F & J Investment Assets Pty Ltd v Etcell (Interest)

[2024] VCC 772

Issue 2

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMERCIAL DIVISION
BUILDING CASES LIST

Revised
Not Restricted
Suitable for Publication

Case No. CI-19-00242

F & J Investment Assets Pty Ltd (ACN 621 866 180) as trustee for The Mustafa Property Trust	First Plaintiff
and
Jetmir Mustafa	Second Plaintiff
and
Florije Mustafa	Third Plaintiff
v
Paul Etcell	Defendant

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	28 May 2024 (Written submissions)
DATE OF JUDGMENT:	31 May 2024
CASE MAY BE CITED AS:	F & J Investment Assets Pty Ltd v Etcell (Interest)
MEDIUM NEUTRAL CITATION:	[2024] VCC 772

REASONS FOR JUDGMENT
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Subject: INTEREST

Catchwords:                   Interest on judgment – Commencement date for the payment of interest

Legislation Cited:           Supreme Court Act 1986; Penalty Interest Rates Act 1983

Cases Cited: Nil

APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr R A Harris of counsel	MGA Lawyers
For the Defendant	No submissions filed

HIS HONOUR:

1Judgment was delivered in this matter on 7 May 2024 ([2024] VCC 594). The orders included the following:

7.By 28 May 2024 at 4.00 pm, the parties must file and serve written submissions limited to the following matters:

a.the calculation of the judgment sum, limited to any errors in the arithmetic;

b.the entitlement to and calculation of interest upon any sums awarded to the First Plaintiff;

c.the question of the costs of the proceeding;

d.whether the party wishes to make further oral submissions, and if so the reasons for requesting a further hearing.

2In accordance with the order, the Plaintiffs filed written submissions on 28 May 2024. The Defendant did not file submissions. An email was sent by my associate to the Defendant’s solicitors on 29 May 2024 at 2:57 pm requesting the Defendant to file submissions in accordance with the order made 7 May 2024.

3No response or submissions have been received from the Defendant’s solicitors. I therefore propose to determine the question of interest and a further issue relating to the judgment sum.

4The Plaintiffs submitted that an error had been made in the calculation of the judgment sum. The Plaintiffs submitted that, in the table at paragraph 1025 of the reasons for judgment, the allowances in the final column of the table should total $478,599.82, rather than $478,599.88. This discrepancy of 6 cents is carried forward into the calculation of the judgment sum in the table at paragraph 1100. In the latter table, there is a calculation error in the second column of 17 cents. As a consequence, instead of the judgment sum of $654,117.16, the Plaintiffs submit that this sum should be amended to $654,117.27, a difference of 11 cents.

5I am obliged to Plaintiffs’ counsel, Mr Harris, for highlighting these discrepancies. However, I do not propose to accede to the Plaintiffs’ request to amend the judgment sum as, before doing so, I would feel compelled to check not only the addition of the figures in the tables, but also the allowances for each defect item in the table to paragraph 1025 and the make-up of each allowance in Issue 4 of the reasons. I do not consider that this work is justified by a discrepancy of eleven cents.

6The Plaintiffs’ submissions deal principally with the issue of interest. The submissions also refer to the fact that the Plaintiffs have made offers of compromise in the proceeding. In those circumstances, as foreshadowed by the orders on 7 May, it is appropriate that the question of interest be determined before the parties file any submissions in relation to the costs of the action.

7In paragraph 1101 of the reasons for judgment, I expressed the view that interest may be payable on the sums that I assessed as, “Completion costs ($512,282.75), Rectification costs ($478,599.88) and Delay costs ($190,136.99) … from a date that might best be calculated as the mid-point between the two relevant dates I have chosen, 1 October 2018, as the starting date and 23 May 2019 as the completion date of the further works. That date on my calculation is 27 January 2019”.

8The basis for choosing these dates was set out in paragraphs 1087 to 1094 of the reasons for judgment.

9The plaintiffs rely upon s60(1) of the Supreme Court Act 1986, which provides as follows:

(1)The Court, on application in any proceeding for the recovery of debt or damages, must, unless good cause is shown to the contrary, give damages in the nature of interest at such rate not exceeding the rate for the time being fixed under section 2 of the Penalty Interest Rates Act 1983 as it thinks fit from the commencement of the proceeding to the date of the judgment over and above the debt or damages awarded.

10I consider that, in the circumstances of this case, it is appropriate that the First Plaintiff should be awarded interest on the elements of the judgment from 27 January 2019, rather than the date of the issue of the writ on 23 January 2019. In respect of the “Completion costs”, interest shall only accrue on the sum of $85,380.29, which sum takes account of the work performed by the Builder pursuant to the Building Contract.

11I accept that the Client commenced completion and rectification work soon after the Building Contract was determined and that the building works undertaken by the Client were not completed until about late May 2019. However, these building works included additional works for which the Builder was not responsible. An award of interest on the three categories of damages I have referred to, from 27 January 2019 rather than the date of the issue of the proceeding, would avoid interest being awarded on sums for which the Builder had no responsibility.

12The judgment sum of $654,117.16 shall carry interest at the penalty interest rate of 10% per annum from 27 January 2019 to 31 May 2024 (1951 days), in the further sum of $349,639.06, calculated as follows:

Item	Amount	Interest
Completion costs	$85,380.29	$45,637.52
Rectification costs	$478,599.88	$255,821.47
Delay costs	$90,136.99	$48,180.07
$654,117.16	$349,639.06

13I will deal with the issue of costs after the parties have filed any further submissions.

Orders

In the circumstances, the following orders are made by the Court:

1. Judgment for the First Plaintiff against the Defendant that the Defendant must pay to the First Plaintiff the sum of $654,117.16 together with interest pursuant to statute of $349,639.06 to 31 May 2024, total judgment sum $1,003,756.22. Stay execution on the judgment sum for 14 days.

2.By 3 June 2024 at 4:00 pm, the parties must file and serve any submissions on the issue of the costs of the proceeding.

3.Paragraphs 1 to 4 and 6 of the orders made by his Honour Judge Anderson on 7 May 2024 are affirmed.

4.Costs reserved.

Certificate

I certify that the preceding 5 pages are a true copy of the judgment of His Honour Judge Anderson delivered on 31 May 2024.

Dated: 31 May 2024

Tracey Huang

Associate to His Honour Judge Anderson