Esanda Finance Corporation Limited v Atanasovska (No 2)

[2014] NSWDC 289

District Court

New South Wales

Medium Neutral Citation:	Esanda Finance Corporation Limited v Atanasovska (No 2) [2014] NSWDC 289
Hearing dates:	On the papers
Decision date:	02 June 2014
Jurisdiction:	Civil
Before:	P Taylor SC DCJ
Decision:	(1) Judgment for the plaintiff against the defendant in the sum of $196,079.37. (2) The defendant to pay the plaintiff’s costs of the proceedings on an ordinary basis, up to and including 9 April 2013, and on an indemnity basis, from 10 April 2013. (3) The cross-claim be dismissed. (4) Grant a stay of the judgment for 28 days or until an application filed by the plaintiff in respect of the stay is heard, whichever occurs first. (5) Leave to the plaintiff to make any application on 2 days’ notice to the defendant in respect of that stay.
Catchwords:	INTEREST AND COSTS – rate of interest – offer of compromise
Legislation Cited:	Uniform Civil Procedure Rules 2005, r 20.26, r 36.16, r 42.1, r 42.14
Category:	Costs
Parties:	Esanda Finance Corporation Limited (plaintiff/second cross-defendant) Liljana Atanasovska (defendant/cross-claimant) Ragaie Awad (first cross-defendant)
Representation:	Counsel: Mr A Kaufmann (plaintiff/second cross-defendant) Solicitors: Gadens Lawyers (plaintiff/second cross-defendant) Simon Diab & Associates (defendant/cross-claimant)
File Number(s):	2011/366514

Judgment

1. On 9 May 2014 I found in favour of the plaintiff, Esanda Finance Corporation Limited (“Esanda”), and directed the parties to provide submissions on interest and costs in the event that agreement could not be reached on these two issues. The defendant, Liljana Atanasovska, provided submissions on 16 May 2014 and the plaintiff on 20 May 2014.

INTEREST

2. The plaintiff claims interest in accordance with paragraph 2 of the Relief Claimed in the statement of claim and sets out a calculation for interest (up to 9 May 2014) in a letter dated 12 May 2014, which was annexed to its submissions.

3. The defendant’s submissions do not appear to challenge the amount of interest claimed by Esanda nor Esanda’s entitlement, except for paragraphs 19 and 22. In paragraph 19 of her submissions, Ms Atanasovska asserts that “the appearance of the letter as something different” from “termination by notice in writing…should be sufficient to deprive the Plaintiff of any interests [sic] and costs”.

4. Why the different “appearance” of the letter should impact upon interest and costs is left unexplained. Interest is payable under the agreements on amounts due but unpaid. Thus termination, still less “appearance of termination”, is not a prerequisite to interest or costs.

5. In paragraph 22 Ms Atanasovska states, “the whole contracts are so palpably a consumer rip-off that the Court should not sanction the rorting by an award of interest”. Ms Atanasovska does not set out any basis for this assertion, or any reason why this assertion should disentitle Esanda to an award of interest to compensate it for the delay in payment, which is the basis for an award of interest.

6. Accordingly, I accept that interest is payable on the principal amount owing.

7. Esanda has claimed interest in accordance with cl 5(c) of the Agreements at a rate of 9.85%. Clause 5(c) obliged Ms Atanasovska “to pay interest at the Relevant Rate on the daily balance of all moneys from time to time due but not yet paid”.

8. The Relevant Rate is defined in cl 16(b) as follows:

“‘The Relevant Rate’ means the rate certified by Esanda as the pre-tax rate of return Esanda would receive in respect of the transaction if all payments are paid on time.”

9. The submissions by Esanda do not refer to any certification of the pre-tax rate of return, or certification in respect of interest. Rather, the interest is asserted to be that “claimed in the statement of claim”.

10. In my view, Esanda is not entitled to a special rate of interest unless it establishes the contractual requirements to claim that rate. The contract requires certification of the pre-tax rate of return, which is not found in the evidence, at least so far as the submissions reveal.

11. Accordingly, I propose to award the interest at the prescribed rates for pre-judgment interest. This reduces the claim for interest from $39,863.84 to $31,153.96.

12. As the principal sum is $164,925.41, the judgment sum comprising principal and interest is thus $196,079.37, which is the amount I propose to award.

COSTS

13. Esanda has been successful on its claim. The general rule is that costs follow the event: Part 42 r 1 of the Uniform Civil Procedure Rules 2005. Ms Atanasovska has not identified any proper basis for an order contrary to the general rule that costs should follow the event in respect of the proceedings.

OFFER OF COMPROMISE

14. Esanda relies on an Offer of Compromise dated 9 April 2013, which was not accepted. The Offer of Compromise provided as follows:

“The plaintiff offers to compromise its claims in these proceedings and to settle these proceedings in accordance with rule 20.26 of the Uniform Civil Procedure Rules 2005 on the following basis:

1 The defendant to pay the plaintiff the sum of $140,000.00.

2 Following payment of the sum of $140,000.00 the proceedings will be dismissed.

3 This offer is exclusive of costs.

4 This offer is made in accordance with rule 20.26 of the Uniform Civil Procedure Rules 2005.

5 This offer is open for acceptance until 9 May 2013.”

15. The Offer of Compromise complies with Pt 20 r 26 of the Uniform Civil Procedure Rules 2005.

16. As the Offer of Compromise was not accepted, and the judgment is no less favourable to Esanda, Esanda is entitled to an order against Ms Atanasovska for Esanda’s costs assessed on the ordinary basis up to 9 April 2013, and assessed on an indemnity basis from 10 April 2013 (the day following the day on which the offer was made): Pt 42 r 14 of the Uniform Civil Procedure Rules 2005.

17. Accordingly, I propose to order that the defendant pay the plaintiff’s costs on an ordinary basis, up to and including 9 April 2013, and on an indemnity basis, from 10 April 2013.

FURTHER MATTERS RAISED BY THE DEFENDANT

18. The defendant’s submissions do not deal in any depth with interest and costs. Rather, they assert a need for an absence of termination, and raise the entitlement of Esanda to possession, the value of that entitlement, the absence of a breach of the agreement, and the unfairness of the agreements.

19. Whatever be the validity of these arguments, they are not in accordance with the directions given in my judgment. Further, they raise issues that were not ventilated at trial. Accordingly, I do not think it is appropriate that I consider them in the context of determining the appropriate order that follows from my decision.

20. If the defendant has an entitlement under r 36.16 of the Uniform Civil Procedure Rules 2005 to seek to vary my decision, she may apply in accordance with that provision in the proper way. This should not be read as an invitation to the defendant to do so.

ORDERS

21. Accordingly, the orders of the Court are:

1. Judgment for the plaintiff against the defendant in the sum of $196,079.37.

2. The defendant to pay the plaintiff’s costs of the proceedings on an ordinary basis, up to and including 9 April 2013, and on an indemnity basis, from 10 April 2013.

3. The cross-claim be dismissed.

4. Grant a stay of the judgment for 28 days or until an application filed by the plaintiff in respect of the stay is heard, whichever occurs first.

1. Leave to the plaintiff to make any application on 2 days’ notice to the defendant in respect of that stay.

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Decision last updated: 05 March 2015