999, the plaintiff recovered by way of interest on the costs in accord with the reasons of the Full Court the sum of $47,509.54 in lieu of $18,530.09, viz an additional $28,979.45.

2. Order take effect as if an allocatur issued on and from the 3rd September 1998 to the intent that the plaintiff recover interest thereon on the additional sum of $28,979.45 thereafter at the rate set out in the Third Schedule to the Supreme Court rules viz at the rate of 7% per annum viz $2,660.67 so that the plaintiff is to have an additional $31,640.12.

3. The defendant pay the plaintiff's costs of and incidental to this application and hearing.

5. The parties may apply for further orders and directions in the event that the High Court reviews the ruling of the Full Court."

The learned Master overlooked the giving of reasons for his order. After an approach to the Master by the parties, he published the following reasons on 15 June, 2000:

"I have been remiss in this matter. Since it was referred back I have heard further argument and made a further order without giving written reasons simply because I overlooked the rule on this occasion. Suffice to say I heard further argument on 13 December 1999. I was aware of and influenced by remarks of the Chief Justice and particularly at Para 59 of his reasons. As I say, having heard further argument I thought those remarks to be quite as valid as when they were originally made and that I should reconsider the date upon which the defendant was on notice ie had in its possession a bill of costs which at least substantially provided notice of the amount claimed, and then fix a date, given that knowledge, from which interest should run. I did this including fixing 15 April 1993 as the appropriate date.

It seemed to me that to give the defendant a month's 'grace' to respond was not unreasonable. This resulted in my order of 13 December 1999 and the mathematical calculations and alterations thereon.

I might add I am yet again being pressed to reconsider. Whether that is the appropriate course is a matter of disputation but the parties agree that any such reconsideration is better dealt with by a judge. Exactly which judge is, too, a matter of contention. To resolve this aspect I refer any recommendation to the chamber judge but only to be set down for hearing, if at all, subsequent to the High Court determining the pending application for leave to appeal the Full Court's decision."

On 14 December 1995, the solicitors for the defendants filed a notice seeking reconsideration of the Master's order pursuant to r 101.19 of the Supreme Court Rules. I do not believe that r 101.19 is applicable in this case in view of the fact that the matter of interest has been remitted by the Full Court to the learned Master for further consideration in the light of the reasons of the Full Court. His authority to act is pursuant to the order of the Full Court and not pursuant to the provisions of r 101. In my view, the Master has long since become functus officio in relation to r 101 but clearly has a responsibility to fully carry out the terms of the order of the Full Court dated 12 November 1999 as to the calculation and payment of interest on taxed costs.

In my opinion, the brief reasons given were insufficient to enable the questions referred to the learned Master by the Full Court to be properly and fully answered. A full answer would include detailed particulars of the period or periods over which interest is charged including specification of the day or days from which and to which interest is calculated.

Although I consider the Notice Seeking Reconsideration pursuant to r 101.19 of the Supreme Court Rules to be inappropriate in the circumstances, nevertheless the content of that document would appear to voice the defendants' complaint, although such document must be read subject to the terms of the order of the Full Court.

The failure of a Judge or Magistrate to give adequate reasons for his decision is an error of law: Papps v Police [2000] SASC 183; [2000] 77 SASR 210 at p 218.

In my view, the appropriate course of action open to the defendants at this stage is to make application to the learned Master to set aside his order of 13 December 1999 relying on r 3.04(f) and r 84.12 of the Supreme Court Rules. Such an application would need to be accompanied by an affidavit fully setting out the circumstances and giving a satisfactory explanation for delay other than delay on the part of the Court. Either r 3.04(f) or r 84.12 should apply in this case. The order concerned is not a final order and there may yet be a need to obtain a further order from the Court although one can only hope that this will be the end of the matter.

If the matter is re-opened, it can be fully argued before the Master. In those proceedings, the Master will be in a position to exercise the discretion which he has in the matter and which the Chief Justice recognised in the passage from his reasons which I have quoted above. If the Master refuses to act or a party is dissatisfied with the Master's decision, the party aggrieved can proceed by way of appeal to a single Judge. There would need to be an application for leave to appeal and for an extension of time required for that purpose. An application should be made to the Master in the first instance and an appeal should only proceed if the application to set aside the order is refused by the Master or a party is dissatisfied with his decision.

There is, of course, a difficulty with an appeal. The evidence before the Judge on the appeal is limited to the evidence before the Master unless leave is granted to permit additional evidence to be adduced. If, therefore, any further material is required to be placed before the Court, this should be attended to on the hearing before the Master rather than on the hearing of the appeal.

I am posting a copy of these reasons to the solicitors for the parties. My Associate will be in touch with them in a few days to arrange an appointment to further consider the matter.