Deputy Commissioner of Taxation v Clark (No 2)

[2006] SADC 107

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil)

DEPUTY COMMISSIONER OF TAXATION v CLARK (No 2)

[2006] SADC 107

Judgment of His Honour Judge Anderson

13 September 2006

INTEREST

Lump sum fixed - usual order for costs

District Court Act 1991 s39, referred to.

DEPUTY COMMISSIONER OF TAXATION v CLARK (No 2)
[2006] SADC 107

1. On 29 August 2006, I ordered that the Plaintiff have judgment against the Defendant in the sum of $70,533.80.  At the request of counsel, I reserved the question of costs and interest.

2. These matters came on for submissions on 5 September 2006.  Mr Sallis of counsel appeared for the Plaintiff and Mr Burtt for the Defendant.

   Costs

3. Upon Mr Sallis indicating that the Plaintiff did not seek other than the usual order as to costs, Mr Burtt agreed that he was unable to oppose an order in those terms.

4. Accordingly, the Plaintiff is to have her costs of action, to be agreed or taxed, on the party/party scale.

   Interest

5. The Plaintiff’s right to interest is contained within s39 of the District Court Act 1991. That section is in these terms:

   (1)Unless good reason is shown to the contrary, the Court will, on the application of a party in whose favour a monetary judgment has been, or is to be, given include in the judgment an award of interest in accordance with this section.

   (2)The interest-

   (a)will be calculated at a rate fixed by the Court; and

   (b)     will be calculated in respect of a period fixed by the Court (which must, however, in the case of a judgment given on a liquidated claim, be the period running from when the liability to pay the amount of the claim fell due to the date of judgment unless the Court otherwise determines); and

   (c)     is, in accordance with the Court’s determination, payable in respect of the whole or part of the amount for which judgment is given.

   (3)The Court may, without proceeding to calculate interest under subsection (2), award a lump sum instead of interest.

6. It is not in dispute that the Plaintiff’s application for costs relates to a liquidated claim and that the apposite words are those in parenthesis in ss(2).  The discretion which is there enlivened by the words “unless the Court otherwise determines” are to be understood in the context of the opening words of ss(1), namely, “unless good reason is shown to the contrary”.

7. Mr Burtt accepted that the effect of those words was to cast upon the Defendant the onus of showing why the Plaintiff’s application for interest for each of the separate liabilities which make up the judgment sum should not attract interest at the appropriate rate from when such liability arose.

8. The essence of Mr Burtt’s submission to discharge this onus was that as the first of these liabilities arose in November 1997, the Plaintiff has, in fact, sat on her hands in that proceedings were not instituted until 16 August 2004.

9. It is submitted that, in those circumstances, it would not be appropriate to penalise the Defendant by an award of interest over the whole period when such a significant portion of it was marked by inactivity in relation to recovery.

10. In such a circumstance, by inference, Mr Burtt proposed that interest run only from the time of commencement of these proceedings.

11. In reply, Mr Sallis sought to tender the affidavit of Kimley Grant Barry, Taxation Officer, sworn on 5 September 2006.  That affidavit contains annexures which are said to give a true indication of the ongoing relationship between the Plaintiff and the Defendant and his advisors over that period and beyond.

12. Mr Burtt objected to the tender of the affidavit as it was new to him.  I accepted it, de bene esse, allowing him the opportunity to make further submissions when he was familiar with the contexts.

13. Thereafter, there was an adjournment at 9.59am, the matter having commenced at 9.30am, to allow Mr Burtt to attend to other commitments at Court.  The submissions continued at 10.30am.  At their conclusion, Mr Burtt indicated that he did not require any more time to make further submissions either generally, or by inference, as to the admissibility of the affidavit.

14. The affidavit will be admitted into evidence for the purpose of this application.

15. The narrative exhibited to the tendered affidavit shows a long history of negotiations between the Plaintiff and the Defendant and his advisors over many years concerning many liabilities.

16. Until a letter of 13 January 2003, however, these negotiations were concerned almost exclusively with liabilities which arose before November 1997.  Only from that date was there set in train a course which ultimately led to the commencement of these proceedings.

17. After this correspondence, a Bankruptcy Notice issued for a pre‑existing judgment sum.  Negotiations concerning its resolution also envisaged “a commercial settlement” of all of the Defendant’s liabilities.  Whilst those negotiations continued, it was appropriate to not institute these proceedings.  At the end of the day, no such “commercial settlement” was achieved and these proceedings issued.

18. In my view, interest should run from mid‑January 2003.  On that date the whole of the judgment sum was due.  There is good reason to not allow interest earlier than this date, as until then the Plaintiff was almost totally occupied in her dealings with the Defendant by the earlier personal and other liabilities.  No real attention seems to have been given to the recovery of these discrete sums until January 2003.  In that circumstance, it is not appropriate that interest run against the Defendant prior to that date.

19. Interest should broadly be in accord with the Third Schedule. Pursuant to s39(3), I fix interest on the judgment debt in the sum of $15,500.00.

20. The Plaintiff should now seal the judgment in accordance with the reasons published on 29 August 2006 and these reasons.  The whole of the judgment should speak from 29 August 2006.  The orders for costs and interest should be part of the judgment speaking from 13 September 2006.

21. I order that the time within which to lodge any appeal be enlarged so as to run from 13 September 2006.