Stroud v O’Connor [2016] NSWSC 629

Supreme Court New South Wales

Medium Neutral Citation: Stroud v O'Connor [2016] NSWSC 629 Hearing dates: 13 May 2016 Date of orders: 17 May 2016 Decision date: 17 May 2016 Before: Pembroke J Decision: Motion dismissed with costs Catchwords: EQUITY – accord and satisfaction – compromise agreement – effect on statutory claim for interest COSTS – discretionary entitlement to interest on costs – not available where court order for payment of costs ceases to be enforceable by reason of accord and satisfaction Legislation Cited: Civil Procedure Act 2005 (NSW) Cases Cited: Baxter v Obacelo Pty Ltd [2001] HCA 66; (2001) 205 CLR 653 El-Mir v Risk [2005] NSWCA 215 McDermott v Black [1940] HCA 4; (1940) 63 CLR 161 Osborn & Bernotti v McDermott [1998] 3 VR 1 Thompson v Australian Capital Television Pty Ltd [1996] 186 CLR 574 Category: Principal judgment Parties: John Stroud – plaintiff Terence Michael O'Connor – defendant Representation: Counsel: Ms M Castle – for the plaintiff Mr G George – for the defendant

Solicitors: Willis & Bowring – for the plaintiff Cleary Finlay Solicitors – for the defendant File Number(s): 2011/332884

Judgment 1. This is a claim by the defendant for interest on costs. Its jurisdictional basis is Section 101(4) of the Civil Procedure Act 2005 (NSW). That provision was significantly amended as from 24 November 2015. It formerly provided that the court may make an order for interest on costs. It now provides that interest is payable on costs unless the court otherwise orders. In both cases, obviously, the court retains a discretion. 2. The defendant's claim for interest arises in the following circumstances. On 19 November 2012 this court ordered that the plaintiff pay the defendant's costs on an indemnity basis. On 3 June 2013 the parties compromised the claim and reached an agreement that the plaintiff would pay $96,000 to the defendant by 30 June 2013 in full satisfaction of the claim. Payment was not made by the due date but was eventually paid on 22 January 2016. The 'claim' that was compromised by the agreement was the defendant's entitlement pursuant to the original order for payment of indemnity costs. That claim carried with it a discretionary right to interest pursuant to Section 101(4). 3. The discretionary right to interest attaches to an 'order' of the court. It does not attach to the personal obligation of a party pursuant to an agreement to pay a specified sum for costs, unless they have specifically agreed that it should do so. In this case, the parties' agreement operated in substitution for the order of the court made on 19 November 2012.