Euromark Limited v Smash Enterprises Pty Ltd (No 2)

In Euromark Limited v Smash Enterprises Pty Ltd (No 2), the Court was asked to determine the appropriate rate of interest on sums awarded to Euromark, a successful plaintiff, in a commercial dispute involving alleged breaches of contract and contraventions of the Competition and Consumer Law Act 2010 (Cth). The defendants argued for the application of the UK bank rate, while Euromark sought the application of the Penalty Interest Rates Act 1983 (Vic) rate (PIRA rate). The Court considered whether the PIRA rate should apply, taking into account Euromark's lack of business operations in Australia and its delay in providing security for costs.

The primary legal issue was whether the PIRA rate should be applied to the interest on judgment sums awarded to Euromark. Euromark argued that the PIRA rate should be the starting point, citing Australia Kunqian International Energy Co. Pty Ltd v Flash Lighting Company Ltd, where the Court of Appeal held that the PIRA rate exceeds market rates but should still be applied. Euromark also noted the purpose of awarding interest to compensate the judgment creditor for the loss of use of their money, deter delay, and encourage settlement. The defendants, on the other hand, submitted that the UK bank rate should apply due to Euromark's lack of business in Australia and delays in providing security for costs. They further argued for a six-month exclusion from the calculation of the relevant period of interest to account for Euromark's delays.

The Court held that the PIRA rate should apply to the interest on judgment sums awarded to Euromark. The Court acknowledged that Euromark had been deprived of the use of its money for an extended period, and there was no basis in the proceeding to apply a rate other than the PIRA rate. The Court noted that the purpose of an award of interest is to compensate the judgment creditor for the loss of use of their money. The Court rejected the defendants' argument for the application of the UK bank rate and the proposed exclusion period, finding that these factors did not override the application of the PIRA rate. The Court's decision was based on the principle that the PIRA rate provides a fair starting point for interest calculations in commercial disputes, regardless of the plaintiff's business location or delays in providing security for costs.

The Court also addressed the issue of costs, finding that the company was not liable for damages for contraventions of the Competition and Consumer Law Act 2010 (Cth), but both the company and individuals were liable for 60% of the costs of the proceeding after consolidation. The plaintiff was liable for 50% of the costs against the company prior to consolidation. The Court made offset costs orders between the plaintiff and the company. The Court ordered an interim stay of execution of the judgment pending an interlocutory application to the Court of Appeal for interlocutory orders, due to concerns about the plaintiff company's ability to repay. The Court further ordered that security for costs be released, except for other security for costs of enforcing Deeds of Indemnity.