Credit Corp Services Pty Ltd v Shahi [2024] QMC 25

MAGISTRATES COURTS OF QUEENSLAND CITATION: Credit Corp Services Pty Ltd v Shahi [2024] QMC 25 PARTIES: Credit Corp Services Pty Ltd (Plaintiff) v Priyanka Shahi (Defendant) FILE NO/S: 53766/19 DIVISION: Civil PROCEEDING: Application for Costs ORIGINATING COURT: Brisbane Magistrates Court DELIVERED ON: 12/12/2024 DELIVERED AT: Brisbane HEARING DATE: On the Papers MAGISTRATE: Pinder ORDER: I order that the defendant pay the plaintiff: (1) Interest on the judgement sum in the amount of $32,139.77. (2) Costs on a standard basis to 6 December 2021 and on an indemnity basis from 7 December 2021 fixed in the sum of $7,945.79. CATCHWORDS: INTEREST ON JUDGEMENT -COSTS Civil Proceedings Act 2011 (Qld), s 58 Uniform Civil Procedure Rules 1999 (Qld), r 702, r 703, r 353, r 1003, r 260 CASES: Delta Pty Ltd v Mechanical and Construction Pty Ltd [2019] QCA 62 Calderbank v Calderbank [1976] Fam 93 Peter Carter Transport v Swansaway No. 2 Pty Ltd [2021] QDC 109 Amos v Monsour Legal Costs Pty Ltd [2007] QCA 235 -- 1 of 7 -- 2 Bottoms v Reser [2000] QSC 413 COUNSEL: CH. Matthews for the Plaintiff SOLICITORS: Piper Alderman for the Plaintiff Defendant – No Appearance [1] I delivered judgement in this matter on 2 August 2024.1 I gave judgement for the plaintiff against the defendant in the sum of $23,954.37. In respect of interest and costs I directed the parties file written submissions. [2] The plaintiff has now filed: - Written submissions on costs dated 16 August 2024. - Affidavit Rebecka Sumsion sworn 13 August 2024 – filed 21 August 2024. - Affidavit Florian Samuel Ammer sworn 14 August 2024 – filed 21 August 2024. [3] The defendant has not filed any further material and has not filed any written submissions. INTEREST [4] The courts power to award interest up to the date of judgement is provided by s 58 of the Civil Proceedings Act 2011 (Qld) (CPA). [5] The court may order interest be paid at a rate the court considers appropriate.2 [6] Unless there is a proper basis for departure, the court commonly applies the interest rate set by practice direction.3 The plaintiff contends for an entitlement to interest at a rate of 20.24% per annum. The plaintiff submits that the proper basis for departure from the application of interest rate set by practice direction is the finding in the substantive judgement that the agreement between the parties entitle the plaintiff to interest on the balance outstanding from time to time accruing at a rate of 20.24% per annum.4 The plaintiff claims interest from 10 January 2021 (the date of the first assignment of debt) and again relies on a finding in the substantive judgement that the debt owing by the defendant was $23,954.37.5 [7] The plaintiff claims interest from that date to the date of judgement (2 August 2024) being the date from when the plaintiff sustained the loss. [8] Interest might be awarded from the date when the plaintiff sustained the loss where that date is subsequent to the accrual to the cause of action. That accords with the underlying philosophy that interest is awarded by way of compensation for a plaintiff 1 Credit Corp Services Pty Ltd v Shahi [2024] QMC 12. 2 Civil Proceedings Act 2011 (Qld), s 58(8). 3 Delta Pty Ltd v Mechanical and Construction Pty Ltd [2019] QCA 62. 4 Credit Corp Services Pty Ltd v Shahi [2024] QMC 12, para 34. 5 Credit Corp Services Ibid , para 36. -- 2 of 7 -- 3 being kept out of the plaintiff’s money.6 The findings in the substantive judgement entitle the plaintiff to claim interest from 10 January 2021 to the date of judgement calculated at a rate of 20.24% per annum. [9] The affidavit of Ms Rebecca Sumsion filed 21 August 2024 attaches calculations as to the interest payable by the defendant upon that basis. I accept the calculations are correct and the plaintiff is entitled to an order for interest in the sum of $32,139.77. COSTS [10] The proceedings were commenced by claim and statement of claim filed 23 July 2019. [11] The proceedings were defended by the defendant, however, ultimately upon a successful summary judgement application the plaintiff succeeded in obtaining judgement in the full amount claimed. [12] The general rule is that costs follow the event,7 and a successful party would obtain an order that the unsuccessful party pay its costs on a standard basis.8 [13] The plaintiff seeks orders that the defendant pay its costs: - On a standard basis up to and including 6 December 2021. - On an indemnity basis on and from 7 December 2021. [14] The court has a power to award costs to be assessed on an indemnity basis.9 [15] The plaintiff contends that it is entitled to costs on that basis as it has the benefit of an offer to settle made pursuant to ch 9 pt 5 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR). [16] The plaintiff has made five offers to settle as follows: - 6 December 2021 – an offer that the defendant pay $31,000.00 with each party bearing their own costs. - 6 April 2022 – an offer the defendant pay $40,231.23 inclusive of interest and costs. - 15 June 2023 – an offer the defendant pay $54,000.00 inclusive of interest and costs. - 7 September 2023 – a reopening of the offer that the defendant pay $54,000.00 inclusive of interest and costs. - 25 October 2023 – a reopening of the offer that the defendant pay $54,000.00 inclusive of interest and costs. 6 Delta Pty Ltd v Mechanical and Construction Pty Ltd [2019] QCA 62, para 61. 7 Uniform Civil Procedure Rules 1999 (Qld), r 691. 8 Uniform Civil Procedure Rules 1999 (Qld), r 702. 9 Uniform Civil Procedure Rules 1999 (Qld), r 703. -- 3 of 7 -- 4 [17] The offers to settle of 6 April 2022, 15 June 2023, 7 September 2023 and 25 October 2023 were all stipulated to be Calderbank offers.10 [18] The plaintiff’s offer to settle of 6 March 2021 (the first offer) was expressed to be an offer to settle in accordance with ch 9 pt 5 of the UCPR. [19] The affidavit of Florian Samuel Ammer filed 21 August 2024 annexes copies of the five offers to settle made by the plaintiff.11 [20] The offer to settle by the plaintiff dated 6 December 2021 is a compliant offer in accordance with ch 9 pt 5 of the UCPR as it is in writing and contains a statement that it is made under that part.12 [21] The defendant did not accept any of the five offers to settle made by the plaintiff and importantly, did not accept the formal offer to settle made pursuant to the UCPR dated 6 December 2021. [22] Rule 360 UCPR deals with costs if an offer is made by a plaintiff. [23] The plaintiff’s solicitors outline13 relies on the current form of r 360 UCPR to contend for an order that the defendant pay the plaintiffs costs- - calculated on a standard basis up to and including the day of service of the offer (6 December 2021). calculated on an indemnity basis after the day of service of the offer (7 December 2021). [24] The plaintiff relies on r 360 in its current form, which was amended effective from 23 June 2023.14 It is in different terms to the previous rule. It is r 360 (prior to the last amendment) which is correctly applicable to the plaintiff’s offer to settle.15 [25] The applicable version of r 360 would have entitled the plaintiff to an order that, “the court must order the defendant to pay the plaintiff’s costs calculated on the indemnity basis unless the defendant shows another order for costs is appropriate in the circumstances.”16 [26] The defendant is on notice, by the plaintiff’s written submissions, as to the cost’s orders sought and accordingly, the plaintiff is constrained to the relief it seeks. [27] The plaintiff’s contended entitlement for costs orders17 is premised on having obtained an order no less favourable than the offer, either the UCPR offer of 6 December 2021 or the subsequent Calderbank offers.18 The plaintiff having obtained a more favourable result than the compliant UCPR offer, it is entitled to the costs 10 Calderbank v Calderbank [1976] Fam 93. 11 Affidavit of F.S. Ammer (21/08/2024), para 9 – 12. 12 Uniform Civil Procedure Rules 1999 (Qld), r 353. 13 Plaintiff’s Solicitor’s Outline, para 10 & paras 19 – 22. 14 Uniform Civil Procedure (Offers to Settle) Amendment Rule 2023 Subordinate Legislation 2023 No. 61 (Qld). 15 Uniform Civil Procedure Rules 1999 (Qld), r 1003. 16 Uniform Civil Procedure Rules 1999 (Qld), r 360 as at 23 June 2023. 17 See para [23] above. 18 Plaintiff’s Submissions, para 19. -- 4 of 7 -- 5 order contended for. A consideration of the subsequent Calderbank offers is therefore unnecessary. I accede to the plaintiff’s submissions and order that the defendant pay the plaintiff’s costs: - Calculated on a standard basis up to and including 6 December 2021; and - Calculated on an indemnity basis from 7 December 2021. FIXING COSTS [28] The plaintiff’s submission also seek that the court fix costs as opposed to ordering that the costs be assessed. In the Magistrates Court, the court may order the costs of a proceeding be assessed by a costs-assessor – if the Magistrate considers it appropriate because of the nature and complexity of the proceedings.19 [29] There is a presumption in favour of a Magistrate fixing costs of proceedings and it is only when a case falls into an exceptional category because of its nature and complexity that there might be an order for assessment of costs.20 [30] The plaintiff in seeking that costs be fixed relies on tax invoices raised by its solicitors Piper Alderman and an estimate of costs to completion of the costs and interest submissions quantifying those costs at $44,889.34.21 The affidavit of Mr Ammer annexes the invoices for the billed costs and deposes to estimated further costs.22 [31] The costs sought include counsel’s fees for appearance on the application for summary judgement and preparation of submissions on interest and costs. [32] At first brush in respect of a relatively straightforward debt recovery claim seeking $23,000.00, costs of nearly $45,000.00 would appear disproportionate. [33] In addition to providing a power for the court to order costs to be assessed on an indemnity basis, r 730 UCPR informs how indemnity costs should be assessed.23 In assessing indemnity costs the costs-assessor (or court) in the case of a Magistrates Court claim,24 have regard to: - The scale of fees prescribed for the court; and - Any costs agreement between the party to whom the costs are payable and the party’s solicitor; and - Charges ordinarily payable by a client to a solicitor for the work. [34] Rule 703(3), formally r 704(3), was considered in the context of the concept of reasonableness when assessing costs on an indemnity basis involving a consideration of proportionality.25 The plaintiff’s submissions contend that whilst the scale of fees is a consideration in determining reasonableness, those other relevant factors 19 Uniform Civil Procedure Rules 1999 (Qld), r 693(3). 20 Peter Carter Transport v Swansaway No. 2 Pty Ltd [2021] QDC 109, para 46. 21 Plaintiff’s Submissions, paras 23 – 27. 22 Affidavit of F.S. Ammer (21/08/2024), para 6, para 7. 23 Uniform Civil Procedure Rules 1999 (Qld), r 703(3). 24 Uniform Civil Procedure Rules 1999 (Qld), r 693(3). 25 Amos v Monsour Legal Costs Pty Ltd [2007] QCA 235. -- 5 of 7 -- 6 identified in Amos v Monsour Legal Costs Pty Ltd26 are required to be given due weight. In undertaking such an assessment “no niggardly or unduly narrow approach would be warranted.”27 The affidavit of Mr Ammer provides evidence of the costs agreements as between the plaintiff and its lawyers Piper Alderman28 and the counsel’s fees as agreed by the plaintiff’s lawyers.29 [35] That affidavit also sets out the legal costs invoiced and paid.30 [36] The plaintiff’s submissions in respect of fixing the costs are premised on the actual costs incurred (including estimated costs to completion) quantified at $44,889.34 and then discounting that sum back to account for proportionality to $30,000.00.31 In the alternative an annexed table based on the scale of costs provided by UCPR sch 2 pt 2 quantifies the costs allowed on the scale (including counsel’s fees) at $3,804.90 but the plaintiff contends that that is not an appropriate basis for assessment on an indemnity basis. [37] The departure from the scale of costs applicable in the Magistrates Court and the significantly greater assessed costs on an indemnity basis allowed in Amos v Monsour Legal Costs Pty Ltd turned on a number of considerations in that matter not present here. Those included: - The costs payable under the costs agreement with its lawyers relative to the ordinary costs payable under the scale. - That it was reasonable in the circumstances for Monsour to enter into a costs agreement with its solicitors. - That Monsour was defending its professional reputation and standing.32 [38] There the court found that the scale of costs applicable in the Magistrates Court was but one consideration in determining the reasonableness of indemnity costs assessed under r 703(3) UCPR. [39] The court did however find, “UCPR r 704(3)(a) (now r 703(3)(a)) by necessary implication requires the consideration of an element of proportionality.”33 [40] The present claim was on any view a relatively straightforward debt recovery claim on a contract with a financial institution. The plaintiff succeeded on a summary judgement application which proceeded conventionally and involved no unique or complex considerations. The sum claimed was a relatively modest one at $23,000.00. The element of proportionality, as between the costs recoverable on the scale and the costs sought partly on an indemnity basis is an important consideration. [41] The basis on which the plaintiff has obtained an order for costs are: 26 Amos v Monsour Legal Costs Pty Ltd [2007] QCA 235. 27 Bottoms v Reser [2000] QSC 413. 28 Affidavit of F.S. Ammer (21/08/2024), para 3. 29 Affidavit of F.S. Ammer (21/08/2024), para 4. 30 Affidavit of F.S. Ammer (21/08/2024), para 2. 31 Plaintiff’s Submissions, para 31. 32 Amos v Monsour Legal Costs Pty Ltd [2007] QCA 235, para 30. 33 Amos v Monsour Legal Costs Pty Ltd [2007] QCA 235, para 29. -- 6 of 7 -- 7 - Costs on a standard basis to 6 December 2021. - Costs on an indemnity basis from 7 December 2021. [42] The process of fixing costs in the Magistrates Court, in a proceeding where the amount involved is less than $50,000.00 (as is the case here) is greatly aided by sch 2 pt 2 of the UCPR.34 The costs outlined in Annexure A to the plaintiff’s costs submissions quantify the costs and counsel’s fees at $3,804.90. [43] Applying a substantial uplift of 100% to those professional costs and counsel’s fees, to reflect that they are in part ordered on an indemnity basis, results in professional costs and counsel’s fees of $7,609.80. The plaintiff would also be entitled to its disbursements which appears to be limited to filing fees on the claim and service fees. Those disbursements are not quantified in the plaintiff’s submissions but would appear to be $335.99. [44] I fix the plaintiff’s costs (being professional costs as counsel’s fees and disbursements in the sum of $7,945.79. DISPOSITION [45] I order that the defendant pay the plaintiff: (1) Interest on the judgement sum in the amount of $32,139.77. (2) Costs on a standard basis to 6 December 2021 and on an indemnity basis from 7 December 2021 fixed in the sum of $7,945.79. Magistrate J N L Pinder 12/12/24 34 Peter Carter Transport v Swansaway No. 2 Pty Ltd [2021] QDC 109, para 50. -- 7 of 7 --