Pham v Enterprise ICT Pty Ltd and Others; Pham v Sebie

EX TEMPORE Judgment

This is my twelfth, but the Court's thirteenth judgment, in this matter since Pembroke J's 2017 hearing of these proceedings. It is not necessary to set out all of the prior judgments. Since my eleventh and last judgment on 20 February 2019 (Pham v Enterprise ICT Pty Ltd and Others; Pham v Sebie (No. 11) [2019] NSWSC 115), Leeming JA dismissed the Sebie parties' application to extend the stay order I granted on 20 February 2019: Pham v Enterprise ICT Pty Ltd and Others; Pham v Sebie (No. 11) [2019] NSWSC 115. And Lindsay J has made orders on 4 April 2019.
Today Mr A. Pham appeared for himself and for the second plaintiff. Mr H. Simons appeared for the second defendant. Mr Robert Sebie appeared for himself, via audio link, with the leave of the Court.
My 20 February 2019 judgment ordered, in paragraph 37(2), that, by 4pm on 1 March 2019, the plaintiffs should file and serve on all other parties draft short minutes of order setting out the plaintiffs' fully worked calculation of interest on the Court's 30 January 2018 gross sum costs order, calculating the interest thereon under Civil Procedure Act 2005, s 101 up to 22 March 2019.
As a result of those orders, the Pham parties filed the following proposed short minutes of order setting out their calculation, which became Exhibit A on this application: "THE COURT ORDERS: 1. The amount of interest payable by Robert Sebie to the plaintiffs under s 101 of the Civil Procedure Act 2005, arising from the gross sum costs order made by the Court on 30 January 2018, up to 27 March 2019 is $26,493. 2. On or after 27 March 2019 there may be paid out of Court to the plaintiffs the sum of $26,493 (being the plaintiffs' entitlement to interest on costs) from the funds in Court in the name of Mr Robert Sebie, the first defendant. THE COURT NOTES that, in respect of the amount of $26,493, the calculation is as follows: 1. As recorded in paragraph 21 of the affidavit of Andy Pham dated 24 May 2018, in relation to the gross sum costs order made by the Court on 30 January 2018 in the amount of $263,660: (a) Between January and December 2015 the plaintiffs paid about $29,897 in respect of costs and disbursements. (b) Between January and December 2016 the plaintiffs paid about $35,057 in respect of costs and disbursements. (c) Between January and December 2017 the plaintiffs paid about $81,548 in respect of costs and disbursements. 2. The prescribed interest rate in rule 36.7 of the UCPR is: (a) in respect of the period from 1 January to 30 June in any year-- 6% above the cash rate last published by the Reserve Bank of Australia before that period commenced, and (b) in respect of the period from 1 July to 31 December in any year-- 6% above the cash rate last published by the Reserve Bank of Australia before that period commenced. 3. The plaintiffs' calculation of interest is: Payment of costs by plaintiffs and averaged date of payment Interest 1 July 2015 to 30 June 2016 (365 days) - 8% Interest 1 July 2016 to 30 June 2017 (365 days) - 7.75% and 7.5% Interest 1 July 2017 to 27 March 2019 (635 days) - 7.5% $29,897 on 1 July 2015 $2,392 $2,295 $3,901 $35,057 on 1 July 2016 Nil $2,691 $4,574 $81,548 on 1 July 2017 Nil Nil $10,640 Total $2,392 $4,986 $19,115

The plaintiffs' entitlement to interest on costs is $2,392 + $4,986 + $19,115 = $26,493."
The plaintiffs now seek payment out of Court of the sum of $26,493, in interest on the costs they incurred in the calendar years 2015, 2016 and 2017.
Mr Robert Sebie opposes the making of such an order on two main grounds: (1) the way the interest is calculated; and (2) wider grounds, including a ground that I should disqualify myself from further hearing these proceedings.
As to ground (2), Mr Sebie has directed the Court's attention to a notice of motion dated 4 April 2019 that was filed on his behalf and on behalf of ENA Development. Among other things, this motion sought orders (in Order 3) that I recuse myself from further hearings in these proceedings and (in Order 4 which is strictly not in the form of an order requiring anything to be done) contended that "ENA Development Pty Limited has not fallen away from its claim". This is a reference to paragraph [16] of my judgment of 20 February 2019, which stated that ENA Development's claim had fallen away because its cross claim was stayed: Pham v Sebie [2019] NSWSC 115. Since the matter was last before me, Mr Sebie contends that Rose Sebie has paid $100,000 into Court on 20 March 2019, in order to provide a basis to lift the stay orders against ENA Development.
The question whether or not I should disqualify myself from further conduct of these proceedings came before Lindsay J on the return date of the motion. His Honour, in accordance with conventional principle, indicated, as I understand it from what I am told, that he was not in a position to disqualify me from sitting in these proceedings. But the issue has been raised again before me today. But it seems to me that it is not necessary to hold a full hearing with submissions on that question. I do not have to determine it, because Mr Pham's application fails today for another more elementary reason.
As to ground (1), Mr Sebie makes a purely mathematical point. He says that the calculation of interest on costs in Exhibit "A" uses the mid-point of each calendar year (1 July) as the point from which the interest on costs is calculated, for each of the three calendar years 2015, 2016 and 2017. This is a legitimate way of calculating the interest on costs incurred during the year, if the expenditure on costs was incurred evenly throughout the calendar year and the costs expenditure in the first half of the year equals the expenditure incurred in the second half of the year.
That is not an assumption which can necessarily be made here. On the existing evidence an interest calculation based on that assumption may create unfairness to Mr Sebie. The interest calculation can properly be done either with the interest calculated based upon the timing of each item of actual costs expenditure (an onerous task), or the interest calculation could be done more conservatively, based upon the total costs expenditure for the year but calculated only from the last day of the year. If the latter approach is chosen, the interest is always calculated upon the full amount of whatever has been expended by way of costs in any one calendar year.
That is not how the calculation has been done in Exhibit "A". In the absence of evidence as to when each item of costs was actually expended, the Court is not prepared to make the orders sought in the form of Exhibit "A". Either a new more conservative interest calculation will have to be done, or evidence will need to be filed as to when costs were incurred during each calendar year, to establish that using the 1 July date as a notional date for the incurring of the year's costs is not unfair to Mr Sebie.
As the Court has already indicated, there is no need for these proceedings to be listed before me any longer. They will be listed before the Registrar. Fresh applications should be brought before the Registrar in the first instance. The parties should not contact my Chambers further, but should contact the Registrar.

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Judgment (4 paragraphs)

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