Centrepoint FreeHolds Pty Ltd v T.N. Lucas Pty Ltd

[1985] FCA 156

Re: CENTREPOINT FREEHOLDS PTY. LTD.
And: T.N. LUCAS PTY. LTD.
VG Nos. 104 and 109 of 1984
Trade Practices - Damages
60 ALR 187 / 6 FCR 133
(1985) ATPR para 40 - 564

COURT

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Sweeney(1), Woodward(1) and Neaves(2) JJ.

CATCHWORDS

Trade practices - lease of commercial premises - findings of trial judge that representations made by lessor were misleading and deceptive and fraudulently made - whether conduct of lessee amounted to affirmation of agreement - whether lessee entitled to damages in nature of interest from the commencement of the action until the entry of judgment - further heads of damages raised by lessee's appeal. Costs - effect of payment into court under invalid notice of deposit - matters relevant to exercise of court's discretion.

Trade Practices Act 1974 (Cth.) ss. 52(1), 82, 87.

Judiciary Act 1903 (Cth.) ss. 77N, 79.

Supreme Court Act 1958 (Vic.) ss.60, 79A(1).

Federal Court of Australia Act 1976 (Cth.) s.52.

Federal Court Rules 0.23, 0.62 r.27.

Damages - Interest on damages pursuant to s 79A of the Supreme Court Act 1958 (Vic) - Damages awarded for misleading and deceptive conduct and for fraudulent misrepresentations - Applicant denied interest on damages - Appeal - Whether s 79 of the Judiciary Act 1903 (Cth) applied s 79A to the federal proceedings so as to authorise interest on damages - Whether s 52 of the Federal Court of Australia Act 1976 (Cth) excluded s 79A - Supreme Court Act 1958 (Vic), ss 60, 79A - Judiciary Act 1903 (Cth), ss 77N, 79 - Federal Court of Australia Act 1976 (Cth), s 52 - Federal Court Rules, O 23, O 62, r 27 - Trade Practices Act 1974 (Cth), ss 52(1), 82, 87.

Trade Practices - Whether damages in the nature of interest authorised - Trade Practices Act 1974 (Cth), ss 82, 87.

HEADNOTE

In appeals from a judgment awarding damages for breaches of s 52 of the Trade Practices Act 1974 and for fraudulent misrepresentations in relation to an agreement for lease, the applicant claiming inter alia, that the trial judge was in error in failing to hold that s 79 of the Judiciary Act 1903 was applicable so as to pick up the effect of s 79A(1) of the Supreme Court Act 1958 which permitted the judge to award damages in the nature of interest from the date of commencement of the action until the date of the entry of the judgment, and the respondent claiming inter alia, that the trial judge should not have ordered it to pay the applicant's costs but, rather the reverse, the respondent having paid into court a sum greater than the damages awarded:

Held: (1) (Per Sweeney and Woodward JJ, Neaves J dissenting) - Even though the right conferred by s 79A of the Supreme Court Act, namely a right to receive damages by way of interest unless good cause is shown to the contrary, is a substantive right, s 79 of the Judiciary Act 1903 still applied so as to pick up its effect and apply it to the action for fraudulent misrepresentation, since s 60 of the Supreme Court Act makes s 79A applicable in all courts. Further, s 52 of the Federal Court of Australia Act 1976 which provides for interest on a judgment debt from the date of entry of the judgment only, does not exclude the application of s 79A of the Act to federal proceedings. As the trial judge should have given effect to s 79A, the application for damages by way of interest would be remitted to him to enable him to give effect to that section and to exercise the discretion conferred by it in relation to all questions arising out of the application.

Australian National Airlines Commission v. Commonwealth (1975) 132 CLR 582, referred to (dicta of Mason J not followed).

State Bank of New South Wales v. The Commonwealth Savings Bank of Australia (1984) 58 ALJR 394; John Robertson & Co Ltd v. Ferguson Transformers Pty Ltd (1973) 129 CLR 65; Commonwealth v. Crothall Hospital Services (Aust) Ltd (1981) 54 FLR 439; Simonios Vischer & Co v. Holt (1979) 2 NSWLR 322; Maguire v. Simpson (1977) 139 CLR 362, referred to.

Hubbards Pty Ltd v. Simpson (1982) 60 FLR 430, not followed.

(2) (Per curiam): The trial judge's decision as to costs should not be disturbed, but in any event an award by the court of interest on damages would almost certainly result in the final award exceeding the sum paid into court, thus rendering nugatory the respondent's claim as to costs.

Observations by Sweeney and Woodward JJ on payment into court pursuant to O 23 of the Federal Court Rules and relying on Form 31 where protection as to costs is sought in relation to claims other than for debt or damages.

HEARING

Melbourne, 1984, November 20-23; 1985, April 22. #DATE 22:4:1985
APPEAL

Two appeals from judgment and orders of Jenkinson J awarding damages in relation to an agreement for lease for fraudulent misrepresentations and for breaches of s 52(1) of the Trade Practices Act 1974.

A H Goldberg QC and R A Finkelstein, for T N Lucas Pty Ltd.

P J O'Callaghan QC and A J Myers, for Centrepoint Freeholds Pty Ltd.

Cur adv vult

Solicitors for T N Lucas Pty Ltd: Holding Redlich & Co.

Solicitors for Centrepoint Freeholds Pty Ltd: Gregory & Co.

GFV

ORDER

1. The appeal of T.N. Lucas Pty. Ltd. be allowed with costs.

2. The order that T.N. Lucas Pty. Ltd. recover against the respondent the sum of $51,431.16 be set aside.

3. All questions as to the entitlement of T.N. Lucas Pty. Ltd. to damages in the nature of interest be referred to the learned trial judge to be determined by his Honour in the light of our reasons for judgment.

4. Otherwise the orders of the court be affirmed.

5. The appeal of Centrepoint Freeholds Pty. Ltd. be dismissed with costs.

6. Liberty to apply to the court as presently constituted be reserved to any party.
   
   (Note: Settlement and entry of orders are dealt with in order 36 of the Federal Court Rules)

Orders accordingly

JUDGE1

The facts which have given rise to these appeals, which by consent have been heard together, are conveniently set out in the reasons for judgment of the learned trial judge, as follows:

"Ttoollis Neophytou Lucas is a pastry-cook, born in Cyprus 56 years ago, who settled here in 1949. He worked as an hotel waiter, bought and conducted and then sold a suburban milk bar. In 1954 he bought a business in North Balwyn: cake shop and bakery, with a dwelling upstairs. The price he paid fell a little short of $7,000. He sold the business in 1971 for $40,000. In the year before sale the assets of Mr. Lucas and his wife, other than the assets of the business, exceeded their liabilities by more than $100,000. The surplus had been achieved by employing the profits of the business in the acquisition of real property. Mr. and Mrs. Lucas had also discharged out of those profits the expenses of rearing, and educating at private schools, their four children. In 1974 Mr. Lucas bought a similar business at "the Doncaster Shopping Town" for $8,000. He sold the business in November 1977 for $45,000. Mr. Lucas learnt the pastry and bakery crafts from tradesmen he employed at North Balwyn. All the stock of both businesses was manufactured in the shops : nothing sold was bought in. He and his wife worked in the shops, making and selling.

Mr. Lucas and his wife have at all material times been the only members, the only beneficial owners of the issued capital, and the directors of the applicant T.N. Lucas Pty. Ltd. The activities of the applicant with which this proceeding is concerned were in execution of a trust, accepted by the applicant in March 1979, of a fund for the benefit of Mr. and Mrs. Lucas and certain relatives of theirs. The powers conferred on the applicant by the trust deed authorised those activities.

By a deed dated 16 May 1979 the applicant and the respondent agreed for a lease by the respondent to the applicant of certain premises in the basement of a building in Bourke Street, Melbourne, known as the Centrepoint Mall, for a term of 4 years from a date to be ascertained in accordance with provisions of the deed. Pursuant to the provisions of the deed the applicant took on 10 October 1979, and for about 15 weeks retained, possession of the premises, and conducted therein a retail cake shop and bakery. Then the respondent excluded the applicant from possession of the premises, which the applicant has not re-taken. In this proceeding the applicant claims against the respondent damages in respect of conduct proscribed by s.52(1), s.53(aa) and s.53A(1) of the Trade Practices Act 1974, and constituting fraudulent misrepresentations, which is alleged to have caused the applicant to execute the deed, and damages in respect of breaches alleged of warranties, which the same conduct was said to have constituted, collateral to the execution of the deed, and damages for negligence in respect of the same conduct. The several statements of which the impugned conduct consisted are alleged in sub-paragraphs, alphabetically designated, of paragraph 4 of an amended statement of claim which was filed on 19 October 1982." (Lucas v Centrepoint Freeholds (1984) 52 ALR 467 at 468-9).

His Honour found that representations had been made on behalf of Centrepoint Freeholds Pty. Ltd. (Centrepoint) to Mr Lucas on behalf of T.N. Lucas Pty. Ltd. (the applicant) that agreements had been reached for the lease of premises in the basement of the Centrepoint Mall to "McDonalds" and to "Gilbertsons". His Honour also found that representations had been made that Centrepoint's intention was to treat the applicant's tenancy as upon the terms, including the terms as to rent, specified in the written application for tenancy, notwithstanding the terms of the deed presented by Centrepoint for execution by the applicant. The terms as to rent in the written application for tenancy provided for an annual rental of $27,680 with rental review by mutual agreement in two yearly periods; whereas the deed provided for an annual rent of $27,680 subject to adjustment in accordance with the movement in a specified price index over the period between the quarter ending 31 December 1978 and the quarter prior to the commencement date of the lease. His Honour found these representations to be false and to constitute contraventions of s.52(1) of the Trade Practices Act 1974 (the Act) and that they induced the applicant to execute the deed. He also found the representations concerning McDonalds and Gilbertsons to have been fraudulently made.

His Honour went on to consider the question of damages which he assessed in the sum of $51,431.16.

Both the applicant and Centrepoint have appealed from parts of his Honour's judgment.
Centrepoint's appeal

In its notice of appeal Centrepoint appeals from those parts of the judgment whereby it was ordered that the applicant recover against Centrepoint $51,431.16 and that the applicant's costs of the proceedings (including costs reserved) be paid by Centrepoint.

The first ground of appeal relied upon was that the learned trial judge should not on the evidence before him have decided that the applicant had not affirmed the agreement for its lease before it was dispossessed by Centrepoint on 25 January 1980.

Late in October 1979 the applicant received a statement by Centrepoint of its account with Centrepoint in respect of the tenancy. The rent was charged at a rate increased in accordance with the provisions of the agreement for the lease which we earlier explained. Charges were raised in respect of "apportionable outgoings" and in respect of the applicant's membership of an association of tenants for which that agreement also provided. After allowing the applicant credit in respect of $2,306.66 previously paid, as Mr Lucas believed for the first month's rent, and in respect of a proportionate part of the "advertising allowance" (to which reference is made in a letter dated 5 February 1979 from Centrepoint to Mr and Mrs Lucas), Centrepoint asserted that the balance due in respect of the period from 10 October 1979 until 30 November 1979 was $4,433.81.

By a summons issued out of the County Court of Victoria on 14 November 1979 Centrepoint sued the applicant as lessee and Mr and Mrs Lucas as guarantors for that balance (in the summons stated to be $4,457.47), together with interest on that sum at a rate of $1.82 per day from 14 November 1979 until payment or judgment. The evidence did not disclose when that summons was served.

A letter dated 16 November 1979 from the applicant's solicitors to Centrepoint Custodian Pty Ltd, a company associated with Centrepoint, was in these terms:-

"We act for T N Lucas Pty Ltd (the company) which is in occupation of the above-mentioned shops and which executed a lease document with Centrepoint Freeholds Pty Ltd in respect thereof. We also act for Vasiliki Lucas and Ttoollis Lucas.

Our clients relied upon representations made and warranties given by Centrepoint representatives that the Centre would open at a specified time which (in the event) was significantly earlier than the date upon which the Centre in fact opened. Indeed, as late as February 1979, letters to our clients confirmed that the Centre was to open in March 1979. When the Centre did not open in March, our clients were given further assurances as to an early opening date and were induced thereby to act to their prejudice.

Further, representations were made and warranties were given to our clients as to the nature of the other tenancies in the Centre, and these representations have now been discovered to be demonstrably untrue and the warranties have been breached.

The next matter concerns proceedings in the County Court at Melbourne S931016 by Centrepoint Custodian Pty Ltd against B & T Lucas'. Agreement was reached in negotiations with the lessor of the shops that all costs associated with the provision of three phrase power and as much electricity and other requirements as were needed for the establishment of the bakery and cake business to be established at the shops would be met by Centrepoint. In any event, it is noted that, on no view of the facts, are Mr & Mrs Lucas the occupants of the shop nor the proprietors of the business conducted thereat. The proceedings which have been instituted will be strenuously resisted.

The company has received from Centrepoint Custodian Pty Ltd a letter dated 24 October 1979 requiring payment of what are alleged to be 'apportionable outgoings' under the lease document that has been executed. Whilst the company would join issue in any event with its liability to pay all or any of the items which are claimed to be 'outgoings' and to contest the amount thereof, it is observed that the whole of those 'outgoings' are stated to relate to an assessment 'for the period to 30 June 1979'. The whole of the period to which the 'outgoings' relate therefore antedates the commencement date stipulated by your letter dated 3 August 1979. On no view of the matter, therefore, can the company be liable for any part of those 'outgoings'. Accounts rendered in reliance upon the same are manifestly without foundation, and the company denies liability to pay any part thereof. The company also disputes the purported increase in rental above the level of $2,306-66 per month.

In the circumstances, our clients have an entitlement to rescind and determine any tenancy or other transaction into which they or any of them may have entered and to claim damages from Centrepoint. They are, however, prepared to abstain for the time being from exercising their various rights pending your response to this letter. Their abstention is, however, not to be construed in any way as derogating from or an abandonment of the rights that they have or may have. Failing a response satisfactory to our clients within seven days, we are instructed that, without further notice to you, we are to take such steps as may be necessary to protect the position of our clients.

We should be pleased if you would bring the contents of this letter to the attention of the various Centrepoint companies, including Centrepoint Freeholds Pty Limited, the lessor of the premises.

The foregoing is not to be taken as an exhaustive statement of the matters of which our clients complain and they reserve to themselves the right to raise such other matters (including, for example, the flooding of the shops by the sprinker system) as they may be advised."

The letter dated 24 October 1979, to which reference is made in the letter just quoted, was from Pacific Shopping Centres Pty Ltd, another company associated with Centrepoint, not from Centrepoint Custodian Pty Ltd, and it was posted with the statement of account to which we have referred.

At the request of Mr Powderly, the credit manager of the group of companies which included Centrepoint, Mr Lucas called at an office in South Melbourne on or about 21 November 1979. Mr Powderly asked him why he would not pay the rent of his premises at the Centrepoint Mall. Mr Lucas asserted in reply that he had already paid the rent for October and that the amount claimed for rent was not "according to the original agreement" Mr Lucas claimed to have with Centrepoint. During the conversation a Mr Tallent, who was sworn by Mr Powderly to be, at the time Powderly was giving evidence, the property manager of a company associated with Centrepoint, joined Powderly and Lucas. Mr Tallent said something during the conversation which Lucas understood to be an expression of Centrepoint's willingness to accept, for the time being, rent at the rate of $27,680 per annum (the amount specified in the form of application for a lease), together with a promise to send Lucas the next day a letter confirming what Tallent had said. No such letter was received.

His Honour was not persuaded that Lucas correctly reproduced in evidence the words Tallent used, nor that Lucas correctly reproduced the conversational context in which Tallent's statement concerning the rent was made, nor that Lucas's understanding of what Tallent said was justified by the words Tallent spoke. His Honour said:

"It is not that I doubt Lucas's veracity in relation to the conversation, but the evidence of Lucas and Powderly leaves me uncertain what was said."

On 27 November 1979 the applicant's solicitors received from Centrepoint's solicitors a letter in these terms:-

"Your letter to our client dated 16 November 1979 has been referred to us and is to be answered in the near future."

"In the interim kindly refrain from directing further correspondence direct to our client."

On or about 8 January 1980 the applicant received from Centrepoint's solicitors a notice in these terms:-

"To: T N LUCAS PTY LTD of 8 The Moor, North Balwyn, being the Lessee of shops No(B.01) and (B.02), Centrepoint Mall, Bourke Street, Melbourne, pursuant to a Lease dated 16th May 1979 made between you and Centrepoint Freeholds Pty Ltd of 158 City Road, South Melbourne.

BY THE ABOVE-MENTIONED LEASE you the Lessee covenanted to (interalia) -

(i) Pay to the Lessor throughout the said term thereby created annual rental in the sums therein specified by equal calendar monthly instalments in advance.

(ii) Pay to the Lessor the Lessee's proper proportions of the apportionable outgoings as estimated in advance by the Lessor and charged to you the Lessee in accordance with the provisions of Clause 6.02.

(iii) Pay to the Lessor interest at the rate of fifteen per centum per annum on any rentals or other moneys payable by the Lessee the reunder and remaining unpaid (whether demanded or not) for seven days such interest to be computed from the date upon which moneys in question became due and payable to the date upon which they are fully paid to the Lessor.

THE ABOVE-MENTIONED COVENANTS have been broken and the particular breaches complained of are:-

(a) That you the said Lessee have failed to pay to the Lessor the monthly instalments of the annual rental reserved by the Lease assessed and applicable to the calendar months of October, November, December 1979 and January 1980.

(b) That you the said Lessee have failed to pay to the Lessor the Lessee's proper proportions of the apportionable outgoings assessed by the Lessor and charged to you pursuant to Clause 6.02 of the Lease, the particulars whereof have been notified to, and are known to you.

(c) That you the said Lessee have failed to pay to the Lessor interest at the rate of fifteen per centum per annum on any rentals or other moneys payable by you to the Lessor and remaining unpaid for seven days.

THEREFORE TAKE NOTICE that Centrepoint Freeholds Pty Ltd, the Lessor of the above-mentioned premises, requires you within fifteen days after the date of service of this Notice upon you to remedy the afore-mentioned breaches of covenant in so far as the same may be capable of remedy by you.

AND FURTHER TAKE NOTICE that in the event of you the said Lessee failing to comply with this Notice within the time aforesaid it is the Lessor's intention to re-enter upon his demised premises and determine the said Lease.

DATED the 7th day of January 1980. Madden Butler Elder & Graham.

Signed by the said Madden Butler Elder & Graham of 500 Collins Street, Melbourne as duly authorized solicitors and agents for Centrepoint Freeholds Pty Ltd."

At about the same time the applicant's solicitors sent to Centrepoint's solicitors a letter, dated 8 January 1980, in these terms:-

"We refer to our letter dated 18 November 1979, your letter dated 27 November 1979, and our more recent attempts to communicate with you by telephone, and now advise that our client is contemplating to vacate the shop premises if no response is received within 14 days of the date hereof.

We further advise that as a result of the flooding of our client's shop, at least one of its employees has suffered injuries and will be seeking damages."

The "monthly instalments of the annual rental reserved by the Lease" (to which the notice dated 7 January 1980 refers) exceeded the monthly instalments appropriate to an annual rent of $27,680 by reason of the operation of the provisions of the lease with respect to adjustment of the rent. Accounts claiming rent instalments in respect of the months of October, November and December 1979 and January 1980 had been rendered to the applicant: the instalments claimed exceeded the instalments which would have been payable in respect of an annual rent of $27,680.

Accounts had been rendered which claimed amounts in respect of "maint." by which "the Lessee's proper proportions of the apportionable outgoings assessed by the Lessor" was designated in those accounts. The agreement for lease did provide for estimation, "in advance", of apportionable outgoings and for payment of the estimated amount in advance, as well as for subsequent adjustment if the estimate should prove inaccurate.

The agreement for lease made provision for the payment of interest on moneys payable by the lessee under the agreement, but the provision made was for payment on demand and there was no evidence that any demand in respect of interest had preceded service of the notice dated 7 January 1980, unless the claim for interest in the summons issued on 14 November 1979 be regarded as such a demand.

While the applicant's leased premises were unattended and closed, agents of Centrepoint entered the premises and re-took possession thereof late on 25 January 1980, and thereafter Centrepoint excluded the applicant from possession of the premises.

The applicant had before "the commencement day" of the lease paid $2,306.66 to Centrepoint in respect of rent, but the applicant had otherwise made no payment to Centrepoint in respect of rent, "apportionable outgoings" or interest.

His Honour dealt with the question of affirmation as follows:

"In my opinion the applicant had not affirmed or disaffirmed the agreement for its lease before it was dispossessed by the respondent. In the letter dated 16 November 1979 the applicant's right to abstain for the time being from electing between affirmation and disaffirmation was asserted. The respondent's reply by the letter received on 27 November 1979 impliedly invited the applicant to defer election and to deferany other change in the course which the applicant was then following until the answer of the respondent should be received. I do not consider that the giving of the notice dated 7 January 1980 requiring remedy of breaches of covenants should be regarded as the answer for which the applicant had been, in effect, asked to wait. The giving of the notice was a course of action available to the respondent under the terms of the lease and constituted an assertion by the respondent that the legal relationship between the applicant and the respondent with respect to the shop was still regulated by the provisions of the agreement for lease. Such an assertion was not inconsistent with the assertions contained in the applicant's solicitors' letter dated 16 November 1979 (although allegations of breaches specified in the notice were contradictory of assertions in that letter), nor inconsistent with the intention expressed in the letter received on 27 November 1979. It may be inferred, from the terms of the letter dated 16 November 1979, that the applicant's directors then knew of the rights, which misrepresentation inducing the making of the agreement for lease conferred on it, to disaffirm or to affirm the agreement at its election. By continuing in possession of the shop the applicant may be said to have exercised rights which would not exist unless that agreement remained in force and to have thereby affirmed that agreement. But, as the letter suggests, and as I find, the applicant's directors and agents were not at that time aware of the falsity of the representation that the respondent would treat the applicant's tenancy as upon the terms as to rent which are stated in the form of application for tenancy. The accounts rendered and to be rendered before possession of the shop was re-taken by the respondent suggested that the respondent would not treat the tenancy as upon those terms, but the conversation between Messieurs Lucas, Powderly and Tallent on or about 21 November 1979 gave Mr Lucas ground for believing that the respondent would treat the tenancy as upon those terms. It might be said that no such a belief could be held in the face of the notice given by t he respondent on or about 8 January 1980. But even on 25 January 1980 the applicant's directors and agents could reasonably have expected an explicit answer to the letter dated 16 November 1979 and in all the circumstances I consider that the applicant's retention of possession of the leased premises until that time did not constitute an affirmation of the agreement for lease (see Cheshire and Fifoot: Law of Contract (3rd Aust ed) pp 324-5; Spencer Bower and Turner, op cit, paras 236-8, 288-93; and cases there cited; Sargent v ASL Developments Ltd (1974) 4 ALR 257; 131 CLR 634)." (Lucas v Centrepoint, above, at pp. 496-7).

It was submitted on behalf of Centrepoint that:

"The trial Judge's finding that the applicant had not affirmed the agreement for the lease of the premises was based on the fact that the Applicant's solicitors' letter of 16th November 1979 was responded to by letter from the Respondent's solicitors dated 27th November 1979 saying the letter would be answered and it never was. The learned trial Judge said that that letter impliedly invited the applicant to defer election and that at that time the applicant was not aware of the falsity of the representation that the Respondent would treat the tenancy as upon the terms as to rent stated in the tenancy application.

However that awareness must have existed by the time the notice of 7th January 1980 was served and the re-entry occurred on 25th January 1980. After those dates the applicant proceeded on the basis of the re-entry being ineffective, the agreement being on foot and affirmed and it being entitled to possession."

In support of the latter submission we were referred to the writ issued by the applicant out of the Supreme Court of Victoria on 8 February 1980, the relief sought in paragraph 4 and sub-paragraph 5(a) of the application filed in this Court on 26 October 1981 and the terms of paragraph 11 and 12(g) of the statement of claim filed with that application which were later amended by an amended statement of claim filed on 19 October 1982. These matters were said to be only consistent with the applicant having treated the agreement as being on foot on and from 25 January 1980.

The letter from the applicant's solicitors to Centrepoint's solicitors dated 8 January 1980 stated that "our client is contemplating to vacate the shop premises if no response is received within 14 days of the date hereof." Counsel for Centrepoint accepted that it could not really be said that the applicant had affirmed the lease prior to the expiration on 22 January 1980 of the period referred to in the letter, but maintained that the applicant had affirmed the lease by the time it was excluded from possession of the premises on 25 January 1980, and that this affirmation was further evidenced or underlined by the later conduct of the applicant.

Counsel for the applicant submitted that the events subsequent to 25 January 1980 referred to by Centrepoint and said to demonstrate that the applicant's continued possession of the premises from 22 January onwards amounted to affirmation of the lease were all explicable by reference to the strategies of the applicant's legal advisers, and the applicant's expressed willingness to resume possession was conditional upon Centrepoint's agreeing that the terms of the lease were as the applicant said they had been represented.

We consider that it was reasonable for the applicant to expect, up to January 25, that a reply would be received by its solicitors to their letter of January 8. In these circumstances there was ample evidence to justify his Honour's finding that the applicant had not affirmed the agreement for lease and we see no reason why it should be disturbed.

Reference will be made later to the only other ground relied upon by Centrepoint, that the learned trial judge should not have ordered that it pay the applicant's costs but rather, that the applicant should have been ordered to pay its costs.
The applicant's appeal

It will be convenient to turn next to the argument of the applicant based upon s.79 of the Judiciary Act 1903, which provides:

"The laws of each State or Territory including the laws relating to procedure evidence and the competency of witnesses shall except as otherwise provided by the Constitution or the laws of the Commonwealth be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable."

It was submitted that his Honour was in error in failing to hold that the section was applicable in the present case so as to pick up the effect of s.79A(1). of the Victorian Supreme Court Act 1958 which reads as follows:

"(1) The Judge upon application shall in all actions for the recovery of debt or damages give damages in the nature of interest at such rate not exceeding the rate for the time being fixed under section 2 of the Penalty Interest Rates Act 1983 as he thinks fit from the commencement of the action until the entry of the judgement unless good cause is shown to the contrary over and above the debt or damages awarded by the court or jury."

Section 79A is in Pt VII of the Supreme Court Act 1958. Section 60 of that Act provides:

"The several rules of law enacted by Part VII of this Act shall unless express provision is otherwise made be in force and receive effect in all courts whatsoever so far as the matters to which such rules relate shall be respectively cognizable by such courts."

In the present case, the award of damages in favour of the applicant was based upon findings in favour of the applicant on the cause of action arising under s.52(1) of the Act, and causes of action arising under the common law in the exercise of the accrued jurisdiction of the court. These latter causes of action would otherwise have been tried in the courts of the State of Victoria and judgments upon them could have included damages by way of interest in accordance with s.79A.

Section 79 of the Judiciary Act is not limited to laws relating to procedure and evidence and the competency of witnesses but includes them in the laws of the State which subject to the exceptions set out in the section are binding on all courts exercising federal jurisdiction in that State. The policy of that section is that except as 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 in a federal court in that State or by a court of that State. On principle, it seems that this policy should apply in a case such as the present to a judgment based upon the law of the State.

Since judgment was delivered by the learned trial judge the High Court has had occasion to consider the question of the effect of s.79 of the Judiciary Act in a remitter application in State Bank of New South Wales v The Commonwealth Savings Bank of Australia (1984) 58 ALJR 394, 53 ALR 625. Gibbs CJ (at ALJR p.397, ALR p.629) referred to the view expressed by Mason J in Australian National Airlines Commission v Commonwealth (1975) 49 ALJR 338, that s.79 did not render the provision in the Supreme Court Act 1970 (NSW) which gave the Supreme Court of New South Wales power to award interest applicable to proceedings in the High Court, and went on to say:

"If that view is correct, of course s.79 equally does not render s.94 applicable in the Federal Court. The expression of opinion made by Mason J. was unnecessary for his decision, since the action in that case was not commenced until after the Supreme Court Act had come into operation and s.16(1) of that Act made it clear that s.94 was not intended to apply to proceedings already commenced, with certain exceptions which Mason J. held inapplicable. The operation of s.79 of the Judiciary Act in a case such as this raises very difficult questions, as the differences of opinion manifested in John Robertson & Co. Ltd. v. Ferguson Transformers Pty. Ltd. (1973) 129 C.L.R. 65 reveal.

Without having heard full argument I would not express any concluded opinion on the question whether s.79 does render s.94 applicable to proceedings in this Court or in the Federal Court."

The opinion expressed by Mason J was adopted by Lockhart, J in Hubbards Pty Ltd v Simpson, (1982) 41 ALR 509 at 525-6.

In Robertson's case Gibbs J (as he then was) held (at p.89) that a South Australian statute of limitations did not, standing alone, refer to actions brought under s.11 of the Australian Industries Preservation Act and when applied by virtue of s.79 of the Judiciary Act, it did not get an extended meaning so as to include such actions. His Honour said (ibid):

"If the right owed nothing to State law, and the remedy could only be pursued in a federal court, the State Parliament could not legislate either to extinguish the right or bar the remedy".

(In the present case, the learned trial judge found in favour of the applicant against Centrepoint both in respect of breach of the common law and of contravention of s.52(1) of the Act. (52 ALR at p.480). He then turned, in the first instance, to consider damages for deceit. In the course of doing so, his Honour held (at p.514) that the applicant's claim for interest could not be justified by reference to s.79. However, it is clear that the cause of action for deceit owed everything to the law of the State of Victoria including the common law.)

McTiernan, A.C.J., held (at p.75) that on the true construction of the State statute it was not applicable to a proceeding under s.11, which was not an action "for penalties damages or sums of money given to any party by any statute."

Menzies J expressed the opposite opinion (at p.80) and went on to say that:

"the words "in all cases to which they are applicable" in s.79 must mean, therefore, cases in which this Court is exercising federal jurisdiction in the State and to which the State law would in terms apply were it not that the proceedings are in the High Court. I have had the advantage of reading the judgment of Mason J and I agree with what he has written in fuller explication of the function of s.79 of the Judiciary Act".

(In the present case this Court is exercising federal jurisdiction in the State of Victoria and in the course of doing so is enforcing rights which derive from the law of that State. It seems hardly appropriate to construe s.79 in a fashion which would make part only of that law applicable to the grant of the appropriate relief, so that there would be a difference between the award to be made in this Court and that which would be made in a State court in respect of the identical cause of action, namely deceit.)

Walsh J (at p.84) said that the State statute "should be held not to include in the actions to which it relates an action which could never be brought in any court of that State".

Mason J (at p.95) observed that "the broad purpose of s.79 is to ensure that the laws of the States are applied by courts in the exercise of federal jurisdiction. In general that purpose is achieved by the application of a State law according to its terms". His Honour said:

"To ensure that State laws dealing with the particular topics mentioned in the section are applied in the exercise of federal jurisdiction by courts other than State courts, it is necessary that State laws be applied according to the hypothesis that federal courts do not necessarily lie outside their field of application. Section 79 requires the assumption to be made that federal courts lie within the field of application of State laws on the topics to which it refers, at least in those cases in which the State laws are expressed to apply to courts generally. This departure from the general principle that the section requires a State law to be applied according to its terms is justified, indeed demanded, by the clear requirement that State laws on the topics mentioned are to be applied in federal jurisdiction. Whether that requirement supports the broader view that a similar approach is to be taken in applying s.79 to substantive as well as procedural laws it is not now necessary to determine."

His Honour held that the State statute was made applicable by s.79 to the proceeding in the High Court.

In Australian National Airlines Commission v Commonwealth (1975) 49 ALJR 338, the opinion expressed by Mason J was based upon his Honour's characterisation of the Supreme Court Act (at p.340) as "a statute designed to define and regulate the powers and procedures of the Supreme Court".

With all respect to this opinion, it seems to us that s.79A of the Victorian Supreme Court Act 1958, while it addresses its command to the judge, is not so much concerned with the definition and regulation of the powers and procedures of the Court as it is with conferring upon a party entitled to recovery of a debt or damages an additional right to receive damages by way of interest unless good cause is shown to the contrary. The command to the judge is merely the means chosen to effect the desired end.

Blackburn J in Commonwealth v Crothall Hospital Services (Aust) Ltd (1981) 36 ALR 567 at 571, pointed out that the fact that a right is created by a section of an Act (in that case the Supreme Court Act 1970 of New South Wales), which is almost entirely procedural, does not mean that the right itself is procedural.

In Simonius Vischer & Co v Holt and Thompson (1979) 2 N.S.W.L.R. 322, at 336 Moffit, P. said:

"Thus, although a provision is made in a statute dealing with procedural matters, and itself is procedural in form by providing a power exercisable only in the course of proceedings, the provision, on examination, may not be procedural only, and may confer a new substantive right, or destroy a past immunity. Section 94 is in a procedural statute and, as indicated, is procedural inform; but the power given is to create an obligation of a kind which did not previously exist, and which is different in nature from the right which did exist. A person owing money had immunity from any surcharge in the nature of interest until the person to whom the money was owed succeeded in obtaining a judgment. The enactment of s.94 removed that immunity. The order for the payment of interest pursuant to s.94 cannot be made unless the cause of action exists, but the order for interest and the obligation which arises from the order is distinct from the cause of action".

Returning to the judgment of Mason J in the Australian National Airlines Commission case (above), his Honour there said at p.340:

"No matter how widely it may travel in some respects s.79 does not in my view pick up and apply in this Court a provision which empowers a particular court of a state to make orders and enter judgments in proceedings in that court. The relevant powers of this Court are conferred by the Judiciary Act and the High Court Procedure Act 1903-1966, asamended; as I see it they are not to be supplemented by the operation of s.79 of the Judiciary Act in the manner suggested. Section 26A of the High Court Procedure Act, which provides that judgments of the Court shall carry interest, should be regarded as a comprehensive expression of the entitlement in this Court of a litigant to interest on damages to the exclusion of any provision in State law which would otherwise be made applicable by virtue of s.79".

So far as the first sentence of this passage is concerned, the present case can be distinguished because, by virtue of s.60 of the Supreme Court Act, s.79A is a provision applying to all Victorian courts having jurisdiction to determine "actions for the recovery of debt or damages". The language of s.60, when it speaks of "all courts whatsoever" is wide enough to apply to the Federal Court of Australia.

The balance of the passage, although unnecessary for his Honour's decision, as already noted, must of course have powerful persuasive influence in this Court.

Section 26A appeared in Part II of that Act, entitled "Procedure of the High Court", as part of Division 8, the title of which was "Judgment and Execution". The provision is now to be found as s.77N of the Judiciary Act 1903, in Division 5 of Part XA of that Act, and the titles remain the same.

Section 52 of the Federal Court of Australia Act 1976 provides that "a judgment debt under a judgment of the Court carries interest at such rate as is fixed by the Rules of Court from the date as of which the judgment is entered". It is to be found in Part VI of the Act under the heading "General" and the heading of the section itself is "Interest on Judgment".

As Ellicott J pointed out in the Crothall case (above, at p.585), historically "the question of interest on the judgment debt and the question of interest on the debt or sum certain and later on the money sued for have been treated as two separate matters and different considerations have been applied to them".

In our respectful opinion, s.52 should be regarded as dealing only with the question to which it in terms relates, namely interest upon a judgment debt from the date of entry. We do not consider that it should be construed as excluding the provision in Victorian law dealing with the award of "damages in the nature of interest" from the commencement of the action until the entry of judgment.

In our opinion, the learned trial Judge should have given effect to s.79A of the Supreme Court Act, which commands a trial judge to give damages in the nature of interest "unless good cause is shown to the contrary".

Counsel for the applicant stated that until the court made a finding as to whether there was an entitlement to interest, it was impractical to make submissions as to the rate and amount of interest.

His Honour saw and heard the witnesses and we think it preferable that he should hear the necessary submissions and exercise his discretion under the section, rather than that we should attempt to do so. The appropriate order in respect of this aspect of the case would be that the application be remitted to his Honour for the purpose of his determining all questions relating to damages by way of interest.

We do not find it necessary to express any opinion on the alternative submission of the applicant that the power conferred upon the court to award damages under the Trade Practices Act ss.82 and 87 itself includes a power to award interest.

The next issue raised in the applicant's appeal related to this finding:

"A further item of damage claimed was interest on moneys advanced by Mr. and Mrs. Lucas to the applicant and applied by the applicant in discharge of liabilities incurred by it in connection with the tenancy of the Centrepoint premises or in connection with the establishment or the conduct of the business in those premises. The applicant had neither funds nor bank account during the relevant period : the funds were advanced by Mr. and Mrs. Lucas and cheques in discharge of the applicant's liabilities were drawn on their account. The evidence justified a conclusion that the moneys provided were by way of loan and not gift, but not a conclusion that the applicant had incurred a liability to pay interest to Mr. and Mrs. Lucas on the money lent. I therefore hold that the claim cannot be sustained, without expressing any opinion whether, if the applicant had incurred a liability to pay interest to Mr. and Mrs. Lucas on the moneys advanced, the amount of the liability would have been recoverable as damages in this proceeding". (52 ALR at pp.506-7)

His Honour was invited to treat the lenders, Mr and Mrs Lucas, and the borrower, the applicant, as if they were one entity, but upon the facts as he found them, he regarded it as impossible to do so. His Honour distinguished the present case from Yorke v Ross Lucas Pty Ltd and Others (1982) 45 A.L.R. 299. He found that "the overdraft on which interest was charged was not the applicant's, nor did the applicant incur, as I have found, a liability to pay interest on the moneys provided to it by Mr and Mrs Lucas".

These findings were clearly open to his Honour upon the evidence. We see no reason to disturb them and regard them as fatal to this ground of the applicant's appeal

The applicant further submitted that his Honour should have awarded damages in respect of loss of profits and loss of capital gain for a period longer than the period of one year specified by the applicant in the particulars of its claim, because he observed that "the evidence might have justified a finding that the period was 'a little longer'". In our opinion, no good reason has been shown to justify this ground of appeal, particularly bearing in mind Centrepoint's valid termination of the lease and the applicant's duty to mitigate damage.

The applicant also challenged as unreasonable his Honour's findings that the applicant should have taken steps to obtain an order restraining Centrepoint taking possession of the premises or should have paid rent at the rate of not less than $2,015 per month, the amount provided in the written application for tenancy, which his Honour found applicable. We see no reason to disturb these findings. Accordingly we would not allow the appeal so far as it related to the disallowance by his Honour of the claim for $8,000, being alleged loss of stock on the premises at the time of Centrepoints re-entry.

There was very little evidence as to this stock or the precise circumstances in which it came to be wasted. In any event its loss was related to the re-occupation of the premises by Centrepoint rather than to Centrepoint's deceit. His Honour held the re-occupation to have been lawful and that finding was not challenged before us.

In respect of the applicant's claim for wages said to have been payable to Mr and Mrs Lucas by the applicant it was submitted that all three should have been treated as the one entity. Alternatively, it was said that "it should be presumed that wages would have continued to be paid to Mr and Mrs Lucas".

His Honour found (at p.505) that the applicant would probably have made a trading profit in the conduct of the business at Centrepoint during the year ended 31 April 1980 of about $5,000. In arriving at this figure, he treated as an expense, by which trading profit would have been reduced, salary of $200 per week to each of Mr and Mrs Lucas, because he thought that they would have caused the applicant to pay those salaries to them, and continued (at p.506):

"Each of Mr. and Mrs. Lucas has, if I am correct in that finding, lost that amount of $10,400 in respect of that year, although each will, if my findings are correct concerning the applicant's liability to pay each of them $3000 for their work in the business at the Centrepoint Mall, gain $3000 in respect of his work during a period of 15 weeks in that year. But the loss is theirs, not the loss of the applicant, and is not in my opinion recoverable as damages by the applicant."

During the course of the trial, there was discussion as to whether Mr and Mrs Lucas would seek leave to be added as applicants but, after due deliberation, they decided not to do so. We see no reason to disturb his Honour's findings on this issue.

The last matter referred to by the applicant was the deduction of $7,000 which was made from the item of damage in respect of purchase of equipment. This was the amount which it was found (at p.499) that the applicant could have recovered on the sale of the equipment, if it had exercised reasonable care to mitigate its loss. No argument was addressed to us in support of this ground of appeal and we do not regard it as having any substance.
Centrepoint's appeal

It is convenient now to return to the second main ground of Centrepoint's appeal. This was based upon the payment into court which it made during the first day of the trial of an amount of $65,000. This was a greater sum than the damages of $51,431.16 which his Honour awarded to the applicant, in the light of the undertaking of Centrepoint that it would not seek to recover any part of certain costs incurred by it in respect of the preparation of the premises for occupation by the applicant or in respect of its occupation of them until 25 January 1980. Had this undertaking not been given, the damages might have been increased by some $12,500 (a sum calculated by counsel for Centrepoint) or some other appropriate order made.

His Honour held (52 ALR at 528; 1 FCR 371 at 384-5) that the notice of deposit of the money did not comply with the requirements of Order 23 of the Rules of Court in that it was expressed to be "in answer to all causes of action and all breaches alleged which the applicant claims" and the words "and all breaches alleged" are not to be found in the prescribed form (Form 31). The meaning of those words was held to be uncertain, although one possible interpretation was that they constituted a proposal concerning the money referred to therein which was inconsistent with the provision of Order 23 because it sought to protect officers of Centrepoint who were not parties to the action. Accordingly the notice was held to be so seriously lacking in compliance with the requirements of Order 23 that it was invalid and ineffective for the purposes of that rule. The argument before us failed to produce any satisfactory theory as to the intention of the draftsman of the notice or as to its true meaning.

His Honour held that the occasion had not arisen for the exercise of the court's discretion as to costs in accordance with the practice relating to the situation where a respondent makes a payment into court under Order 23 which exceeds the amount for which judgment is given. We respectfully agree with this finding. However this was not the end of the matter.

Order 62 rule 27(2) authorises the court to take the fact that money has been brought into court, and the amount of it into account in exercising its discretion as to costs. In applying this provision, his Honour reached the conclusion that as Centrepoint had substantially failed to comply with the Rules, it was inappropriate that the applicant should be deprived of costs incurred after the payment in for failure to recover more than that amount if it might reasonably have been perceived that there was a substantial possibility that it might have done so.

His Honour said (at 52 A.L.R. 528-9):

"In estimating the likely result of the proceeding the applicant's legal advisers would, I consider, have been confident of an award of damages upon the cause of action provided by s.82(1) of the Trade Practices Act 1974, but not confident of any other order in the applicant's favour. In paras.30 and 31 of my reasons for judgment claims for interest as components of the damages claimed are discussed and rejected. If the applicant's legal advisers had thought that the chance of success in obtaining some allowance in respect of interest was substantial, that evaluation of those claims could not in my opinion be considered unreasonable. Acceptance of one or other of those claims would probably have taken the award of damages above $65,000. In those circumstances I do not consider that the applicant's failure to accept the money brought into court justifies an order which deprives the applicant of any of its costs of the proceeding. Order.23 and 0.62 r.27 and the practice as to costs which is founded upon those and similar rules of court give rigorous effect to the policy that the parties to civillitigation should be induced to compromise. When a respondent fails in compliance with those rules in the serious way I have held that the respondent in this proceeding did, I do not consider that the applicant should be deprived of costs incurred after money is paid into court for failure to recover more than the amount paid into court if a substantial possibility that the applicant would recover more than that amount might reasonably have been perceived by his legal advisers. No rule or practice or presumption fetters the exercise of the discretion as to costs in such a case as I conceive this to be, so far as I am aware, and in so far as the preceding sentence suggests that I am myself propounding some such a fetter, I disavow that intention. In all the circumstances of this case I just do not find cause for any order but that the costs follow the event."

We agree, with respect, with his Honour's formulation of the position and can see no grounds for interfering with his exercise of his discretion. We would only wish to add one or two comments.

Since, as his Honour explained in section 39 of his judgment (pp.526-7) payments into court pursuant to 0.23 can only relate to claims for relief in the form of the recovery of debt or damages, it is unsafe to try to encompass any further protection of the party paying in by relying on Form 31 with or without amendments to its prescribed form. If anything more is sought to be achieved, such as release from applications for injunctive relief or from other parallel proceedings, the better course would be to make the offer in a "without prejudice" letter, spelling out just what is intended, and indicating that the letter may be used in any later debate as to costs.

Finally, it is hardly necessary to point out that, in the view which we take about the applicant's entitlement to interest as part of its damages, the applicant's final award, together with the amount involved in Centrepoint's undertaking not to pursue other relief, will almost certainly exceed the amount paid into court and any questions relating to that payment will become academic.

The orders of the court we propose are that:

1. The appeal of the applicant be allowed with costs.

2. The order that the applicant recover against the respondent the sum of $51,431.16 be set aside.

3. All questions as to the entitlement of the applicant to damages in the nature of interest be referred to the learned trial judge to be determined by his Honour in the light of our reasons for judgment.

4. Otherwise the orders of the court be affirmed. (We note that the undertaking recited in his Honour's order incorrectly identifies the relevant years in which certain events occurred. "1978" and "1979" should be understood in each case as 1979 and 1980 respectively).

5. The appeal of the respondent be dismissed with costs.

6. Liberty to apply to the court as presently constituted be reserved to any party.

JUDGE2

In my opinion the appeal by Centrepoint Freeholds Pty. Limited ("Centrepoint") and the appeal by T.N. Lucas Pty. Limited ("Lucas") should be dismissed and the judgment appealed from affirmed.
Appeal by Centrepoint

So far as the appeal by Centrepoint is concerned, I agree with the other members of the Court in thinking that Centrepoint has not demonstrated any sufficient reason to disturb the conclusion reached by the learned primary judge that Lucas had not affirmed the agreement for lease before it was dispossessed by Centrepoint on 25 January 1980.

I also agree that no sufficient ground has been demonstrated why this Court should disturb the order of the learned primary judge that Centrepoint pay Lucas' costs of the proceeding.

On those aspects of the matter I do not wish to add anything to what has been said by the other members of the Court.
Appeal by Lucas

In support of the appeal by Lucas it was submitted that the learned primary judge was in error in failing to increase the monetary sum awarded as damages by an amount representing interest calculated, in respect of each item of loss, over an appropriate period and at an appropriate annual rate, so as to compensate the company for being deprived of the use of those moneys by reason of the delay between the date of the loss and the date of judgment in the proceeding. This submission bore a double aspect. First, it was said that such interest was a proper head of damage to be awarded under sections 82 and 87 of the Trade Practices Act 1974. Secondly, reliance was placed on section 79 of the Judiciary Act 1903 which, it was argued, made binding on the Court in a proceeding under those sections of the Trade Practices Act 1974 the provisions of section 79A of the Supreme Court Act 1958 of the State of Victoria.

In relation to the first aspect, it was submitted that, unless such an allowance were made, the judgment for damages in respect of Centrepoint's contraventions of sub-section 52(1) of the Trade Practices Act 1974 would not afford the compensation which sections 82 and 87 of that Act require. Section 82 provides that a person may recover the amount of the loss or damage suffered by conduct of another person done in contravention of a provision of Part IV or V of the Act while section 87 empowers the Court to make such orders as it considers appropriate to compensate the person concerned in whole or in part for the loss or damage suffered.

I agree with the learned primary judge that the language of those provisions is not apt to require or authorise an award of damages by way of interest to recoup a loss due entirely to delay in the payment of the money ultimately held to be due. Such loss is not, in my view, properly described as loss suffered by reason of conduct in contravention of a provision of Part IV or V of the Act.

The power of the Court to include interest in the sum for which judgment is given in a proceeding for the recovery of money (including a debt or damages or the value of any goods) - indeed its obligation to do so unless good cause is shown to the contrary - is now the subject of legislative provision being section 51A of the Federal Court of Australia Act 1976. That provision, however, applies only to a cause of action arising after the commencement of the section, viz. 22 November 1984, and consequently has no application to the present proceedings. Hence the necessity for Lucas to rely on the provisions referred to of the Judiciary Act 1903 and the Supreme Court Act 1958 of the State of Victoria.

Section 79 of the Judiciary Act 1903 provides that the laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.

Section 79A of the Supreme Court Act 1958, at the date upon which the order for the recovery of damages was made, was in the following terms -

"79A.-(1) The Judge upon application shall in all actions for the recovery of debt or damages give damages in the nature of interest at such rate not exceeding the rate for the time being fixed under section 2 of the Penalty 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.

(2) Nothing in this section shall -

(a) authorize the granting of interest upon interest;

(b) apply in relation to any sum upon which interest is recoverable as of right by virtue of any agreement or otherwise;

(c) affect the damages recoverable for the dishonour of a negotiable instrument;

(d) authorize the allowance of any interest otherwise than by consent upon any sum for which judgment is pronounced or entered by consent;

(e) apply in relation to any sum on which interest might be awarded by virtue of section seventy-eight or section seventy-nine of this Act; or

(f) limit the operation of any enactment or rule of law which apart from this section provides for the award of interest.

(3) Where the damages awarded by the court or jury include or where the Judge in his absolute discretion determines that the damages so awarded include any amount for -

(a) compensation in respect of liabilities incurred which do not carry interest as against the person claiming interest;

(b) compensation for loss or damage to be incurred or suffered after the date of the award; or

(c) exemplary or punitive damages -

the Judge shall not allow interest in respect of any amount so awarded or in respect of so much of the award as in his opinion represents any such damages.

(4) The Judge may if he thinks fit request a jury to specify in its verdict any amount included in the verdict in respect of the matters referred to in sub-section (3) of this section."

"Judge" is not defined in the statute but in its context it clearly refers to a judge of the Supreme Court of Victoria.

It appears from the reasons for judgment of the learned primary judge that no statutory authority was relied upon by counsel to support an allowance of interest on damages in respect of the common law cause of action in deceit: the claim was made only in respect of the cause of action under sections 82 and 87 of the Trade Practices Act 1974. Notwithstanding this and the fact that neither the notice of appeal nor the written outline of submissions handed to the Court by counsel for Lucas asserts that an allowance for interest should have been made in respect of the common law cause of action, it is appropriate that the application of section 79A of the Supreme Court Act 1958 be considered in relation to that cause of action as well as in relation to that arising under the Trade Practices Act 1974.

Section 79A of the Supreme Court Act 1958 does not enact a statutory cause of action enforceable in any court possessing the appropriate jurisdiction. It does not create a right to interest but confers a discretion upon the judge of the Supreme Court, albeit a discretion which must be exercised in favour of a successful plaintiff in the absence of good cause being shown to the contrary. The judge must exercise a judicial discretion both in determining the rate of interest and in calculating the amount to be allowed in addition to the debt or damages awarded by the court or jury. The power which the section confers is one exerciseable only in proceedings of the kind to which the section refers: the benefit which it confers cannot be the subject of separate proceedings. The section postulates that the plaintiff has established in the Supreme Court a cause of action sounding in debt or damages and that the monetary amount recoverable under that cause of action has been ascertained. The provision is, in form and in substance, a command directed to the judge as to how he is to act in ascertaining the amount to be added to the monetary sum awarded in respect of the cause of action in order to arrive at the sum for which judgement is to be entered. The nature of the provision, which is within Part VII of the statute, does not, in my opinion, take on a different character by reason of the provisions of section 60 of the Act. That section provides:

"60. The several rules of law enacted by Part VII of this Act shall unless express provision is otherwise made be in force and receive effect in all Courts whatsoever so far as the matters to which such rules relate shall be respectively cognisable by such Courts."

The effect of that provision is simply to direct a similar command to a judge of any other court of the State of Victoria determining an action of the kind mentioned in section 79A.

It may be accepted as the received opinion that, subject to a qualification to be mentioned, section 79 of the Judiciary Act 1903 does not enable a court exercising federal jurisdiction to give an altered meaning to a State statute which it is required to apply. The qualification to the general principle is that a State law may in some circumstances be rendered applicable by section 79 to a court exercising federal jurisdiction which is not a State court notwithstanding that the law according to its own terms is limited in its application to the courts of the State: see Maguire v. Simpson (1977) 130 C.L.R. 362 at p.376 per Gibbs J. (as the Chief Justice then was). That qualification derives from what was said by the High Court in John Robertson & Co. Ltd. v. Ferguson Transformers Pty. Ltd. (1973) 129 C.L.R. 65. It is sufficient to refer to the following statement in the reasons for judgment of Mason J. at p.95:

"The broad purpose of s.79 is to ensure that the laws of the States are applied by courts in the exercise of federal jurisdiction. In general that purpose is achieved by the application of a State law according to its terms. Indeed, s.79 contains no express provision which would enable a court exercising federal jurisdiction to alter the language of a State statute and apply it in that altered form. However, the presence of the words 'including the laws relating to procedure evidence and the competency of witnesses' exhibits a clear intention that State laws relating to those topics should apply to federal jurisdiction. This purpose would fail partly in its objective if State laws on these topics are to be given a literal application under s.79 by courts other than State courts. State laws dealing with matters of procedure, as the earlier consideration of s .37 of the Limitation of Actions Act has shown, are often expressed so as to apply to State courts only, and in some instances they refer to particular State courts.

To ensure that State laws dealing with the particular topics mentioned in the section are applied in the exercise of federal jurisdiction by courts other than State courts, it is necessary that State laws be applied according to the hypothesis that federal courts do not necessarily lie outside their field of application. Section 79 requires the assumption to be made that federal courts lie within the field of application of State laws on the topics to which it refers, at least in those cases in which the State laws are expressed to apply to courts generally. This departure from the general principle that the section requires a State law to be applied according to its terms is justified, indeed demanded, by the clear requirement that State laws on the topics mentioned are to be applied in federal jurisdiction. Whether that requirement supports the broader view that a similar approach is to be taken in applying s.79 to substantive as well as procedural laws it is not now necessary to determine."

Section 79A of the Supreme Court Act 1958 is not, in my view, adequately described as a law "relating to procedure" within the meaning of that expression in section 79 of the Judiciary Act 1903. It partakes of the character of a substantive provision which will, in the cases to which it applies, operate to increase the amount awarded by way of damages to a successful plaintiff. Thus, the consideration which Mason J. regarded as decisive in the passage cited, namely the express inclusion in section 79 of a reference to the laws relating to procedure evidence and the competency of witnesses will not, of itself, provide a sufficient basis for holding that section 79 operates to make applicable in this Court section 79A of the Supreme Court Act 1958.

In my opinion, to conclude that section 79A was, by virtue of section 79 of the Judiciary Act 1903, made binding on the learned primary judge when determining the amount for which judgement 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 giving it a different meaning from that which it bears as an enactment of the State of Victoria. It would involve converting it into a provision requiring a judge of this Court to carry out the function which by its terms it confers on a judge of the Supreme Court of Victoria when hearing and determining an action of the kind to which it refers. This, in my view, it is not permissible to do.

Support for the view that section 79 of the Judiciary Act 1903 does not have the operation for which Lucas contends is also to be found in the opinion expressed by Mason J. in Australian National Airlines Commission v. The Commonwealth (1975) 49 A.L.J.R. 338 and in the decision of Lockhart J. in Hubbards Pty. Ltd. v. Simpson Ltd. (1982) 41 A. L. R. 509 at pp.525-6. Mason J., speaking of section 94 of the Supreme Court Act, 1970 (N. S. W.) said at p.525:

"No matter how widely it may travel in some respects s. 79 does not, in my view, pick up and apply in this court a provision which empowers a particular court of a State to make orders and enter judgements in proceedings in that court."

Mason J. referred to the Supreme Court Act, 1970 (N.S.W.) as "a statute desingned to define and regulate the powers and procedures of the Supreme Court". It may, therefore, be supposed that his Honour regarded section 94 of that Act (a section which is somewhat different in its terms from section 79A of the Victorian statute here in question) as a law relating to procedure within the meaning of that expression in section 79 of the Judiciary Act 1903. Notwithstanding that, Mason J. did not regard s.94 of the New South Wales Act as fulfilling the requirements necessary to fall within the qualification which he had enunciated in John Robertson & Co. Ltd. v. Ferguson Transformers Pty. Ltd. (supra) and to which reference has already been made. A fortiori, a provision such as section 79A of the Victorian statute which, as I have said, partakes of the character of a substantive provision is not to be regarded as falling within that qualification.

His Honour also discerned in the provisions of the Judiciary Act 1903 and the High Court Procedure Act 1903 an expression of the legislature's intention that, in relation to proceedings in the High Court, the only entitlement to interest on damages was to be the provision contained in section 26A of the High Court Procedure Act 1903 that judgments of the Court should carry interest. There being, therefore, other provision in the laws of the Commonwealth, section 79 of the Judiciary Act 1903 did not operate to make section 94 of the Supreme Court Act, 1970 (N.S.W.) binding on the High Court. Lockhart J. in Hubbards Pty. Ltd. v. Simpson Ltd. (supra) took a similar view in relation to the powers of this Court.

It is also to be noted that the reasoning of Walsh J. and of Gibbs J. (as he then was) in John Robertson & Co. Ltd. v. Ferguson Transformers Pty. Ltd. (supra) also leads to the conclusion that section 79 of the Judiciary Act 1903 cannot operate to make applicable the provisions of section 79A of the Supreme Court Act 1958 to a proceeding in this Court for damages for breach of section 52 of the Trade Practices Act 1974, that being a proceeding which could not be commenced in any Victorian court.

Counsel for Lucas also relied on section 32 of the Federal Court of Australia Act 1976, contending that the claim for pre-judgment interest on the damages awarded was a matter not otherwise within the Court's judisdiction which was "associated with" the matters in which the jurisdiction of the Court had been invoked. In my opinion this argument has no foundation and must be rejected as untenable.

For the above reasons I am of opinion that the learned primary judge was correct in declining to entertain the application by Lucas for an award of interest upon the assessed damages.

In relation to the other grounds of appeal argued before us on behalf of Lucas, I agree with the other members of the Court that the findings of the learned primary judge were clearly open to him on the evidence and no sufficient ground has been demonstrated upon which this Court should interfere with them.

The appeal by Centrepoint and the appeal by Lucas should be dismissed and the judgment appealed from affirmed.