Carraffa and Lofthouse as Joint and Several Trustees of the Bankrupt Estate of Santucci and Santucci v Tile Mart (Vic) Pty Ltd (No.2)
[2018] FCCA 3775
•20 December 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CARRAFFA & LOFTHOUSE AS JOINT AND SEVERAL TRUSTEES OF THE BANKRUPT ESTATE OF SANTUCCI & SANTUCCI v TILE MART (VIC) PTY LTD (No.2) | [2018] FCCA 3775 |
| Catchwords: BANKRUPTCY – Costs – interest – rate at which interest accrues – interest and costs ordered. |
| Legislation: Federal Circuit Court of Australia Act 1999 (Cth), s.76 Federal Circuit Court Rules 2001 (Cth) rr.1.05, 26.01 Federal Court Rules 2011 (Cth) r.39.06 |
| Cases cited: HK Frost Holdings Pty Ltd (in liq) v Darvall McCutcheon (a firm) [1999] FCA 795 |
| Applicant: | MICHAEL CARRAFFA AND JAMES LOFTHOUSE (AS JOINT AND SEVERAL TRUSTEES OF THE BANKRUPT ESTATE OF MICHAEL AND MARISSA SANTUCCI) |
| Respondent: | TILE MART (VIC) PTY LTD |
| File Number: | MLG 1488 of 2017 |
| Judgment of: | Judge Hartnett |
| Hearing date: | 3 July 2018 |
| Date of Last Submission: | 7 September 2018 |
| Delivered at: | Melbourne |
| Delivered on: | 20 December 2018 |
REPRESENTATION
| Counsel for the Applicants: | Ms Bateman |
| Solicitors for the Applicants: | Aitken Partners |
| The Respondent: | Not represented |
ORDERS
The Respondent pay the costs of the Applicant on a party and party basis as taxed by a Registrar of the Court.
The Respondent pay interest on the judgment amount from 29 March 2017 until 9 August 2018 fixed in the sum of $14,015.10.
The Respondent pay post-judgment interest on the judgment amount from 10 August 2018 continuing at the prescribed rate of 6% above the cash rate published from time to time by the Reserve Bank of Australia.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 1488 of 2017
| MICHAEL CARRAFFA AND JAMES LOFTHOUSE (AS JOINT AND SEVERAL TRUSTEES OF THE BANKRUPT ESTATE OF MICHAEL AND MARISSA SANTUCCI) |
Applicant
And
| TILE MART (VIC) PTY LTD |
Respondent
REASONS FOR JUDGMENT
On 29 March 2017, the Applicants, by their solicitors, made demand on the Respondent for the sum of $186,000. The Respondent failed to make payment of $186,000 or any part thereof, to the Applicants.
By application filed 11 July 2017, the Applicants sought, amongst declarations to be made by the Court and a judgment order, that the Respondent pay interest and costs to the Applicants.
On 9 August 2018 the Court ordered, relevantly:-
“…
(1) The Respondent pay to the Applicants the sum of $186,000.
(2) The Respondent pay to the Applicants Interest and Costs as agreed or failing agreement, as determined by the Court upon written submissions by the Applicants within 28 days hereof. The Applicants are to provide a copy of such submissions to the Respondent”
On 7 September 2018 the Applicants filed submissions on costs and interest.
The Applicants noted that on 22 August 2018, the Applicants had served a demand on the Respondent in the amount of $186,000 for which the Applicants had not received any payment.
The Court determines that costs shall follow the cause and that they are to be taxed, there being no agreement between the parties as to a costs quantum.
The Court’s power to award interest up to judgment is contained in s.76 of the Federal Circuit Court of Australia Act 1999 (Cth) (‘the Federal Circuit Court Act’). It provides, relevantly:-
“(2) A party to proceedings that are:
(a) in the Federal Circuit Court of Australia; and
(b) for the recovery of any money (including any debt or damages or the value of any goods) in respect of a particular cause of action;
may apply to the Federal Circuit Court of Australia or a Judge for an order under subsection (3).
Interest order
(3) If:
(a) an application is made under subsection (2); and
(b) the Federal Circuit Court of Australia or the Judge is not satisfied that good cause has been shown for not making an order under this subsection;
the Federal Circuit Court of Australia or the Judge must either:
(c) order that there be included in the sum for which judgment is given interest at such rate as the Federal Circuit Court of Australia or the Judge thinks fit on the whole or any part of the money for the whole or any part of the period between:
(i) the date when the cause of action arose; and
(ii) the date as of which judgment is entered; or
(d) without proceeding to calculate interest in accordance with paragraph (c), order that there be included in the sum for which judgment is given a lump sum in lieu of any such interest.”
In HK Frost Holdings Pty Ltd (in liq) v Darvall McCutcheon (a firm) [1999] FCA 795, at paragraph 10, Finn J said:
“It is neither possible no desirable to define what will constitute “good cause” disentitling a party … each case must be considered by reference to its own circumstances: Australian Guarantee Corporation Ltd v Border Printing Services Pty Ltd”
In the circumstances of these proceedings, as detailed in the reasons for judgment of 9 August 2018, there is “good cause” to order an interest amount.
As to the payment of interest, the Court shall order the Respondent pay interest on the amount of the judgment from 29 March 2017 to 9 August 2018, in accordance with s.76 of the Federal Circuit Court Act and thereafter, at the rate prescribed by r.39.06 of the Federal Court Rules 2011 (Cth) (‘Federal Court Rules’).
Rule 39.06 of the Federal Court Rules applies by operation of r.1.05(3)(b) and r.26.01 of the Federal Circuit Court Rules 2001 (Cth) (‘the Federal Circuit Court Rules’). Rule 1.05(3)(b) of the Federal Circuit Court Rules is as follows:-
“ (3) Without limiting subrule (2):
…
(b) the provisions of the Federal Court Rules set out in Part 2 of Schedule 3, apply, with necessary changes, to general federal law proceedings.”
Rule 39.06 of the Federal Court Rules is expressly stated in item 20 of Schedule 3 of the Federal Circuit Court Rules.
Rule 26.01 of the Federal Circuit Court Rules is as follows:-
“For paragraph 77(3)(a) of the Act, the rate of interest is the rate prescribed by the Federal Court Rules.”
The Respondent shall pay interest on the judgment sum from 29 March 2017 until 9 August 2018 at the rate of 5.5%. The basis of the pre-judgment interest calculation is 4% above the cash rate last published by the Reserve Bank of Australia in the relevant period. This is in accordance with the Federal Court Interest on Judgments Practice Note (GPN-INT). During the relevant period the cash rate was 1.5%.
Pre-judgment interest in the sum of $14,015.10 has accrued and is calculated as follows:-
29 March 2017 to 9 August 2018 (being 499 days) x 5.5% = $14,015.10
Thereafter, interest shall accumulate on the amount of the judgment outstanding at the rate as provided for in r.39.06 of the Federal Court Rules which is 6% above the cash rate last published by the Reserve Bank of Australia in the relevant period.
I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of Judge Hartnett
Date: 20 December 2018
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