Emanuele, G. v The Chamber of Commerce & Industry SA Incorporated
[1994] FCA 283
•13 MAY 1994
GUISEPPE EMANUELE, INDUSTRY HOUSE PTY LTD and PIRIE PARTNERS (REGISTERED) v.
THE CHAMBER OF COMMERCE AND INDUSTRY SA INCORPORATED
WOODS BAGOT PTY LTD, GLEN FRANK McMAHON AND BAGHAD (NO.4) PTY LTD (In
Liquidation)
No. SAG88 of 1988
FED No. 283/94
Number of pages - 3
Interest - Costs
COURT
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIAN DISTRICT REGISTRY
GENERAL DIVISION
O'LOUGHLIN J
CATCHWORDS
Interest - Time in respect of which same should be paid - appropriate rate thereof.
Costs - Two unsuccessful applicants and one successful applicant - what award of costs should be made in such circumstances.
Federal Court of Australia Act (1976) s51A
Rules of Court 035 r8
HEARING
ADELAIDE: Written submissions were received consequential upon the publication of reasons for judgment on 24 February 1994.
#DATE 13:5:1994
Counsel for the Applicant: Mr J M Wilkinson
Solicitors for the Applicant: Messrs Phillips Fox
Counsel for the respondent: Mr D J Bleby QC and Mr I Robertson
Solicitors for the Respondent
and Cross-claimant : Messrs Piper Alderman
Counsel for the Cross-respondent
Woods Bagot Pty Ltd : Mr M J W Birchall
Solicitors for the Cross-respondent
Woods Bagot Pty Ltd : Messrs Thompson Simmons and Co
No appearance for the Cross-respondents Glen Frank McMahon and Baghag (No 4) Pty Ltd
ORDER
The Court orders that:
1. The claims of the applicants Guiseppe Emanuele and Pirie Partners be dismissed.
2. Judgment be pronounced and entered in the sum of $1,010,491 in favour of the applicant Industry House Pty Ltd, which sum is
inclusive of interest.
3. The costs of the applicant Industry House Pty Ltd be taxed (in default of agreement) and that the respondent pay 85% thereof.
4. All cross-claims against all cross-respondents be dismissed.
5. The cross-claimant pay the costs of the cross-respondent Woods Bagot Pty Ltd which costs are to be taxed in default of
agreement.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
O'LOUGHLIN J On 24 February 1994 I published my reasons for judgment in this matter but did not pronounce judgment pending further submissions on questions of interest and costs. In my reasons I dismissed the claims of Mr Emanuele and Pirie Partners but found in favour of Industry House Pty Ltd against the respondent, The Chamber of Commerce and Industry SA Incorporated ("the Chamber"), in the sum of $770,387. I dismissed the cross-claim of the Chamber against Woods Bagot Pty Ltd with costs. The remaining cross-claims have also been disposed of.
There are therefore two outstanding questions that remain for determination:- what interest, if any, should be added to the award of $770,387 in favour of Industry House and what costs order or orders should be made in light of the published reasons?
Interest
3. The award of $770,387 was the dollar value in 1992 terms of the loss or damage that was suffered by Industry House in 1985. Industry House, quite rightly, has therefore limited the ambit of its claim for interest, submitting that it should be calculated as from 1 June 1992. I do not accept the Chamber's primary submission that interest should only be addressed on those discrete amounts of expenses which Industry House (as distinct from Pirie Partners) has paid; it is the loss of Industry House with which I am concerned and not the amounts of payments that it may have made from time to time.
The power in the Court to award interest is found in s51A of the Federal Court of Australia Act (1976) (Cth). So far as it is material, that section provides that in a claim for damages the court or a judge shall "unless good cause is shown to the contrary" include a calculated sum or a lump sum for interest in the sum for which judgment is given. The power is wholly discretionary in that the award of interest is to be "at such rate" as the court or the judge thinks fit and it may be on the whole or any part of the money and for the whole or any part of the period between the date when the cause of action arose and the date as of which judgment is entered. One starts therefore with a presumption that an award of damages carries with it an award of interest.
Section 51A does not specify a rate of interest: nor do the Rules of Court. Order 35 r8 provides that a judgment debt will carry interest at a specified rate unless the court determines, in a particular case "that justice requires that a lower rate should be applicable". As from 1 January 1994 that rate is 10%; prior to that it had been 12%.
The Chamber in its submissions referred to the rates specified under O35 r8 suggesting that, if the court saw fit to award interest in the present case, a rate of 11% would be acceptable. Industry House accepted that rate.
However, the Chamber claimed that Industry House should be denied some or all of its interest entitlement because of its numerous delays in prosecuting this litigation. I have had cause to be critical of all applicants on this subject but one must be careful not to over-react. After all, the finding of the court is that in 1985 the Chamber was guilty of misleading or deceptive conduct and it has since benefited from the applicant's delays by having the ongoing use of the damages award that it must now pay.
In my opinion, the facts of this case are such that there is justification for an award of interest without penalising Industry House for delay. I have assessed interest for an arbitrary period of 2 years and ten months at 11% or $240,104. The applicant is therefore entitled to judgment in the sum of $770,387 plus $240,104 or $1,010,491.
Costs
9. I turn next to the question of costs.
The Chamber submitted that it should enjoy an order for costs against the unsuccessful applicants, Mr Emanuele and Pirie Partners. It also submitted that the pre-trial conduct of the applicants should be noted with disapproval by the court reducing the costs that would otherwise be awarded to Industry House. The Chamber referred to lateness of discovery and failure to supply information within sufficient time to enable the Chamber to assess whether agreement could be reached on an issue as examples of delays and tardiness that exacerbated costs.
Industry House did not seek to avoid any of these complaints. Rather it accepted them. As to the dismissal of the claims of Mr Emanuele and Pirie Partners, it submitted that they were advanced in unison with the claim of Industry House and that most of the evidence in the trial would have been led even if Industry House had been the only applicant. Industry House submitted that all these complaints could and should be reflected by a percentage reduction of the costs that it would otherwise enjoy. I agree with this approach. It has the benefit of reducing what might otherwise be a costly taxing exercise, yet it still allows for fairness and moderation. However, I think that the 5% reduction that was suggested by counsel for Industry House is inadequate. In my opinion a reduction of 15% would be appropriate to meet the circumstances of this case.
I order, therefore, that the applicant, Industry House, is to have 85% of its costs with respect to these proceedings which costs are to be taxed in default of agreement. In order to bring this matter to an end, this order for costs is intended to cover every outstanding cost issue between the applicants (or any one or more of them) on the one hand and the Chamber on the other. It is not, of course, intended to vary or amend any specific costs order that may have been made during the course of these proceedings.
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