Cp (Adelaide) & Ors v Hartford (Holdings) & Anor (No 12) No. DCCIV-01-617

[2003] SADC 29

CP (ADELAIDE) PTY LTD & ORS
v
HARTFORD (HOLDINGS) PTY LTD & ANOR (NO 12)
[2003] SADC 29

Judge Lunn
Civil

REASONS ON PLAINTIFFS’ FURTHER APPLICATION TO VARY THE JUDGMENT FOR THE 1^ST PLAINTIFF AND ON THE COSTS OF THE APPLICATIONS TO VARY.

Further application to vary the judgment amount for 1^st plaintiff

1. On 31 January 2003 I delivered my reasons No 11 ([2003] SADC 8) exercising the discretion under Rule 84.12 to increase the declaratory judgment for the 1^st plaintiff against the 1^st defendant Hartford to $457,740 including pre-judgment interest up until 28 June 2002 being the date of the entry of judgment.  I also increased the judgment for the other four plaintiffs but that is not relevant on the present application.  The 1^st plaintiff by a letter of 4 February 2003 has sought a further increase in the judgment amount.

2. Paragraph 2 of the plaintiffs’ application of 21 October 2002 sought an increase under Rule 84.12 of the judgment for the 1^st plaintiff against the 1^st defendant from $228,870 to $457,740, ie that it be doubled.  By a letter of 29 October 2002 the plaintiffs’ solicitors gave notice that they intended to amend the application, inter alia, to increase the amount sought in paragraph 2 to $531,247 plus pre-judgment interest.  At the hearing on 27 November I granted the amendment sought and indicated that the application would be deemed to be amended in accordance with the terms of the letter of 29 October 2002.  The point was apparently not mentioned again in the lengthy submissions.  Unfortunately, in preparing my reasons No 11 I overlooked the letter of 29 October and treated the plaintiffs’ application as being that set out in paragraph 2 of the application of 21 October 2002.

3. On the further hearing counsel for the 1^st defendant did not dispute that the correct calculation of the total loss of the 1^st plaintiff for the purposes of the interim assessment was $531,246.  It was not appropriate to merely double the previous award as this did not give proper effect to the deduction of the counterclaim of $112,691.

4. Ultimately the only dispute was about the basis upon which pre-judgment interest should be calculated under s39 of the District Court Act on the new amount of damages of $531,247. I no longer have the calculations by which I arrived at the amount of interest which I fixed on the judgment for the 1^st plaintiff on 28 June 2002 and most of the District Court file has been sent to the Supreme Court because of pending appeals.  However, an ex post facto calculation shows that it was 6.74% of the damages allowed.  The 1^st plaintiff submitted that it should have been allowed interest on the full amount of its damages from at least 6 March 2001 until 28 June 2002 at a rate of between 6% and 7% which amounted to substantially more than 6.74% of the total damages.  I do not agree.  The whole of the damages did not attract interest from 6 March 2001.  Some of the trading losses were incurred after 6 March 2001.  Some of the unsecured creditors of the 1^st plaintiff had not been paid.  I do not consider that I have been clearly shown to have been in error in the manner in which I calculated the pre-judgment interest on 28 June 2002.  The rate I used was 6% per annum.  For the purpose of the exercise of my present discretion under Rule 84.12 I am only prepared to revise the amount for the pre-judgment interest to accord with the new amount for the total judgment and not to adopt any different method of assessment of that interest.  If my method of assessment of a lump sum in lieu of interest was incorrect, it is a matter which will need to be pursued on appeal.  The pre-judgment interest for the 1^st plaintiff in the interim award up to 28 June 2002 is altered to $35,806.  I vary my order of 31 January 2003 in paragraph 1 to substitute $567,046 in lieu of $457,740.

   Costs order

5. At the first hearing of the application on 5 November 2002 counsel for the 1^st plaintiff indicated that the variations were opposed.  The plaintiffs succeeded in having the amounts of the judgments varied but failed on their two contentions to vary the costs orders.  While the plaintiffs are entitled to the major part of their costs of the application I intend to make a broad axe reduction to reflect that the defendants were partly successful on the discrete issues as to the costs orders.  The 1^st defendant is to pay to the plaintiffs 75% of their costs as agreed or taxed of the application of 21 October 2002 and the orders made thereon and there is to be no order as to the other 25% of those costs.  Counsel for the 1^st defendant submitted that the costs recoverable by the plaintiffs should be reduced because of the prolixity of the submissions of Mr Sallis.  I will leave that issue for the taxing officer as it is bound up with the basis on which costs are to be allowed to Mr Sallis.

6. The plaintiffs served the application of 21 October 2002 on the 2^nd defendant.  Paragraph 7 of that application sought an order, “The judgment entered on September 2002 (sic) in respect of the costs of the Action be varied”.  That paragraph was wide enough to encompass a variation of the costs orders made in favour of the 2^nd defendant.  At the hearing on 5 November 2002 some uncertainty was expressed about whether any variation of the costs orders in favour of the 2^nd defendant were in issue on the application.  On 19 November 2002 the plaintiffs’ solicitors wrote to the solicitors for the 2^nd defendant confirming that the application did not affect the 2^nd defendant’s entitlement to costs.  I do not consider that the 2^nd defendant should be entitled to costs incurred after the receipt of that letter.  I do not accept that it had a sufficient interest in the application thereafter because it might be contingently interested in variations of other orders if the appeals against my earlier orders succeeded.  Those are matters properly to be pursued by the 2^nd defendant on the appeals.

1. My further orders on the application of 21 October 2002 are as follows:

   1.That paragraph 1 of my order of 31 January 2003 be further varied by substituting in the declaratory judgment for the 1^st plaintiff against Hartford an interim assessment for $567,046 in lieu of $457,740.

   2.That the 1^st defendant pay to the plaintiffs 75% of their costs as agreed or taxed of the application and the orders made thereon and there be no order as to the other 25%.

   3.That the plaintiffs pay to the 2^nd defendant its costs of the application incurred up to and including 20 November 2002, but not thereafter.

   4.That paragraphs 6 and 11, mutatis mutandis, of my order of 3 September 2002 are to apply to the costs payable under this order.

   5.Certified fit for counsel.