TIMMS & ORS. v. COMMONWEALTH BANK OF AUSTRALIA & ORS. [NO.3] [2004] NSWCA 25

New South Wales Court of Appeal

CITATION : TIMMS & ORS. v. COMMONWEALTH BANK OF AUSTRALIA & ORS. [NO.3] [2004] NSWCA 25 HEARING DATE(S) : 09/02/2004 JUDGMENT DATE : 19 February 2004

JUDGMENT OF : Beazley JA at 1 DECISION : Motion dismissed with costs.

CATCHWORDS : INTEREST on COSTS - Claim for interest on costs - Claim for interest not an independent cause of action - JUDGMENTS - ORDERS - Whether final judgment may be set aside - Application for interest must be made and determined before entry of judgment for costs. LEGISLATION CITED : Legal Profession Act 1987 Supreme Court Act 1970 Bailey v Marinoff (1971) 125 CLR 529 CASES CITED : Texas Co (Australasia) Ltd v Federal Commissioner of Taxation (1940) 63 CLR 382 DJL v Central Authority (2000) 201 CLR 226 Shaddock (L) & Associates Pty Limited [No. 2] (1982) 151 CLR 590 Commonwealth Bank of Australia (1st Claimant) PARTIES : Rosenfeld Kant & Co (2nd Claimant) Anastasia Timms (1st Opponent) Brian Timms (2nd Opponent) FILE NUMBER(S) : CA 40555/01 R.G. Forster SC (1st Claimant) COUNSEL : R. Dubler (2nd Claimant) M. Clarke (Opponents) L. E. Taylor (1st Claimant) SOLICITORS : Phillips Fox (2nd Claimant) Maurice Blackburn Cashman (Opponents)

- 1 - IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40555/01

BEAZLEY JA

19 February 2004 TIMMS & ORS. v. COMMONWEALTH BANK OF AUSTRALIA & ORS. [No. 3] Judgment 1 BEAZLEY JA: The claimants brought proceedings against the Commonwealth Bank (the Bank) alleging negligent misrepresentation by the Bank in relation to the financial viability of a business it was purchasing and in respect of which it borrowed substantial funds from the Bank. They also claimed that their accountants, Rosenfeld Kant & Co. (the accountants), gave them negligent advice relating to the purchase. The Bank cross-claimed against the claimants seeking repayment of the claimants' borrowed funds in respect of which there had been default. The matter was heard by Young CJ in Eq in 2001 who found against the claimants and entered a verdict on the Bank's cross-claim in the sum of $5.2 million. The Bank estimates that its debt, with interest, is now approximately $6.6 million. 2 The claimants successfully appealed against that verdict, judgment of the Court of Appeal being delivered on 23 September 2002. The Court of Appeal ordered a retrial and ordered the Bank and the accountants to pay the claimants' costs of the appeal. 3 Subsequent to the Court of Appeal's orders, the claimants had their costs of the appeal assessed in accordance with the provisions and procedures specified in Part 11 Division 6 of the Legal Profession Act 1987. On 19 November 2003, the Cost Assessor issued his Certificate as to Determination of Costs (the Costs Certificate): see s.208J(1). Costs were assessed in the sum of $126,911.78. 4 On 11 December 2003, the claimants filed the Costs Certificate in the Court in accordance with SCR Pt. 40 r.12. Pursuant to s.208J(3), the effect of filing the Costs Certificate was that the amount of costs thereby assessed became a judgment of the Court for that amount. 5 The claimants now, by Notice of Motion dated 20 January 2004, seek an order that the Bank and the accountants pay interest on the amount of assessed costs at Schedule J rates, as from the dates on which they paid those costs to their solicitors until 11 December 2003, being the date of entry of judgment for the costs. Schedule J specifies the interest rate payable under various provisions of the Supreme Court Rules, and would apply here if an order for interest was made: SCR Pt. 40 r.7(2). 6 The claimants' claim for interest is made under s.95(4) of the Supreme Court Act. That section provides: "…(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."