Arnold v Royal & Sun Alliance Workers Compensation (SA) P/L and Anor No. Scciv-02-1354

[2003] SASC 28

ARNOLD v ROYAL & SUN ALLIANCE WORKERS
COMPENSATION (SA) PTY LTD and ANOR
[2003] SASC 28

Magistrates Appeal:  Civil

1. PERRY J.  (ex tempore)    The appellant appeals on questions of interest and costs following the entry of a judgment in his favour in the civil jurisdiction of the Magistrates Court.

2. The appellant was the plaintiff in the Magistrates Court. He issued proceedings on 2 December 1999, claiming to enforce an award of a lump sum pursuant to s 43 of the Workers Rehabilitation and Compensation Act 1986 with respect to a compensable disability resulting in his incapacity for work. The disability took the form of a skin disorder.

3. In June 2000 the defendants, who are the respondents to the appeal, paid $20,164.94 to the appellant, which was the amount which he claimed in the proceedings.

4. At that stage no judgment was entered in the proceedings. In the meantime the respondents instituted a separate action claiming $19,299.04 from the appellant by way of an alleged overpayment of weekly payments relating to the same disability. The overpayment was said to have arisen by reason of the fact that the appellant, unbeknown to the respondents, had returned to work during the relevant period of alleged incapacity.

5. In those other proceedings, judgment was entered in favour of the respondents on 30 January 2002 for the amount claimed, plus interest and costs.

6. The magistrate who heard the action, Mr Gun SM, described the appellant’s defence to those proceedings as an abuse of process.

7. The proceedings instituted by the appellant, being the subject proceedings, were then brought on for hearing. The question arose whether the appellant was entitled to judgment for the amount claimed, given that it had already been paid to him, and whether he was entitled to interest and costs from the date upon which the action was instituted, that is 2 December 1999 or in the case of interest, from some earlier date.

8. The magistrate hearing the action determined that notwithstanding the prior payment of the amount claimed, the appellant was entitled to judgment. She proceeded to enter judgment for $20,164.94. There is now no appeal against the entry of the judgment.

9. The magistrate then went on to deal with the questions of pre-judgment interest and costs.

10. Pre-judgment interest may be awarded pursuant to s 34 of the Magistrates Court Act 1991. Put shortly, that section obliges the court to award interest in favour of the party who recovers a money judgment “unless good reason is shown to the contrary”.

11. The appellant sought interest for approximately two and a half years, that is from February 1998 when his entitlement to a lump sum was said to have arisen, until June 2000 when the amount was paid. He sought interest at the rate of 6 per cent, which would have resulted in a calculation of approximately $2,500.

12. The trial magistrate referred to Wheeler v Page and Harris[1] and Maidment v Davis[2]. Those cases support the proposition that pre-judgment interest is intended to compensate a party for being kept out of his or her money. The contrary contention that the award of interest is based on the fact that the defendant had the use of the money during the period in question has long since been rejected by the courts.

    [1] (1982) 31 SASR 1.

    [2] (Unreported) [2000] SASC 191.

13. The learned trial magistrate found that the substantial overpayment of weekly payments, which closely approximated the lump sum entitlement, or the balance of it, meant that the appellant had not been kept out of his money in the relevant sense. She drew an analogy with the decision in Batchelor v Burke.[3]

    [3] (1981) 35 ALR 15.

14. Despite the arguments put by Mr Stretton on behalf of the appellant, who has put every possible contention in favour of the contrary view, in my opinion the trial magistrate was right in coming to that conclusion. Her view was that within the meaning of s 34(1) there was “good reason” shown to the contrary with respect to the claim for the award of interest, and in my opinion, that was a correct conclusion.

15. With respect to costs, the award of costs is entirely within the discretion of the Magistrates Court, having regard to s 37 of the Magistrates Court Act. The trial magistrate rejected the contention that the appellant have no costs at all on the basis that he had behaved unreasonably. However, she awarded costs to the appellant for the period between the date upon which the action was instituted until the amount claimed was paid in June of 2000.

16. Mr Stretton has emphasised that the delay between June 2000 and the date of judgment was occasioned by the failure of the respondent to agree interest and costs when given an opportunity to do so, and that in those circumstances the award of costs should have covered the period to judgment.

17. It is true that the respondents took a stand, at the time when the matter was under discussion and before the matter was entered for trial, that it was not liable for costs. It has succeeded partially in the sense that it has been vindicated with respect to the period from June 2000. It is obliged to pay the costs down to that date.

18. Although the matter is not without some difficulty, and again Mr Stretton has very ably put the arguments to the contrary, in my view he has not demonstrated that the order made by the magistrate with respect to costs lies outside of a proper exercise of her discretion.

19. It follows that, in my view, the appellant does not succeed with respect to either the interest argument or the issue of costs.

20. The appeal is dismissed.

    JUDGMENT CITATIONS
    LISTED IN ORDER OF APPEARANCE IN JUDGMENT

    1. (1982) 31 SASR 1.

    2. (Unreported) [2000] SASC 191.

    3. (1981) 35 ALR 15.