Hunt v R M Douglas (Roofing) Ltd

JurisdictionUK Non-devolved
JudgeLord Bridge of Harwich,Lord Brandon of Oakbrook,Lord Griffiths,Lord Ackner,Lord Jauncey of Tullichettle
Judgment Date03 November 1988
Judgment citation (vLex)[1988] UKHL J1103-1
Date03 November 1988
CourtHouse of Lords
Hunt
(Appellant)
and
R. M. Douglas (Roofing) Limited
(Respondents) (on Appeal from the Queen's Bench Division of the High Court of Justice)

[1988] UKHL J1103-1

Lord Bridge of Harwich

Lord Brandon of Oakbrook

Lord Griffiths

Lord Ackner

Lord Jauncey of Tullichettle

House of Lords

Lord Bridge of Harwich

My Lords,

1

I have had the advantage of reading in draft the speech of my noble and learned friend Lord Ackner. I agree with it and, for the reasons he gives, I would allow the appeal.

Lord Brandon of Oakbrook

My Lords,

2

For the reasons given by my noble and learned friend Lord Ackner I would allow the appeal.

Lord Griffiths

My Lords,

3

I agree that this appeal should be allowed for the reasons given in the speech of my noble and learned friend, Lord Ackner, and I agree with the order that he proposes.

Lord Ackner

My Lords,

4

This appeal raises an important issue with regard to costs - namely whether a litigant who has been awarded costs, is entitled to interest on the amount of the costs from the date upon which judgment is pronounced, (referred to hereafter as "the incipitur rule"), or from the date upon which the taxation of costs is completed by the issue of the Taxing Master's certificate (the "allocatur rule").

5

The Facts

6

This issue has twice been considered in the past twelve years by the Court of Appeal and accordingly this appeal has come before your Lordships' House by what is known as the "leapfrog" procedure. Hence the material facts can be stated quite shortly. On 24 September 1982 the appellant suffered personal injuries in an accident in the course of his employment with the respondents. On 28 March 1983 he issued his writ claiming damages. This was followed on 26 May 1983 by the statement of claim and thereafter by further pleadings to which there is no need to make any reference. On 1 November 1984 the action was settled and by consent Master Prebble ordered that all further proceedings in the action be stayed, except for the purpose of carrying into effect the terms of the agreement, which terms included:–

"(4) That the defendants do pay to the plaintiff his costs of this action, including the costs of this application, to be taxed as between party and party on the High Court scale, failing agreement."

7

It is common ground that the Master's order is a judgment or an order which carries interest, as if it were a judgment.

8

On 12 July 1985 the appellant commenced proceedings for the taxation of his costs and on 14 August 1985 rendered his bill, the total claim being £24,471.08 inclusive of V.A.T. On 9 December 1985 the appellant's solicitors gave notice of intention to claim interest on the taxed costs, to run from the date of pronouncement of judgment. On 15 January 1986 taxation took place and the sum allowed was £17,788.67 (inclusive of V.A.T.). On 28 January 1986 a review of taxation was sought by the appellant. On 18 March 1986 the Taxing Master overruled the appellant's objections and on 4 June 1986 his certificate ("the allocatur") for £17,788.67 including V.A.T. was issued.

9

On 19 March 1986 the appellant applied to Master Turner for an order that, pursuant to section 17 of the Judgments Act 1838, interest on the taxed costs of the action should run from the date of pronouncement of judgment. The Master dismissed this application, concluding that he was bound by the decisions of the Court of Appeal in K. v. K (Divorce Costs: Interest) [1977] Fam. 39 and Erven Warnink B.V. v. J. Townend & Son (Hull) Ltd. (No. 2) [1982] 3 All. E.R. 312. On 20 May 1986 the appellant's appeal against this decision was heard by Sir Neil Lawson Q.C., sitting in chambers as a Deputy Judge of the Queen's Bench Division. He dismissed the appeal on the ground that he too was bound by these decisions of the Court of Appeal, but he granted a certificate pursuant to Section 12 (1) of the Administration of Justice Act 1969 and subsequently your Lordships granted to the appellant leave to appeal to your Lordships' House.

10

The Judgment Act 1838 and its Application to Interest On Costs, Prior to 1976

11

Prior to the passing of the Judgments Act 1838 interest on costs could not be recovered. The material provisions of the Act are Sections 17, 18 and 20 which are in the following terms:–

"'17. Every judgment debt shall carry interest at the rate of four pounds per centum per annum from the time of entering up the judgment … until the same shall be satisfied, and such interest may be levied under a writ of execution on such judgment. [The statutory rate of interest has been increased from time to time].

18. All decrees and orders of courts of equity, and all rules of courts of common law, … whereby any sum of money, or any costs, charges, or expences, shall be payable to any person, shall have the effect of judgments in the superior courts of common law, and the persons to whom any such monies, or costs, charges, or expences, shall be payable, shall be deemed judgment creditors within the meaning of this Act; and all powers hereby given to the judges of the superior courts of common law with respect to matters depending in the same courts shall and may be exercised by courts of equity with respect to matters therein depending, … and all remedies hereby given to judgment creditors are in like manner given to persons to whom any monies, or costs, charges, or expences, are by such orders or rules respectively directed to be paid …

20. Such new or altered writs shall be sued out of the courts of law, equity, and bankruptcy as may by such courts respectively be deemed necessary or expedient for giving effect to the provisions herein-before contained, and in such forms as the judges of such courts respectively shall from time to time think fit to order ….'"

12

Section 20 was repealed by the Civil Procedure Acts Repeal Act 1879, section 2 and Schedule Part 1.

13

The Act nowhere defines the vital words in Section 17 "entering up the judgment". A different view was taken by the Common Law Courts as opposed to the Chancery Courts as to when the judgment could be said to have been entered up and Section 20 was apparently relied upon as giving a power to the Courts to regulate their practice in accordance with the view they took. The Court of Common Pleas awarded interest on costs from the date of the incipitur see Fisher v. Dudding 9 Dowl. 872 Tindal C.J. said, at p. 874:

"The question is, what is the meaning of the words that interest shall be allowed from 'the time of entering up judgment'? And it appears to me, that the legal meaning of those words must be taken to be the time of signing judgment, or making the entry of the incipitur in the Master's book".

14

Erskine J. said, at pp. 875-876:

"In putting an interpretation upon this clause of the statute, we must look at the practice of the Court to see what is the "entering up" of the judgment, and it appears to me that the entry of the incipitur in the Master's book must be taken to be that entering up which is contemplated, and although the judgment may be afterwards more formally entered on the roll, yet that is not the entering of the judgment from which interest must be calculated."

15

Maule J. said, at p. 876:

"I am also of the same opinion. In the contemplation of law, entering up of the judgment is the writing down something in a book which is kept by the Master for that purpose. That is called the incipitur, and the entry is only so made for the convenience of the Parties. but it guides what is drawn up afterwards in a more formal manner on the record. The record, it is to be observed, is not usually drawn up, unless it is necessary that it should be so for the use of the parties for any particular purpose, and the incipitur, at the same time, that it is generally alone sufficient for all ordinary purposes, affords the materials for drawing up that more minute form on parchment, which on account of the expense, is usually dispensed with. In criminal cases, the same course is commonly pursued, and the record is only filled up in instances where from some circumstances it is requisite that it should be so. The fact of this not being generally done then, affords a clue to the intentions of the legislature, and shews that the statute was not meant to refer to the entering up of the judgment on the roll, which would often produce more expense than the interest would amount to, but to the general entering up of judgment in the Master's book in the form of an incipitur. With regard to the justice of the case, the Court cannot look to particular cases in laying down a general rule of practice; but I confess that I do not see that any injustice will be worked by the decision at which the Court has arrived."

16

That decision was approved in Newton v. Grand Junction Railway Co (1846) 16 M & W 139, 153 E.R. 1133, a decision of the Court of Exchequer. Alderson B. observed in the course of argument at p. 141:

"Then, as to the interest, there is an uncertain amount, which is in the wrong pocket, and is there bearing interest; I see no injustice in saying, that as soon as it is reduced to certainty, that interest should be paid. Whatever be the sum, it is fructifying in the wrong pocket."

17

However the Court of Chancery apparently took a different view, its practice being referred to in Boswell v. Coaks (1888) 57 L. J. Ch. 101, 105, by Lindley L.J. who said:

"The right to interest on costs depends on the statutory enactment 1 and 2 Vict. c. 110 ss. 17 and 18, and by section 20 of that Act the Court is empowered to make orders framing new rules, and under that section the Court of Chancery by consolidated orders issued a form of writ of fi. fa. according to which interest on costs was to run from the date of the Taxing Master's Certificate. There was no similar practice at common law, where the interest ran always from the date of the judgment."

18

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