FEDERAL COURT OF AUSTRALIA

Hanave Pty Limited v LFOT Pty Limited (formerly Jagar Products Pty Limited) (In Liquidation) & Ors [2003] FCA 1154

PRACTICE & PROCEDURE – interest – post-judgment interest – statutory entitlement – estoppel – whether delay relevant to award of post-judgment interest.

PRACTICE & PROCEDURE – interest – pre-judgment interest under s 51A of the Federal Court of Australia Act 1976 (Cth) – slip rule – finality in litigation – whether delay constitutes “good cause” in exercising discretion to order interest – where “good cause” must be shown.

Federal Court of Australia Act 1976 (Cth), ss 51A, 52

Judiciary Act 1903 (Cth), s 37

R W Miller & Co Pty Ltd v The Ship “Patris” [1975] 1 NSWLR 704 referred to

Considine v Citicorp Australia Ltd [1981] 1 NSWLR 657 referred to

Nicol v Allyacht Spars Pty Ltd (1988) 165 CLR 306 discussed

Clarke v Foodland Stores Pty Ltd [1993] 2 VR 382 referred to

Commonwealth v McCormack (1984) 155 CLR 273 referred to

H K Frost Holdings Pty Ltd (in liquidation) v Darvall McCutcheon (a firm) [1999] FCA 795 discussed

Caboolture Park Shopping Centre Pty Ltd (In liquidation) v White Industries (Qld) Pty Ltd (1993) 45 FCR 224 referred to

L Shaddock & Associates Pty Ltd v Parramatta City Council (1982) 151 CLR 590 discussed

Whitlock v Brew (1968) 118 CLR 445 distinguished

Kewside Pty Ltd v Warman International Ltd (1990) ATPR 41-012 discussed

Grincelis v House (2000) 201 CLR 321 referred to

Simonius Vischer & Co v Holt & Thompson [1979] 2 NSWLR 322 discussed

Golden West Refining Corporation Ltd v Daly Laboratories Pty Ltd (unreported, 16 February 1995, Carr J) discussed

Gibbett v Forwood Products Pty Ltd (No 2) [2001] FCA 434 discussed

MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657 referred to

Australian Guarantee Corporation Ltd v Border Printing Services Pty Ltd (1989) Q ConvR 54-319 discussed

Bailey v Marinoff (1971) 125 CLR 529 referred to

Gould v Vaggelas (1985) 157 CLR 215 referred to

HANAVE PTY LIMITED v LFOT PTY LIMITED (FORMERLY JAGAR PRODUCTS PTY LTD) (IN LIQUIDATION) & PAUL EWEN MITCHELL TRESIDDER & JOSEPH RAYMOND GLEW

N 721 of 1995

MOORE J

22 OCTOBER 2003

SYDNEY

THE COURT ORDERS THAT:

1.   The second respondent pay the applicant post-judgment interest in the amount of $201 082.19.

2.   The second respondent pay the applicant $110 000 as pre-judgment interest from 17 August 1994 to 19 February 2000.        

3.    The applicant pay the respondents’ costs of this application including reserved costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

Introduction

1                     This is an application for an order for pre-judgment interest on a judgment of 11 November 1999 in matter N 721 of 1995: see Hanave Pty Ltd v LFOT Pty Ltd(1999) 168 ALR 318.  The orders were entered on 18 February 2000.  Pre-judgment interest can be ordered under s 51A of the Federal Court of Australia Act 1976 (Cth) (“the Act”).  Issues concerning post-judgment interest are also raised in the application.  Liability to pay post-judgment interest arises under s 52 of the Act.  The application for interest was filed on 23 December 2002 as a notice of motion in matter N 721 of 1995 (although at that stage the application was for post-judgment interest only). 

2                     The matter has a long history, conveniently summarised by Gaudron ACJ and Hayne J at [1] –[7] in Burke v LFOT (2002) 209 CLR 282.  Relevant dates have been added:

The first-named appellant, William Robert Burke, was at relevant times the solicitor for and a director of the second appellant, Hanave Pty Limited (“Hanave”). Mr Burke had dealings with the first respondent LFOT Pty Limited (“LFOT”), then known as Jagar Projects Pty Limited. That company was the owner of land and premises in Leichhardt (“the premises”) which had been advertised for sale. On behalf of Hanave, Mr Burke entered into negotiations for their purchase and, in due course, Hanave completed the purchase [on 17 August 1994]. Mr Burke was Hanave’s solicitor on the purchase.

The premises consisted of retail outlets, including a shop known as Barbara’s Storehouse. It is not now in issue that the first respondent represented to Hanave, through Mr Burke, that the tenant of that part of the premises which was occupied by Barbara’s Storehouse was a “high quality tenant” notwithstanding that that tenant had been in arrears in payment of its rent on a number of occasions. Additionally, LFOT failed to disclose to Hanave that an incentive payment had been made to that tenant.

History of the proceedings

Hanave brought proceedings in the Federal Court [filed on 19 September 1995] against LFOT and two other persons, Mr Tresidder and Mr Glew, the second and third respondents to this appeal. Hanave alleged, amongst other things, that the failure of LFOT to disclose the incentive payment to the tenant of the premises occupied by Barbara’s Storehouse and the representation that that tenant was a high quality tenant constituted false and misleading conduct for the purposes of s 52 of the Trade Practices Act 1974 (Cth) (“the Act”). Additionally, Hanave claimed that Messrs Tresidder and Glew had aided and abetted LFOT in that conduct.

After filing their defence to Hanave’s claim, LFOT and Messrs Tresidder and Glew cross-claimed against Mr Burke claiming that, if they were liable to pay damages to Hanave, they were entitled to equitable contribution from Mr Burke on the basis that, as Hanave’s solicitor, he acted in breach of his duty to exercise reasonable care in relation to the purchase of the premises.

At first instance, Moore J dismissed Hanave’s claim for damages [by an order made on 31 August 1998: (1998) ATPR 41-658]. That order was the subject of a successful appeal to the Full Federal Court which, by majority (Wilcox and Kiefel JJ, Emmett J dissenting), held that the misrepresentation with respect to Barbara’s Storehouse constituted false and misleading conduct for the purposes of s 52 of the Act.  The Full Court ordered that judgment be entered for Hanave against LFOT and remitted the matter to Moore J to determine the remaining issues [by orders made on 1 April 1999: (1999) 43 IPR 545]. Those issues were the liability of each of Messrs Tresidder and Glew, the liability of Mr Burke on the cross-claim, the quantification of the damages payable to Hanave and, if the liability of Mr Burke were established, the amount of contribution payable by him.  [An application by LFOT for special leave to appeal to the High Court from the Full Court judgment of 1 April 1999 was lodged on 7 May 1999 and heard and dismissed on 10 December 1999.]

On remitter, Moore J held that Mr Tresidder, but not Mr Glew, had aided and abetted the false and misleading conduct of LFOT and that Hanave was entitled to judgment against LFOT and Mr Tresidder in the sum of $750,000, that having been found to be the difference between the sale price and the true value of the premises. Additionally, his Honour held that Mr Burke had breached his retainer and was negligent in not advising Hanave to inquire about the solvency and financial standing of the tenants and LFOT and Mr Tresidder were entitled, by reason of Mr Burke’s negligence, to equitable contribution from him in the sum of $375,000 [the orders were made on 11 November 1999: (1999) 168 ALR 318 and entered on 18 February 2000].

Hanave and Mr Burke appealed to the Full Federal Court from the order for contribution. By majority (Heerey and Lehane JJ, Lee J dissenting), the appeal was dismissed [the appeal was lodged on 30 November 1999 and dismissed by orders made on 18 August 2000: see Burke v LFOT Pty Ltd (2000) 178 ALR 161]. They now appeal to this Court.  [Special leave to appeal was sought by Hanave on 13 September 2000 and granted on 1 June 2001.]  Mr Burke does not challenge the finding of negligence made against him, only his liability to contribute to the damages awarded against LFOT and Mr Tresidder.

3                     The High Court allowed Mr Burke’s appeal (by judgment given on 18 April 2002), finding he was not liable to contribute to the damages LFOT and Mr Tresidder had been ordered to pay Hanave on 11 November 1999.  I should note that LFOT also appealed against the judgment of 11 November 1999 as it concerned the assessment of the damages and the amount ordered to be paid by Mr Burke as contribution.  Mr Tressider appealed against the finding of liability and the amount he was ordered to pay.  I should also note that on 18 September 2000, LFOT sought special leave to appeal against the Full Court judgment of 18 August 2000 but that application was discontinued on 13 October 2000.

4                     It is convenient to set out the terms of the orders made at first instance, by the two Full Courts of this Court and by the High Court.  The orders I made on 31 August 1998 were:

            1.         The application is dismissed.

2.         The parties to file and serve written submissions on the question of costs within 14 days of today.

The orders of the first Full Court, made on 1 April 1999 were:

            1.         The appeal be allowed.

2.         The orders made on 31 August 1998 be set aside and in lieu thereof judgment be entered for Hanave Pty Limited against the first respondent, Lfot Pty Limited.

3.         The matter be remitted to the primary Judge for determination of the issue of the liability of each of the second and third respondents with respect to the contravening conduct of the first respondent, for determination of the cross claim and an assessment of damages on the claim and cross claim.

4.         Lfot Pty Limited pay Hanave Pty Limited´s costs of this appeal and the hearing below.

The orders I made on remitter on 11 November 1999 were:

1.      Subject to order 2, the first and second respondent pay the applicant the sum of $750,000 by way of damages.

2.      At the time of satisfaction of order 1, the cross-respondent pay the first and second cross-claimant the sum of $375,000 by way of contribution.

3.      Submissions on costs to be filed and served within 21 days.

The orders made by the second Full Court of this Court, on 18 August 2000 were:

            1.         The appeal be dismissed.

            2.         The appellants pay the respondents’ costs of the appeal.

            3.         The cross-appeal be dismissed.

4.                  The cross-appellants pay the cross-respondents’ costs of the appeal.

The orders made by the High Court on 18 April 2002 were:

            1.         Appeal allowed with costs.

2.         Set aside the order of the Full Court of the Federal Court made on 18 August 2000 and in its place order that:

                        (a)   the appeal to that Court is allowed with costs;

            (b)   set aside Order 2 of Moore J made on 11 November 1999 and in its place order that the cross-claim is dismissed with costs.   

5                     I now turn to consider the attitude adopted by the parties to the question of interest during the period the principal litigation was on foot and what passed between them.  Before doing so, I should mention one matter, namely whether Mr Glew is entitled, at this stage, to be heard in opposition to the orders sought.  Counsel for Hanave submitted he was not.  One counsel has appeared for Mr Tresidder and Mr Glew during the hearing of this application.  The application was made in the proceedings in which Mr Glew was a party and I see no reason why he cannot continue to appear even though the relevant orders (on which interest is now sought) only bind Mr Tresidder (LFOT was placed into liquidation in June 2002).  Unless the context requires otherwise, I will refer to Mr Glew and Mr Tresidder as the respondents.

The Facts

6                     At the hearing of this application, evidence was given by Mr Burke, Mr Glew and Mr Tresidder.  The following reflects findings of fact based on their evidence and relevant documents.

7                     No application was made for interest until this application was filed on 23 December 2002.  What was then sought was, in effect, post-judgment interest being interest from 31 August 1998 when the orders were first made dismissing the application.  An application for pre-judgment interest was not made until the notice of motion was amended on 20 February 2003.  However, once the Full Court made the orders giving judgment for Hanave on 1 April 1999, pre-judgment interest became a live issue in the sense that once damages were assessed and an order made requiring their payment, interest could be ordered.  That occurred when the orders were made on 11 November 1999.  Had the matter rested there, issues between the parties (other than costs) would have been settled.  However, both sides appealed against that judgment.

8                     It is to be recalled that the orders of 11 November 1999 were entered on 18 February 2000. On 5 September 2000, Mr Burke wrote to the respondents seeking payment of the damages with interest, though no order had been made concerning pre-judgment interest.  The letter was faxed to the respondents’ previous solicitors and read:

Dear Sir,

RE: Hanave Pty Ltd ats Lfot (Jagar Products) Pty Limited

We refer to the above matter.

We note that by Orders of His Honour Justice Moore filed 15 February 2000 and entered on 18 February 2000 our client is entitled to interest up to judgment which was 11 November 1999 and from that date until the date of payment.

The effect of His Honour’s Orders are that your client pays our client $375,000 plus interest from the date of the cause of action.

We calculate interest as follows:

19/9/95 – 28/2/97        528 days @ 12%         =                                 $65,095.99

1/3/97 – 31/8/98          548 days @ 10%         =                                 $56,301.37

1/9/98 – 28/2/00          645 days @ 9.5%        =                                 $53,193.49

1/3/00 – 5/9/00            188 days @ 10%         =                                 $19,315.07

TOTAL                                                                                             $193,905.82

Daily interest @ 10%                                                                         $102.74

As of today your client is owing our client the sum of $566,905.82.

We note the interest componentis [sic] continuing to accrue at the rate of $102.74 per day.

Please arrange for your client to pay our client the amount due within 14 days.

We are in the process of calculating our Bill of Costs in respect of the Orders for Costs in favour of our client.  We will forward that Bill to you presently.

            [Emphasis in original]

9                     It can be seen that both pre-judgment and post-judgment interest is claimed but only on the sum of $375,000.  Mr Burke, when calculating the interest, referred to a “precedent sheet” which he subscribed to which set out the “interest rates charged” under the Federal Court Rules.  He did not investigate the basis upon which interest could be claimed nor the basis on which the respondents might be liable to pay it.  His evidence, which I accept, was that “I wasn’t sure whether I knew the proper basis”.  The respondents did not respond to this letter nor did Mr Burke pursue the matter further for some considerable time.

10                  Mr Glew received the letter but before he had a chance to respond to it, Mr Burke sought special leave to appeal to the High Court.  The position Mr Glew adopted by not responding was that there were still issues to be resolved and it was unnecessary to pay any money until the matter was finally resolved by the High Court.  Mr Tresidder also believed interest would be payable after the High Court gave judgment.  When Mr Burke sent the letter he did not know about the slip rule, or that an opportunity might exist for him to return to the Court to seek pre-judgment interest.

11                  On 6 May 2002 Mr Burke wrote to the respondents’ then solicitors.  The letter noted that under the judgment of the High Court of 18 April 2002, the respondents were required to pay the sum of $750,000.  The letter went on to note that pursuant to O 35 r 8 of the Federal Court Rules, Hanave was entitled to “interest at the rate of 10.5 per cent from the date of the original judgment of Moore J 11 November 1998 to date”.  A calculation then appeared which set out the judgment sum, interest, costs (said to be at discounted rate) and disbursements and their total.  The letter then offered to settle the matter by the payment of that sum.  The reference to the judgment of 11 November 1998 was to the judgment in which I dismissed the application (a judgment later set aside by the Full Court).  Mr Tresidder paid $250,000 of the judgment debt to Hanave on 28 May 2002 and the balance of $500,000 on 28 October 2002.  Mr Glew lent Mr Tresidder both amounts to make the payments.

12                  On 27 November 2002 a bankruptcy notice was served on Mr Tresidder by Hanave claiming, inter alia, $316,726.03 as interest on the judgment debt from 31 August 1998 calculated in a way that took into account the two payments made on 28 May 2002 and 28 October 2002.  On 28 November 2002, solicitors then acting for Mr Tresidder wrote to Mr Burke pointing out that interest on a judgment is only payable from the time of judgment quantifying the damages payable, and that occurred on 11 November 1999.

13                  As noted earlier, the application for interest was filed on 23 December 2002.  In that application, an order was sought under O 35 r 7(3) varying the order of 11 November 1999 to include an order “interest on the sum of $750,000 be paid by the first and second respondents on and from the 31 August 1998”.  Thus the interest sought was for a period commencing from the time the application was initially dismissed.  It was not until 20 February 2003 that interest was sought from the time the cause of action arose, being the date of the completion of the sale (17 August 1994).  An amended notice of motion was filed on 19 March 2003.

14                  I am satisfied that Mr Burke did not appreciate until early this year that it was necessary for an application for pre-judgment interest to be made before it could be ordered.  I reach this conclusion notwithstanding that on 5 September 2000, Mr Burke sent a letter demanding payment of pre-judgment interest.  He sent this letter without really turning his mind to the legal basis upon which the demand was founded.  In any event, it is relatively clear from the entire history that Mr Burke and counsel appearing for him and Hanave have failed to make any application for pre-judgment interest before 19 March 2003. 

15                  This application was initially set down for hearing on 19 March 2003, however on that day consent orders were made extending the timetable and adjourning the matter to a later date.  On the day the application was next listed for hearing, 29 April 2003, I ordered (on the application of Hanave) that the application proceed by way of pleadings, and made consequential orders to progress the matter for hearing on that basis at a later date.  I did so, not because the matter was one which traditionally would proceed by way of pleadings, but because I accepted the submission of Hanave’s counsel that the basis on which the respondents raised an estoppel (and the basis upon which it was denied by Hanave), should be clearly defined.  When the application was next before the Court for hearing on 5 June 2003 the matter was not ready to proceed.  A further hearing date of 26 June 2003 was fixed.  On 6 May 2003, Hanave filed a statement of claim which sought the following orders (these orders differed from those sought in the original notice of motion):

THE APPLICANT CLAIMS:

1.      An order that the Second Respondent pay the sum of $441,863.01 to the Applicant as interest pursuant to s 51A of the Federal Court Act for the period 17 August 1994 to 18 February 2000.

2.      An order that the Second Respondent pay the sum of $59,691.78 to the Applicant as interest on the sum of $250,000 pursuant to s 52 of the Federal Court Act for the period 19 February 2000 to 28 May 2003.

3.      An order that the Second Respondent pay the sum of $141,390.41 to the Applicant as interest on the sum of $500,000 pursuant to s 52 of the Federal Court Act for the period 19 February 2000 to 28 October 2003.

4.      Costs.

I turn now to consider whether the orders sought by Hanave should be made.  It is convenient to commence with the claim for post-judgment interest.

Post-judgment interest

16                  It can be seen from the orders finally sought that the application was maintained on the basis that an order was necessary before an entitlement to post-judgment interest arose.  During the hearing of the motion on 26 June 2003 there was discussion about whether an order was necessary.  Ultimately Hanave sought an order for post-judgment interest under O 35 r 1 on the express basis that an order would be necessary to found any bankruptcy notice based on the debt for any outstanding interest.  I do not express a view whether this is correct.  However there was no suggestion by any party that I could not make an order as requested.  The reason for the discussion about whether an order was necessary is because s 52 of the Act confers a statutory right to post-judgment interest.  It provides:

(1)               A judgment debt under a judgment of the Court carries interest from the date as of which the judgment is entered.

(2)               Interest is payable:

                        (a) at such rate as is fixed by the Rules of Court; or

            (b) if the Court, in a particular case, thinks that justice so requires — at such lower rate as the Court determines.

17                  The fact that the statute confers an entitlement (arising at the time at which judgment was entered: see R W Miller & Co Pty Ltd v The Ship “Patris” [1975] 1 NSWLR 704 at 723) to post-judgment interest (subject to the Court’s power to fix and, in a particular case, lower the rate) may be of significance.  That is because, as one of their arguments resisting post-judgment interest, the respondents contended Hanave was estopped from claiming such interest.  At the hearing on 26 June 2003, counsel for Hanave made a submission that there could be no estoppel in the face of a statutory entitlement (there is authority that estoppel cannot be raised in the face of a statute conferring a benefit: see Considine v Citicorp Australia Ltd [1981] 1 NSWLR 657, though counsel for the respondents sought to answer this proposition in later written submissions by referring to Brown v The Queen (1986) 160 CLR 171 at 208, and Commonwealth v Verwayen (1990) 170 CLR 394 at 405-6 and 456).

18                  Counsel for Hanave ultimately elected to make no submissions on this issue in written submissions filed after the hearing which were intended to address the relationship between estoppel and a statutory entitlement.  The only submission on the question of estoppel made on behalf of Hanave was that no estoppel had been made out on the facts. In those circumstances, I should deal with the matter on the footing that an estoppel might arise and consider whether this is supported by the facts.  The respondents also submitted, in the alternative, that I should exercise the discretion conferred by par 52(2)(b) to lower the amount of interest, essentially on the same grounds the estoppel is said to be founded.

19                  The estoppel was said to arise this way.  By the letter of 5 September 2000, Hanave represented that notwithstanding the terms of the order entered in February 2000, LFOT and Mr Tresidder were only required to pay $375,000.  Hanave did not press its claim for principal or interest from that time until 6 May 2002 and, in the meantime, sought special leave to appeal against the order for contribution.  I interpolate to note that the appeal to the High Court appears (from both the application for special leave and the orders ultimately entered) to have been brought by both Hanave and Mr Burke.  As I understand the issues raised in the application for special leave, it concerned only the liability of Mr Burke to pay contribution.  That is, the application only concerned the second order made by me on 11 November 1999 (ordering contribution) together with the orders of the Full Court of 18 August 2000 dismissing the appeal against the judgment in the cross-claim against Mr Burke which was reflected in that second order.  It is not apparent to me what interest Hanave had in challenging that order or the judgment in the appeal from that order.

20                  It was submitted by the respondents that the conduct referred to in the first part of the preceding paragraph, together with Hanave’s inactivity, constituted a representation which the respondents relied on, that Hanave did not require payment of the $375,000 together with post-judgment interest (or $750,000 together with post-judgment interest) until the High Court had given judgment.  The detriment was said to be that the respondents did not enforce the order against Mr Burke and thereby gain the benefit of that order. In his written submissions, Counsel for the respondents submitted, additionally, in relation to the estoppel:

            The essential unfairness to which the estoppel is directed is that if the Court were now to award post-judgment interest to the applicant on the full amount of $750,000 from 19 February 2000…this would unfairly give a retrospective effect to the High Court judgment (delivered 18 April 2002) in circumstances where:

a)         In reliance on the conduct of the applicant the respondents proceeded on the basis that any post-judgment interest would only be payable after the High Court judgment;

b)                  In the alternative to a), even if the applicant proceeded on the basis that post-judgment interest was payable by the first and second respondents to the applicant on the amount of only $375,000 (rather than $750,000) in the period 19 February 2000 up to 18 April 2002.

21                  The reference to retrospective effect of a High Court judgment (as it relates to post-judgment interest) concerns s 37 of the Judiciary Act 1903 (Cth) (which provides that the High Court exercising its appellate jurisdiction may give such judgment as ought to have been given in the first instance) and O 43 r 3 of the High Court Rules (which provides that the entry of judgment pronounced by the High Court shall be dated as of the day on which the judgment is pronounced unless the Court otherwise orders and the judgment shall take effect from that day).  The High Court can make an order with the effect that interest can run on a judgment from one day prior to when judgment was pronounced: see Nicol v Allyacht Spars Pty Ltd (1988) 165 CLR 306 at 311.

22                  The respondents submitted that no order was made by the High Court on 18 April 2002 providing that interest accrue from some earlier date.  However, this submission is misconceived at least as a matter of legal analysis.  The obligation of LFOT and Mr Tresidder to pay the $750,000 was founded on the order of 11 November 1999.  All that was determined by the High Court was whether, additionally, Mr Burke should provide contribution in the sum of $375,000.  While the order of the High Court, in effect, nullified a benefit that LFOT and Mr Tresidder gained from the judgment of 11 November 1999, it had no legal effect on their primary obligation to pay the $750,000.  There was no occasion for the High Court to make any order concerning interest on the $750,000 from 11 November 1999, 18 April 2002 or any other time.

23                  As to the estoppel argument more generally, for my part, even if I accepted that the respondents acted as they did because of what is said to be representations by Hanave (which I do not), I doubt that any estoppel would arise.  But it appears to me that the respondents acted as they did after the orders made on 11 November 1999 were entered on 18 February 2000 because they viewed the dispute between them and Hanave and Mr Burke as not finally resolved.  They did not act to their detriment because of any representation made by Hanave or Mr Burke or because of their conduct.  Plainly the respondents were aware, when adopting the position, that steps had not been taken to satisfy the judgment before the letter of 5 September 2000 and that when that letter was received all that was being claimed was $375,000 (plus interest).  They would have also been aware that nothing more was done to secure payment until after the judgment of the High Court.

24                  I turn now to consider the submission of the respondents that the power conferred by par 52(2)(b) should be exercised and the interest on the judgment sum of $750,000 for the period 19 February 2000 to 18 April 2002 should be reduced to 5 percent.  The rate fixed by the Federal Court Rules can be reduced if the Court, in a particular case, thinks that justice so requires.  On this basis, the post-judgment interest would be as follows:

a)                  interest on $375,000 between 19 February 2000 and 18 April 2002 at a rate of 5 percent; and

b)                 interest on $750,000 between 18 April 2002 and 28 May 2002 (when $250,000 was paid to the applicant) at the applicable rate; and

c)                  interest on $500,000 between 28 May 2002 and 28 October 2002 (when the balance was paid to the applicant).

25                  I was not referred to any authority concerning the manner in which the power to reduce the rate of interest should be exercised.  Probably it should be characterised as a wide discretionary power which must be exercised judicially: see Clarke v Foodland Stores Pty Ltd [1993] 2 VR 382 at 393 (thought the difference in the statutory formulation should be noted).

26                  At one level, Mr Burke took an entirely practical approach (as reflected in his letter of 5 September 2000) to the net amount owing between the parties after judgment was entered on 19 February 2000 and before the balance was altered by the judgment of the High Court.  He was entitled (and whether it was him personally or Hanave did not appear to be an issue to him) to be paid $375,000 as he saw things.  There is no evidence to suggest that any party sought the stay of either order made on 11 November 1999 at any time.  At another level, Mr Burke was seeking to be relieved of a personal obligation to pay $375,000 by not demanding, on behalf of Hanave, the payment of $750,000 to that company.  I do not find (and was not invited to) that Mr Burke was consciously seeking to achieve that latter purpose, but it was nonetheless the effect of the position he adopted.

27                  The respondents (LFOT and Mr Tresidder) were (at least from 5 September 2000) being told by Mr Burke, in effect, that he did not expect them to satisfy the entire obligation arising from the first order at least until he had exhausted the challenge in the High Court to his obligation to pay contribution.  It is to be recalled that the letter of 5 September 2000 was written 8 days before Mr Burke’s and Hanave’s application for special leave to appeal was lodged. Almost certainly that application was in contemplation when the letter was written and, I infer, would have been served shortly after that (an inference reinforced by the filing of what was probably a responsive application for special leave to appeal by LFOT and Mr Tresidder on 16 September 2000 which was later discontinued).  Unfortunately on the copy of the application by Hanave and Mr Burke for special leave which is in evidence, Mr Burke has not completed the section which identifies the date on which the application was signed though it was sometime in the first half of September 2000.

28                  However, I am not satisfied in this particular case that justice does require a reduction of the rate of interest fixed by the rules for the reasons advanced by the respondents.  During the period February 2000 to April 2002, Mr Tresidder (or LFOT) had the benefit of retaining the amount of $750,000 (which is the amount he has been finally adjudged liable to pay without any offsetting contribution from Mr Burke) or, more likely (given that he ultimately borrowed the money to satisfy the judgments) has not suffered the cost of borrowing all or part of that sum.  Correspondingly, Hanave did not have the benefit of the entire amount of $750,000.  Ordering Mr Tresidder to pay Hanave interest at the full rate of interest on the entire amount will simply put Hanave in the position it should have been in had the November 1999 orders been complied with and the error not made in requiring Mr Burke to pay contribution.

29                  Had Mr Tresidder (or LFOT) complied with the orders and paid $750,000 when the orders were entered in February 2000 and Mr Burke also met his obligation to pay contribution in the sum of $375,000, Hanave would have had the benefit of the $375,000 for the following two years and the benefit of any income (by way of interest or otherwise) generated by that sum.  In that period, Mr Tresidder (or LFOT if it had had the funds to make the payment) would have been deprived of the use of the net amount of $375,000.  Moreover, had the orders been complied with, Mr Burke would ultimately have obtained an order in the High Court requiring Mr Tresidder to repay the $375,000 with interest: see Commonwealth v McCormack (1984) 155 CLR 273 and also Heydon v NRMA Ltd (2001) 53 NSWLR 600, JEL v DDF (2001) 28 Fam LR 119 and Ronstan International Pty Ltd v Thomson [2002] VSCA 107.  Thus on these assumed facts, Mr Tresidder would have suffered a burden equivalent to interest on the entire amount of $750,000 from the time the orders were entered in February 2000.  The effect of the respondents’ submission is that because “justice so requires”, Mr Tresidder should be relieved of part of that burden.  I do not accept he should be.

Pre-judgment interest

30                  Hanave also made an application for pre-judgment interest under s 51A of the Act, which was advanced on the basis it would be necessary to vary the orders entered on 19 February 2000 to include such interest.  Section 51A provides:

(1)       In any proceedings for the recovery of any money (including any debt or damages or the value of any goods) in respect of a cause of action that arises after the commencement of this section, the Court or a Judge shall, upon application, unless good cause is shown to the contrary, either:

                        (a)        order that there be included in the sum for which judgment is given interest at such rate as the Court or the Judge, as the case may be, thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date as of which judgment is entered; or

                        (b)        without proceeding to calculate interest in accordance with paragraph (a), order that there be included in the sum for which judgment is given a lump sum in lieu of any such interest.

(2)…

31                  A comparatively recent detailed discussion of many of the principles which govern the exercise of the discretionary power to order pre-judgment interest is found in the judgment of Finn J in H K Frost Holdings Pty Ltd (in liquidation) v Darvall McCutcheon (a firm) [1999] FCA 795.  His Honour said (at [6]-[11]):

(1)       It is well settled that the objective of provisions of this type is to compensate an applicant for the loss it suffers in being kept out of its money or damages:  see Batchelor v Burke (1981) 148 CLR 448 at 455;  Clarke v Foodland Stores Pty Ltd [1993] 2 VR 382 at 396;  and see Tilbury, Civil Remedies, vol 1, 1990, para 3226ff.

(2)       The award of interest under s 51A(1) is mandatory “unless good cause is shown to the contrary”:  Australian Guarantee Corporation Ltd v Border Printing Services Pty Ltd (Lockhart, Spender and Hill JJ, 21 April 1989, unreported);  cf Supreme Court Act 1970 (NSW) s 94 that does not use the “good cause” formula but see eg Donellan v Watson (1990) 21 NSWLR 335 at 345 (“interest is almost invariably to be allowed when claimed”).  Ordinarily it will be for the respondent to establish such “good cause”:  see Wright v West Australian Trustee & Agency Co Ltd [1987] VR 771 at 775;  this does not necessarily require that evidence be adduced for the purpose:  see Clarke v Foodland Stores Pty Ltd, above at 394.  Furthermore, it is open to the court, for example, to take into account such considerations of public policy as may be relevant in the circumstances:  see Border Printing Services Pty Ltd v Australian Guarantee Corporation Ltd (Pincus J, 19 December 1988, unreported).

(3)       Though the matter is and remains one of judicial discretion, it is the usual practice of this Court in applying s 51A(1) to adopt the rates of interest applied by the Supreme Court of the State or Territory in which this Court is dealing with the matter:  Namol Pty Ltd v A W Baulderstone Pty Ltd (1993) 119 ALR 187;  Nagy v Masters Dairy  Ltd (1997) 150 ALR 301 at 317;  though, no less so than a State court, the Court may then depart from those rates as a matter of discretion given the circumstances of the case:  see Clarke v Foodland Stores Pty Ltd, above, at 389.  A justification for this practice is that it helps to ensure that damages are awarded on the same basis at least as to rates of interest whether a proceeding is instituted in this Court or in a Supreme Court.  Parity in the making of interest awards will, though, often be unattainable because the legislation of a particular State may prescribe varying periods for which pre-judgment interest may be awarded (depending upon the nature of the cause of action in question) that differ from what is allowable under s 51A(1):  see eg Supreme Court Act 1986 (Vic) s 58 and s 60;  Supreme Court Act 1935 (SA) s 30c;  Supreme Court Act 1995 (Qld) s 47.

(4)       Given the variations in the language and structure of the pre-judgment interest provisions of the various Australian States, care must be taken in using the decisions of State courts on their own statutes to elucidate the meaning of s 51A(1).  For example, for the purposes of s 51A(1) the formula “good cause to the contrary” would appear on its proper construction to mean only good cause for not allowing interest at all:  see Australian Guarantee Corporation Ltd v Border Printing Services Pty Ltd, above.  The subsection itself otherwise provides discretions as to the rate and the period of an interest award.  In contrast, the same formula as used in s 58 of the Supreme Court Act 1986 (Vic) has been interpreted to mean good cause for allowing interest otherwise than in accordance with the terms of that section:  see Clarke v Foodland Stores Pty Ltd, above, at 391-393.  But s 58, notably, does not provide the same discretions as does s 51A(1).

(5)       It is neither possible nor desirable to define what will constitute “good cause” disentitling a party to interest under s 51A(1);  each case must be considered by reference to its own circumstances:  Australian Guarantee Corporation Ltd v Border Printing Services Pty Ltd, above.

(6)       There is considerable diversity in judicial opinion as to the extent to which, if at all, the rate or (more usually) the period selected for an interest award should as a discretionary matter be moulded adversely to a party that delays in the prosecution or defence of a claim where no resultant detriment to the other party is shown:  see eg Geoffrey W Hill & Associates (Insurance Brokers) Pty Ltd v Squash Centre (Allawah North) Pty Ltd (1990) 6 ANZ Insurance Cases §61-012 (“[t]he principle of punishment is not borne out by a consideration of the purpose of the statutory discretion”);  De Girolamo v South Australia (1991) 56 SASR 40 at 44-45;  but cf Keates v Nelson (NSW Court of Appeal, Kirby P, Mahoney and Cripps JA, 16 April 1992, unreported);  Golden West Refining Corporation Ltd v Daly Laboratories Pty Ltd (Carr J, 16 February 1995, unreported):  Tilbury, above, para 3230;  and see also BP Exploration Co (Libya) Ltd v Hunt (No 2) [1979] WLR 783 at 845-847 and McGregor on Damages, 16^th Ed, 1997, paras 668-669.  Nonetheless, insofar as concerns a successful applicant who has been guilty of unreasonable delay, the view I am prepared to follow in the absence of binding authority is that the period for which the interest award is made can properly be adjusted if to allow interest for the whole period for which it could otherwise be ordered would work an injustice to the respondent in the circumstances:  cf Clarke v Foodland Stores Pty Ltd, above, at 400.  Such would seem to be consistent with the policy of the s 51A(1) in that an applicant that has been held out of the benefit of its money because of its own unreasonable actions should not be allowed as of course to cast the effects of a ‘self-inflicted burden’ onto the respondent:  Keithara Pty Ltd v J G L Holdings Pty Ltd (Supreme Court of Victoria, Smith J, 6 December 1994, unreported).

32                  However, in this matter, there is a question as to whether the power to order pre-judgment interest can be exercised at all.  That is because, prior to the entry of judgment requiring Mr Tresidder and LFOT to pay $750,000, no application was made for pre-judgment interest as contemplated by the section.  Indeed, as noted earlier, the application for pre-judgment interest was first made on 20 February 2003 by an amendment to the original application for post-judgment interest.

33                  Generally, once a judgment of the Court has been passed and entered, the Court lacks power to make an order which alters or sets aside that judgment: Caboolture Park Shopping Centre Pty Ltd (In liquidation) v White Industries (Qld) Pty Ltd (1993) 45 FCR 224 at 234.  Counsel for Hanave did not submit that the order for interest should be characterised as a supplementary order of the type considered by the Full Court in the authority just cited.  On the approach relied on by Hanave, because judgment has been entered, the means by which this variation (making provision for pre-judgment interest) can be made is under O 35 r 7 of the Federal Court Rules, which relevantly provides:

(1) The Court may vary or set aside a judgment or order before it has been entered.

(2) The Court, where it is not exercising its appellate or related jurisdiction under Division 2 of Part III of the Act, may if it thinks fit vary or set aside a judgment or order after the order has been entered where:

(a) the order has been made in the absence of a party, whether or not the absent party is in default of appearance or otherwise in default and whether or not the absent party had notice of the motion for the order;

            (b) the order was obtained by fraud;

            (c) the order is interlocutory;

            (d) the order is an injunction or for the appointment of a receiver;

            (e) the order does not reflect the intention of the Court; or

            (f) the party in whose favour the order was made consents.

(3) A clerical mistake in a judgment or order, or an error arising in a judgment order from an accidental slip or omission, may at any time be corrected by the Court.

(4) Subrule (2) shall not affect the power of the Court to vary or terminate the operation of an order by a supplementary order.

Counsel for Hanave accepted neither subr 7(1) or subr 7(2) applied, but submitted that the order should be varied pursuant to subr 7(3) (“the slip rule”).  It was submitted that prior to the entry of the orders, Mr Burke made an accidental omission in failing to apply for pre-judgment interest.  Counsel for Hanave submitted something was an “accident” for the purposes of the slip rule if it is “something that happens without intention or design”: see Australian Casualty Company Ltd v Federico (1985) 160 CLR 513 at 537 per Wilson, Deane and Dawson JJ.  Counsel for the respondents submitted the Court had no power to make the order sought on the basis on which it was sought.

34                  A similar issue arose in L Shaddock & Associates Pty Ltd v Parramatta City Council (1982) 151 CLR 590, though that was a case relating to interest between the date on which the trial judge gave judgment and the date of judgment in a successful appeal took effect.  In that matter, an action for damages in the Supreme Court of NSW was dismissed, on the basis that the defendant owed no duty of care to the plaintiff.  However, the trial judge assessed the amount of damages to which the plaintiff would have been entitled in the event that his decision was reversed on appeal.  The Court of Appeal dismissed the appeal though a further appeal was allowed by the High Court which ordered damages in the amount determined by the trial judge.  In the notices of appeal to the Court of Appeal and the High Court, no interest was sought for the period from the time of the initial judgment and any successful appeal.  Following the successful appeal to the High Court (during the hearing of which the question of interest was not raised) the plaintiff applied for an order under O 29 r 11 of the High Court Rules (a slip rule) that the order from the High Court be amended to include an award of interest for the relevant period.  The evidence was that the failure to advert to the issue of interest in argument was an accidental omission on the part of counsel.  In its reasons for judgment, the High Court said that if such an application had been made and the Court had power to do so, an order for interest would have certainly been made “but for the inadvertence of counsel for the applicants”.  Mason ACJ, Wilson & Deane JJ said at 594 – 595:

            Order 29, r. 11 is in the traditional form of a slip rule.  It reflects the inherent jurisdiction of a court “at any time to correct an error in a decree or order arising from a slip or accidental omission” (see Milson v Carter [1893] A.C. 638).  In terms, the rule provides, inter alia, that “an error arising in a judgment or order from an accidental slip or omission, may at any time be corrected by the Court or a Justice on motion or summons”.  The rule extends to authoize an omission resulting from the inadvertence of a party’s legal representative (see Fritz v Hobson (1880) 14 Ch.D. 542; Chessum & Sons v Gordon [1901] 1 K.B. 694; In re: Inchcape (Earl) [1942] Ch. 394; Coppins v Helmers & Brambles Constructions Pty Ltd [1969] 2 N.S.W.R. 279; Tak Ming Co Ltd v Yee Sang Metal Supplies Co [1973] 1 W.L.R. 300, at p. 304; [1973] 1 All E.R. 569.  This is so, regardless of whether the order has been drawn up, passed and entered (see Milson v Carter [1893] A.C., at p. 640; Fritz v Hobson (1880) 14 Ch.D., at p. 560).

            …

            The question whether the Council should be ordered to pay interest on any damages which the applicants proved the had sustained as a subsidiary or consequential question which only arose when the substantial issue between the parties as to liability and resulting damages had been determined.  It should, of course, have been mentioned in the notices of appeal.  Nevertheless, in the circumstances, we consider that it is competent for this Court, pursuant to the slip rule, to amend the Court’s previous order to make provision for interest upon the damages, to which the applicants have been held to be entitled, for the period between the date on which judgment was given in the Supreme Court and the date on which the orders were made in this Court on appeal.

35                  Post-judgment interest was ordered by the High Court for the relevant period.  However, the Court made observations about three matters concerning the application of the slip rule.  The first related to the case of Whitlock v Brew (1968) 118 CLR 445, which is discussed shortly.  The second related to the appellant’s alternative argument that an order for interest should be made under O 43 r 3 of the High Court Rules, and is not relevant to this discussion.  The third was whether an order under the slip rule was available as a matter of course.  In relation to this issue, the Court said at 597:

            There is a discretion in the court to refuse an order if something has intervened which would render it inexpedient or inequitable that it be made (see Tak Ming [1973] 1 W.L.R., at p. 306; [1973] 1 All E.R., at p. 572 ; and the cases there cited).  In the present case, there was considerable delay in filing the notice of motion.  The Court’s decision was given on 28 October 1981 and the judgment entered at the end of November 1981.  The motion to amend the order is dated 22 July 1982.  The general principle in support of finality of litigation together with the fact that a party against whom judgment in a money sum is entered is entitled to regard that judgment as finally determining the extent of his liability combine to stress the importance of prompt action under the slip rule.  The seriousness of the delay in this case is, however, minimized by the fact that the interest and the delay in making the application to the Court is, to no small extent, explained by the content of the correspondence between the parties during the months prior to the filing of the application.

            [Emphasis added]

36                  Whitlock v Brew concerned the sale of a petrol station in Victoria.  No oral application was made to the Full Court in the Victorian Supreme Court for interest, although the notice of appeal to the Full Court sought judgment for the amount claimed “and interest thereon”. Although the plaintiff was successful in his appeal, the Full Court made no order as to interest.  The Full Court’s orders were subsequently entered.  The plaintiff then moved the Full Court to include an order for interest.  This order was dismissed: Brew v Whitlock [No 3] [1968] VR 504.  Following the defendant’s appeal to the High Court, the plaintiff cross-appealed against the failure of the Full Court to order interest.  The High Court dismissed the plaintiff’s cross appeal by a majority.  The reasoning of Taylor, Menzies and Owen JJ was based on the terms of the Supreme Court Act 1958 (Vic) relating to pre-judgment interest.  As the majority noted in Shaddock at 596:

            The judgment of the Full Court of the Supreme Court makes clear, however, that the decision that the slip rule was not applicable flowed from the wording of s. 78 of the Supreme Court Act 1958 (Vict.) which, unlike s. 94 of the New South Wales Act, provided that an order allowing interest could only be made “at the hearing ... upon application” and the fact that no such application for interest had been made at the hearing. In this Court, Taylor, Menzies and Owen JJ, in their majority judgment, plainly indicated that their approval of the decision of the Full Court was on that basis.

37                  A not dissimilar issue arose in Kewside Pty Ltd v Warman International Ltd (1990) ATPR 41-012, a judgment of this Court concerning pre-judgment interest.  In that matter, the applicant was awarded an amount for damages that included interest, while the respondent was awarded damages only, and no application was made for interest on behalf of the respondent.  French J amended the judgment to include interest using O 35 r 7(3), basing his decision on essentially the same reasoning as the High Court in Shaddock, again noting that finality in litigation was an important consideration in the making of any such order.  However the orders in Kewside had not been entered when the order for interest was made and the application was also made relatively promptly.

38                  In my opinion, I do have power to make the order sought on the basis that it will involve a correction of an accidental slip or omission.  Putting to one side, for the moment, the terms on which the power to order pre-judgment interest is conferred by s 51A, it is clear from the judgment of the High Court in Shaddock that the failure of a legal representative to apply for an order concerning interest is comprehended by the expression “accidental slip or omission” in a slip rule of the type found in the Federal Court Rules.  Accordingly that rule enables the Court to correct the order if it otherwise has power to do so.

39                  However it is necessary to bear in mind that the power to order pre-judgment interest is governed by statute: see Grincelis v House (2000) 201 CLR 321 at 325-326.  In addition, the section conferring power to award interest in Shaddock was not, in any relevant sense, expressed in terms which limited the circumstances in which it could be exercised.  That was not the case in Whitlock v Brew where an order could only be made “at the hearing…upon application”.  In this matter, the power conferred by s 51A is enlivened “upon application”.  The section is silent as to when the power can be exercised.  On one view, it is intended that the power be exercised at the time judgment is pronounced.  That is suggested by the language in which pars (a) and (b) is expressed.  Those paragraphs appear to contemplate that an order for pre-judgment interest is made as part of the process of pronouncing judgment.  That is, the power is to be exercised at the time judgment is pronounced on the footing that an application for its exercise has already been made.  However it is by no means obvious that the power can only be exercised at that time.  I apprehend that the reasoning of the High Court in Shaddock indicates that a narrow view should not be taken of the circumstances in which an order for interest can be made unless the language of the section conferring power is intractable.  The trend of recent authority is to take a wide rather than narrow view of the Court’s powers even after judgment has been entered: see Caboolture Park Shopping Centre Pty Ltd (In liquidation) v White Industries (Qld) Pty Ltd (supra).  Section 51A should not be construed as limiting the exercise of the power to order pre-judgment interest to situations where an application has been made prior to judgment being pronounced.

40                  However the exercise of the power conferred by s 51A (which obliges the Court to order pre-judgment interest) is conditioned by the words “unless good cause is shown”.  In the present case the respondents rely on the delay in seeking pre-judgment interest.  The justification or explanation for the delay was put on the following basis, as I understood the submissions made on behalf of Hanave.  As far as the respondents were concerned, the matter was finalised on 13 October 2000, when they discontinued their application for special leave to appeal to the High Court.  From 13 October 2000 the respondents were always going to be required to pay $750,000.  The only issue that remained was whether Mr Burke had to contribute $375,000.  However, the entitlements of Hanave (I interpolate, if no distinction is drawn between Hanave and Mr Burke) depended on the outcome of the proceedings in the High Court.  Applying for pre-judgment interest at that stage was not appropriate.  In addition, there was no unfairness or injustice to the respondents, particularly as the respondents were on notice of a claim for pre-judgment interest from September 2000, when Mr Burke sent the letter of demand.

41                  Counsel for the respondents referred to the judgment of Moffitt P in Simonius Vischer & Co v Holt & Thompson [1979] 2 NSWLR 322 at 338-339:

            It has been long generally accepted that, whatever be the cause, delay between cause of action and judgment is productive of unfairness to one or other or both parties. While accepting that the defendant has the advantage of not having to pay the money and has the use of it, it does seem to me that, to make an order for the payment of interest at commercial rates extending for long periods into the past is prima facie productive of unfairness to the defendant; and that it is the more so if he has had no notice, or no early notice, of such a claim. For a defendant or his insurer or both to order their affairs over a long period of years in ignorance that the claim against them is subject to a claim for interest at commercial rates during all that period, is likely to be productive of unfairness and detriment, but possibly of a kind difficult precisely to pinpoint or demonstrate. In some instances, for example, complications may arise by virtue of the incidence of taxation in relation to benefits derived from the money notionally not paid in particular years compared with the liability to pay the full commercial rate of interest. Of course, the plaintiff himself may be worse off by the delay in not receiving the money to which he is entitled, but if the delay is his, this factor may have less weight. At least, it is reasonable to conclude the plaintiffs had it in their power to bring their claim to a conclusion some years earlier than they did. It has been argued, however, on behalf of the plaintiffs that, if some detriment has accrued to the defendants, then this could have been proved by evidence. However, particularly when notice of the claim is given years later, the type of detriment often will be difficult to demonstrate, except by some exhaustive review of the financial structure and operations of the defendant and/or his insurer. This would be a matter of some difficulty in the present case, having regard to the international character of the parties and the changes in exchange rates which occurred during relevant periods. It would be unfortunate that awards of interest should depend upon such inquiries, or that where, for example, proceedings are grossly delayed by reason of the rate at which the plaintiff elects to proceed, the defendant should face an order of interest throughout the period, unless he is able by evidence to pinpoint and prove some particular detriment.

            [Emphasis added]

42                  To similar effect was a conclusion of Carr J in Golden West Refining Corporation Ltd v Daly Laboratories Pty Ltd (unreported, 16 February 1995, Carr J) where his Honour refused to order pre-judgment interest for a period between the time the cause of action arose and the commencement of the proceedings and the delay was caused by the successful applicants.  Also to similar effect was the judgment of Mansfield J in Gibbett v Forwood Products Pty Ltd (No 2) [2001] FCA 434 where again pre-judgment interest was not awarded for a period (occurring while the litigation was on foot) during which there was delay resulting from the conduct of the successful party who sought interest.  In both matters the question of whether pre-judgment interest should be ordered in full was approached on the basis that such interest is awarded because the successful party has been “kept out of its money”.  In those cases, the successful party had been responsible for some of the period in which they were “kept out”.  An additional consideration referred to by Mansfield J was that the general objective of a provision such as s 51A might be to encourage early resolution of litigation: see MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657 at 663, and that purpose would not be served by awarding pre-judgment interest for a period occasioned by the delay of the successful party.

43                  This case presents some unusual features.  The delay complained of occurred after judgment was given and was not delay before judgment extending the time by which judgment was given.  That is, it has not been argued that Hanave was “kept out of its money” (when speaking of the damages awarded under s 82 of the Trade Practices Act 1974 (Cth) (“TPA Act”)) because of delay for which it was responsible, occurring before judgment was given in its favour.  But I should note that the statement of claim was not amended to raise the allegation concerning nondisclosure of the incentive payment (the point on which Hanave succeeded before the Full Court) until 2 May 1997, almost three years after the damage was suffered and over a year and a half after the commencement of the proceedings (see (1998) ATPR 41-658 at 41,323).  What is relied on is the considerable delay in seeking pre-judgment interest.  There is no real reason why the application should not have been made before judgment was given in November 1999.  There is certainly no reason at all why the application should not have been made immediately after the judgment of the High Court in April 2002.

44                  A Full Court considered the range of circumstances which might give rise to “good cause” in Australian Guarantee Corporation Ltd v Border Printing Services Pty Ltd (1989) Q ConvR 54-319.  In that matter a lessee of goods sought damages under s 82 of the TPA Act because of misleading representations made by the lessor.  The lessor cross-claimed seeking all rent due under a term of the lease (clause 8) which was enlivened by the repudiation of the lease by the lessee.  The lessor failed on that claim because the primary judge viewed the clause as imposing a penalty and unenforceable.  The lessor did succeed in obtaining damages at common law in its cross-claim.  The primary judge refused to order interest on the sum recovered by the lessor.  As the Full Court understood the approach of the primary judge, his Honour had done so for reasons which included that clause 8 was obscure and the lessee would not have known what their obligations were at the time of the repudiation of the lease agreement.  The Full Court accepted this was a relevant consideration.  Their Honours said:

It is neither possible nor desirable to define what will constitute good cause; each case must be considered by reference to its own circumstances.

45                  In my opinion, the failure of Hanave to seek pre-judgment interest before 20 February 2003 creates circumstances which constitute “good cause”.  These proceedings have been protracted.  That they have been, has not been the fault of any party.  However the fact that they have been protracted simply exacerbates the consequences of the delay of Hanave in making the application for pre-judgment interest.  Mr Tresidder was entitled to assume when the High Court gave judgment in April 2002 that all issues arising from the application of Hanave filed in September 1995 (concerning events in August 1994) had been settled to the extent they required judicial determination. Moreover had an application for pre-judgment interest been made before or at the time judgment was given in 1999, it probably would have been uncontroversial and Hanave would have gained the benefit intended to be conferred by s 51A.  It would have been unnecessary for the Court to engage in the type of adjudication reflected in these reasons.

46                  The importance of finality in litigation is well settled: see Bailey v Marinoff (1971) 125 CLR 529.  As the High Court pointed out in Gould v Vaggelas (1985) 157 CLR 215, the jurisdiction invoking the slip rule to make an order concerning interest on application made after judgment is to be exercised sparingly because to do otherwise would encourage carelessness by a party’s legal representatives and expose to risk the public interest in finality of litigation.  In this matter I am satisfied that, at the very least, Mr Burke has been careless in relation to Hanave’s rights to interest.  While it is true that he turned his mind to pre-judgment interest when he wrote the letter of 5 September 2002, he made no attempt to ascertain the legal basis on which interest might be payable and whether it was necessary to obtain an order from the Court.  He then believed Hanave was entitled to at least $375,000 but did nothing to secure payment of interest, even on that sum, beyond writing the letter of 5 September 2002.

47                  The respondents submitted during the hearing that if I did accept that the slip rule applied in these circumstances and I did not consider that the delay should deny any claim for pre-judgment interest, then I should use my discretion under s 51A to lower the amount of pre-judgment interest payable.  I am satisfied that I should follow this course.

48                  The parties made submissions on the issue of costs.  I propose that Hanave pay the respondents’ costs of this application.  The application has been made necessary by Mr Burke’s carelessness.  The respondents should not be required to bear the cost burden of the application even though Hanave has been partially successful and the application has been opposed.  That opposition was, in the circumstances, reasonable.

Associate:

Dated:              22 October 2003