T&T Investments Australia Pty Limited v CGU Insurance Limited

T&T Investments Australia Pty Limited v CGU Insurance Limited - [2016] NSWCA 372 - NSWCA 2016 case summary — Zoe

THE COURT: The appellant (T&T) was successful in an appeal to this Court, pursuant to a judgment delivered on 25 August 2016: T&T Investments Australia Pty Limited v CGU Insurance Limited [2016] NSWCA 227. The respondent (CGU) was ordered to pay the appellant's costs. By a notice of motion filed 14 September 2016 the appellant seeks an order pursuant to s 101(4) of the Civil Procedure Act 2005 (NSW) that the respondent pay interest on its costs and disbursements.
T&T commenced proceedings in the District Court, where it obtained a judgment, but for a lesser amount than that claimed. The orders in that court made on 10 October 2014 included: 3. The defendant pay the plaintiff's costs of the proceedings up to 21 October 2013, assessed on the ordinary basis. 4. The plaintiff pay the defendant's costs of the proceedings from 22 October 2013 to the end of the proceedings, assessed on an indemnity basis.
On an appeal by T&T, this Court gave judgment awarding T&T damages in the sum of $620,160. The parties were directed to file short minutes dealing with the final award (including interest) and costs on the basis that the respondent was to pay the appellant's costs of the proceedings at first instance and on appeal on the ordinary basis. Short minutes were filed on 31 August 2016, reflecting the orders proposed by the Court on 25 August. No interest on costs was included.
There is no issue as to the relevant principles. Section 101(4) relevantly provided (before it was amended in relation to proceedings commenced on and after 24 November 2015) with respect to the proceedings in this Court and in the District Court (which in each case were commenced before 24 November 2015): (1) Unless the court orders otherwise, interest is payable on so much of the amount of a judgment (exclusive of any order for costs) as is from time to time unpaid. … (4) The court may order that interest is to be paid on an amount payable under an order for the payment of costs.
Although not applicable to this application, s 101(4) was amended by the Courts and Other Justice Portfolio Legislation Amendment Act 2015 (NSW) and now provides: (4) Unless the court orders otherwise, interest is payable on an amount payable under an order for the payment of costs.
It is accepted that the purpose of an order under s 101(4) is to compensate a party having the benefit of a costs order for being "wrongly required to expend money on litigation to enforce established rights": Robb Evans of Robb Evans & Associates v European Bank Limited (No 2) [2009] NSWCA 170 at [44] (Basten JA, Campbell JA agreeing). That being the position ordinarily it will follow, as Gleeson JA observed (Ward and Emmett JJA agreeing) in Doppstadt Australia Pty Ltd v Lovick & Son Development s Pty Ltd [2014] NSWCA 158 at [403] that: … in the absence of any countervailing discretionary factor, it is appropriate that an order for interest on costs be made to compensate the party having the benefit of a costs order for being out of pocket in respect of relevant costs which it had paid. There is no requirement to establish that the circumstances of the case are out of the ordinary: Drummond and Rosen Pty Ltd v Easey & Ors (No 2) [2009] NSWCA 331 at [4] per Macfarlan JA (Tobias JA agreeing) citing Lahoud v Lahoud [2006] NSWCA 126 at [82]-[83] per Campbell J.
In support of its application T&T has filed two affidavits of its director, Mr Trotter, as to the incurring of costs and disbursements in relation to the first instance and appeal proceedings, in the period between January 2014 and December 2016. That affidavit refers to all of the costs and disbursements said to have been incurred in those proceedings. No attempt has been made to estimate the amount which may be payable, assessed on the ordinary basis.
In response, CGU relies on an affidavit of Mr Adie, the solicitor having day-to-day carriage of the matter in the proceedings in the District Court and before this Court. It deals with the absence of any claim by T&T to interest on costs in the District Court, or in this Court, and with asserted delays in the prosecution of the appeal.
On the subject of delay, the affidavit establishes:

T&T accepts that its failure to seek interest on any costs order in its favour in the District Court has the consequence that its present application is "unsupportable" in relation to those costs and disbursements. It does so in the light of the following observations of this Court in Illawarra Hotel Company Pty Ltd v Walton Construction Pty Ltd (No 2) (2013) 84 NSWLR 436; [2013] NSWCA 211 at [33]-[34] (Meagher, Barrett and Ward JJA): Illawarra [which was successful on its cross summons in the proceedings at first instance] seeks an order pursuant to s 101(4) of the Civil Procedure Act for interest on the costs and disbursements it has outlaid since commencement of the litigation in 2008. Illawarra thus contends that this Court should order the payment of interest on costs awarded to it in the Equity Division. That contention is misconceived and must be rejected. The amended notice of appeal contains no such claim and no ground of appeal raises the matter. Nor (unlike the s 100(4) question just discussed [dealing with interest on damages]) does the issue arise as a consequence of the outcome on appeal. Illawarra seems to say simply that it should have from the Court of Appeal an order in respect of costs at first instance that, so far as the record shows, was not sought in the court below and does not flow from the decision on appeal. That is a quite unsupportable proposition.
Accordingly the interest in issue on T&T's application is interest on its costs of the appeal. Mr Trotter's second affidavit claims that an amount of approximately $150,000 was expended by way of costs and disbursements in prosecuting its appeal. There is no evidence as to what proportion of that amount might be recoverable in an assessment of costs on the ordinary basis. Assuming that amount to be approximately $90,000, Mr Trotter's evidence suggests that the greater part, being solicitors' fees, was paid from June 2016 and that counsels' fees were paid from June 2015, with the significant proportion of those fees paid after June 2016. If interest were payable on these costs at 6% for a period of two years, the amount payable would be $10,800. This calculation provides a rough estimate of the upper range amount likely to be at issue in this application.
CGU submits that there are two countervailing considerations to the exercise of the Court's discretion to make an order for interest. The first is that no such order was sought in the notice of appeal, or otherwise by argument in this Court, and that the question whether such interest should be awarded was not raised until after this Court had delivered its judgment and the parties had filed consent short minutes which addressed, on a final basis, the question of costs in the appeal. The second is that there was significant delay in the prosecution and hearing of the appeal due to T&T's conduct. The period of that delay appears to have been about seven months.
T&T contends that there was no significant delay due to its conduct. First, it is suggested that CGU was not ready to proceed at the hearing on 10 February 2016. That submission must be rejected. The adjournment was sought on the application of T&T and opposed by CGU. The fact that an order was made that T&T pay the costs thrown away reflects that reality. Secondly, it is suggested that any delay was contributed to by CGU's filing of a summons seeking leave to cross-appeal which was ultimately discontinued. That conduct is not shown to have delayed the fixing of a hearing date. The other matters to which T&T refers are that CGU filed written submissions late, that any delay on its part was due to financial constraints, and that any delay due to its late service of a notice of ceasing to act was not significant. (T&T's solicitors were not on the record for the first six months of 2016, which may have caused some of the delay.) None of these matters affect our assessment that there was delay in the resolution of the appeal due to T&T's conduct.
We consider that there should not be any order for the payment of interest on the appeal costs ordered in favour of T&T. The factors which in this case lead to that conclusion are that: (1) no application for an order for interest on costs was made by the notice of appeal or foreshadowed in the argument of the appeal; (2) the application was made after apparently final orders were filed which included an order dealing with the costs of the appeal; (3) T&T was responsible for significant delay in the determination of the appeal; (4) the Court (and the other party) should generally be able to act on the basis that the resolution of any issue as to costs is not intended to be the subject of a novel claim for interest on costs, and (5) in accordance with s 60 of the Civil Procedure Act, this Court will be slow to countenance a late motion of this kind which, if opposed, will give rise to costs which are disproportionate to the amount in issue. It is not necessary to address the effect of the amendment to s 101(4).
Accordingly, the Court orders that T&T's notice of motion filed 14 September 2016 is dismissed with costs.

At a glance

Court

Decision date

Before

Source

Judgment (4 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (7)