Brown, N v Kingia Pty Ltd

[1985] FCA 387

Fract ice and F ' rocedurr - j u d g m e n t e n t e r e d i n d e f a u l t f i l i n g

defence - rialms under T rade F rx t i ces Ac and t a t common l a w -

wherrher s.51A of Federal Court Act applies - whethe r i n t e re s t can

be ciaimed on a c t i o n s u n d e r s t a t u t e a n d f o r at l a w - ef fec t , of s .79

of Judic ia ry Act upon pr -ovis ion iS ta te Supreme Court Act

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I	a l lowing	awards	of	i n t e r e s t	' i n	a l l	c o u r t s '	-	obse rva t ions
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I	concerninq	appt-opt- iace	order	c i rcumstances.	in
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T r a d e F r a c t i c e s A c t 1974 s.52, sub- s s .53 (aa ) , 53A(1) , ss.82 & 87

Federa l Cour t nZ A u s t r a l i a Act 1976 5.51A

J u d i c i a r v Act 1903 s .79

Supreme Court Act 1935 (W.B.) s.32

Supreme Court Act 1958 (Vic.) ss60 and 7 9 A

NELLA, BROWN & ORS v. K I N G I A Pm. LTD & ORS

No. GIA G18 of 1983

TOOHEY J.

FERTH

6 AUGIJST 1985

5OHN BAPTIST NELLA, CLIFFORD SYDNEY

aRmm, BARBARA SYBIL EROWN and

I A N WILLIAM BRUWN

Applicants

and

KINGIA FTY. LTD.

First Respondent

IUN DAViI! ASPHAR, PETER ANTHONY McCOMISH

and ROBERT WILLIAPl WATERS

Second Respondents

HILLDODD FTY. LTD.

Third Respondent

MINUTE OF ORDER

JUDGE W I N G ORDER :	Toohey J.
DATE OF ORDER	6 August 1985
WERE HWDE	Perth
THE COURT ORDERS THAT:

1. Judqrnent be entered fcr the applicants against the third

respondent f o r damages to 3, aesessed

2 . Pis thirl;, respnndenc pay tn the applicant5 their c n s t 5

of the application inc luding one-half of the rosts of

the applicants' motion fnr ~udqment.

Note: Settiement and entry nf orders i s dealt

wit'n in Order 36 of the Federal Court Rules

B E T W E E N :

JOHN BWTIST NELLA, CLIFFORD SYDNEY

BROWN, BARBARA SITBIL BROWN and

IAN WILLIAN BROWN

Applicants

and

KINGIA PTY. LTD.

First Respondent

i>N DA'iID ASPHAR, PETER ANTHONY McCOMISH

and ROBEXT WILLIAM WATERS

Second Respondents

HILLDnDn PTY. LTIS.

Third Respondent

C m : TOOHEY J.

6 Auqust 1985

REASONS FOR JUDGMENT

In these proceedings the applicants claim damayes

against all respondents. So far as the third respondent is

concerned, the applicants seek damages "pursuant to section 82 of

the Trade Practices Act in relation to the ... Third Respondents'

breaches of Sectlon 52 of the Act and damages at common law".

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Tine applicants have moved f o r judqment against the third

respondent by reason of that respondent's failure to comply with

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an order directinq it to file and serve its defence to the

5hCement Oi claim. 8:oLlnEel appear.1*5 fo r rile third respondent on

the hearing of the motlon but did not oppose the relief sought.

Mhat would otherwiss he a straight forward matter has become

compilcated because of a claim by t h e applicants that the:r should

have Iu~gment, nc t oniy f o r damages to be assessed, but also for

Interest on such sum as may be assessed. They have asked the

c'ourr: to direct, as part of the default judgment, that tine third

respundent pay interest at the rate of 13% per annum from 3 March

1981 (the date when Yne causes of action arose) until the

assessment of damages.

The causes of action arose before s.51A of the Federal

Court of Australia Act 1976 came into operation and the applicants

therefore rely upon the proposition that s.32 of the Supreme Court

A& 1935 of Western Australia is available to them.

Section 3 2 , which came into operation on 2 0 June 1983,

reads :

"32.(1)	In any proceedings for the recovery of any money (including any debt or damages
or the value of any goods 1 , the Court may
order that there shall be included, in the sum for which judgment is given, interest at such rate as It thlnks 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 when the judgment takes effect.
( 3 ) This section applies to proceedings in a
Local Court, except where the sum for which
judgment is given does not exceed $750."

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In support of the submission that s.32 of the Supreme

Court A c t b7as available to the applicants. their counsel relied on

the recent decision of a Full Court of this Court in Centrepoint

Freeholds Ptv. Ltd. v. T.N. Lucas Ptv. Ltd. (1985) A.T.P.R.

40-564. In that case Sweeney and Woodward JJ., Neaves J.

dissenting, held that the primary judge in proceedinqs aqainst

Centrepoint for damages f o r breaches of ss.52. 53(aa) and 53A(1)

of the Trade Fractices Act 1974 and fraudulent misrepresentations,

should have qlven effect to s.79A of the Supreme Court Act 1958 of

Victoria. Subsection 79AI 1) reads:

"79Ail) The Judue upon application shall in

all actions for the recovery of debt or

damages give damages rn the nature of

interest at such rate not exceeding the rate

for the time beina fixed under section 2 of

the Penaltv Interest Rates Act 1983 as he

thinks fit from the commencement of the

action until the entry of the judgment unless

good cause is shown to the contrary over and

above the debt	or damages awarded by the
court or jury."

The reasoninq which lead the majority to their

conclusion may be summed up in this way:

1. Section 7 9 of the Judrclarv Act 1903 provides:

"The laws of each State or Territory,

including the laws relatinq to procedure,

evidence, and the competency of witnesses,

shall, except as otherwise provided by the

2 .	Section i % A of the Sunreme Court	A c n	(Vic.	I i- in Parc	VI1 of
thar: Act, s.dG of whch reads:

"The several rules of law enacted by Part

VI1 of this Act shall unless express

provision 1 s utherrlise made be in force and

receive effect in all courts whatsoever so

far as tine matters to which such rules relate

shall be respectably coqnizable by such

court 5. I'

3 . The award of damages in favour of T.N. Lucas Pty. Ltd. was based upon findinqs in its favour on the cause of action arising under sub-s.52(1) of the Trade Practices Act and

causes ai action arising under the common law in the exercise

of the Court's accrued lurisdiction. The latter causes of

action could have been tried in the courts of Victoria in

which case judgments upon them could have included damaues by

way of interest pursuant to s.7SA.
4 .	Section 7 9 of the Judiciary Act is not limited tn la575
relating to procedure, evidence and the competency of
witnesses. The section includes those matters in the laws of
the state which, subject to the exceptions set out therein, are binding on all courts exercisina federal jurisdiction in
that state. The policy of the section is that, unless
otherwise provided by the Constitution or the laws of the
Commonwealth, there should be uniformity in the law

applicable to the resolution of a matter whether it is tried

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5. Section 79A is not so much concerned with the definition and

regulation of the powers and proczdures of the Supreme Court

of Victoria as lt is with conferrinq upon a party, entitled

t o recovery of a debt or damaues, an additional right to

receive damages by way of interest. "The command to the judge 1s merely the mean6 chosen to effect the desired end" tat p.46.5551.

G . The lanquaqe of 6.60 of the Supreme Court Act (Vic.), in

speakinn of "all courts whatsoever", is wide enough	to apply
tu the Fedet-a1 Court.

The Court remitted the application to the primary judge

"for the purpose of his determining all questions relating to

damages by way of interest" (at p.46,556). It should be noted

that the Court found it unnecessary to express an opinion on an

alternative submission by T.N. Lucas Pty. Ltd. that the power to

award damages under ss.82 and 87 of the Trade Practices Act itself

included a power to award interest.

Neaves J. aqreed wlth the primary judge that the

lanuuaue of 5 5 . 8 2 and 87 of the Trade Practices Act was not apt to

require or authcrrlse an award of damages by way of interest to

recoup 1055 due entirely to delay in payment of a sum ultimately

"in my opinion. to conclude that sec.79A was,

by virtue of sec.79 of the Judiciary Act

1903, made binding on the learned primary

Judae when determining the amount for which

judument was to be entered in this case would

not simply be giving to that provision an operation which its language is wide enough to encompass but would be givinq It a

different meaning from that which t bears as

an enactment of the State of Victoria. It

would involve converting it into a provision

requiring a judqe of this Court to carry out

the function which by its terms it confers on

a judqe of the Supreme Court of Victoria when

hearins and determining an action of the kind

to which it refers. This, in my view, it is

not permissible to do" (at p.46,552).

However persuasive the reasons of Neaves J. may be, I am

bound by the views of the majority. But it is of some importance

to determine the ratio decidendi of the majority decision.

Certainly Sweeney and Woodward JJ. left open the questlon whether

the power to award damages under ss.82 and 87 of the Trade

Practices Act itself includes a power to award interest. Because

their Honours spoke nf the Federal Court exercising federal

jurlsdlction in Victoria nd, in the course of doing so, enforcinw

t-i.rrhta w i l l c h derive from rhe la?^ of cha.; Srate and because they

spoke of a policy or unlfeamlty in xhe law applicable te a matteu, whether tried in a federal court in a state or by a court of that

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state, I Lake their Honours to be holding that s.7924 is applicable

where a feieral court has, in the exercise of its accrued

jurisdiction, awarded damages on a cc-mmon law cause of action. In

other words, I do not understand Sweeney and Woodward JJ. tu have

heid that in the case of judgment for damages for breach of a

section of the Trade Practices Act, a similar conclusion

necessarily operates.

Counsel for the applicants submitted that, in the event

of a judgment in default of the filing of a defence, the judqment

need not, indeed should not, identify a particular cause of

action. It should simply be a judgment for damages to be

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assessed. The basis of this submission was that, in the absence

of a defence, all the allegations in the statement of claim should

be taken to be admitted. If, therefore. a statement of claim

asserts contraventions of the Trade Practices Act and conduct

giving rise to a cause of action at common law, a judgment by

default contains an implied recognition of the applicants'

entitlement to damages both by statute and at law. Although the

submission was not taken further, I assume that counsel would

submit that on an assessment of damaqes, whet-e one cause of action

may produce a different monetary result from another, the

applicant may opt for one or other measure of damages or may ask

the court to assess damages under both heads and then opt	for the
higher amount.

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1317 r n e r . + ~ t - ~ p . c r . - s i r % y < ~ ~ , n ~ : r m n I acked cct~n=rl E , I ~ - ~i-~p

aopiicants whether iudgment wss being souqht f o r breach of the

Trade FractiaIes Act or at common law. The questzon was asked in

relation to the rciaim for interest. Counsel replied that damages

were souaht for breach of che Act. But I do not think that

counsel can be held to that statement in the sense that the form

of judgment to be entered against the third respondent must

identify the cause of action in respect of which damages are

claimed. I agree with counsel that judcrment should be for damages

to be assessed and that, in the absence of a defence, the matter wlll come before the Court for assessment on the basis that all

the alleqations in the statement of claim, at any rate all

relevant alleyations, must be taken to have been established. See

Youna V. mamas C18921 2 Ch. 134. The customary form of judgment

provided f o r in rules of court in this country does no more than

adjudge an applicant or plaintiff to be entitled to damages to be

assessed. The questlon here is not one of the extent to which a

judgment by default may operate as an estoppel, as to which see

i Kok Hoonq v. Leonq c'heona Kwency Mines Ltd. C19643 B.C. 993.

Holding, as I do, that the applicants are entitled to

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I judqment for damaues to be assessed, the majority decision in

I Centrepoint Freeholds Pty. Ltd. v. T.N. Lucas Ptv. Ltd. compels

the conclusion that the applicants are entitled to invoke s.32 of

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the Supreme Court Act ( W . A . ) and to ask the Court f o r an award of

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interest, at any rate in respect of damages assessed on a common

law cause of action. Althouah the applicants' causes of action

arose before s.33 took effecr,, the section has been held

retrospective in its operation. Brassev v. Graham (unreported

There is hnwever a uuestinn whether s.3’1 may be lnvoked

at this staxTe GC the proceedinas, and if 50 to what extent, or

whether a determinatlon of the rate of interest. the period for

which it is awarded and of the amount involved 1s a matter for the

iour-t when damaqes have been assessed. In the present case

ludcrment will be entered by direction of the Cnurt and not by

reason of some administratlve step. In consequence the decision

in Citv Mutual Life Assurance Society Ltd. v. Giannarelli C19773

V.R. 463, in which McInerney J. held that s.79A of the Supreme

Court Act (Vir. did not permit the Prothonatory or an officer on

his staff to add an amount hy way of interest to a judgment

entered in default of appearance, has no application.

However sUb-s.32(1) of the Supreme Court Act (Gi.A.1

empowers the Court, in proceedings for the recovery of damaqes, to

order “that there shall be Included, in the sum for which judgment

is given, interest at such rate as it thinks fit on the whole or

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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 when

the judgment takes effect“.

Counsel f o r the applicants has sought no more than that

the ]udgment for damaues to be assessed shall include interest an

the sum assessed at the rate of 13% per annum from 3 March 1981 to

the date of assessment. The amount on which interest is payable,

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In my n e w sub-s.32(1) contemplates that Interest shall

he included in rhe s u m f o r 1;hich judgment is given, =hat is that

damages must first be assessed before the Court decides whether. -

in the circumstances. Interest shail be payable and if so at ~7hat

rate and for xhat period. I do not accept that it is appropriate

if Indeed it is within power for the Cuurt. at this stage of the

proceedings, to determine a rate of interest and the period in

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respect of which it shall be paid when there is, in the language

of the subsection, no "sum for which judqment is given". The

applicants do not face the problem that met the plaintiff in

Aru-Allan Veneer Ftv. Ltd. v. Public Trustee (19783 18 S.A.S.R.

428 where it entered judqment in default of defence for a

liquidated amount and then sought an award of interest on the

judgment debt for a period before judqment was entered. Jacobs J.

held that the relevant provision of the legislation of South

Australia did not empower the making of an award of interest after

final judqment had been entered. In the present case 5.32 of the

Supreme Court Act ( W . A . ) requires, m my opinion, that damages be

asseseed; thereafter, in respect of the judgment then given,

interest may be included. In any event the determination of

questions relating to interest is more appropriately dealt with by

the Court when assessing damages.

For these reasons I hold that the applicants are

entitled, at this scage, only to judqment against the third

respondent for damaqes to be assessed and for custs to be taxed.

li.

I c e r t i f y t h a t t h i s and the ten preceding

pages are a t rue copy of the Reasons for

Judgment herein of h i s Honour Hr.	Jus t ice
Toohey.

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W ' Associate

Dated: 6 August 1985

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