GEC Marconi Systems Pty Limited v BHP Information Technology Pty Limited [2003] FCA 688
INTEREST – s 51A of the Federal Court of Australia Act1976 (Cth) – rate of interest – the Court’s usual practice – the purposes of prejudgment interest awards – “ordinary commercial rates” – difference between investment and borrowing bases of compensation.
INTEREST – rates of interest – guidance from Practice Direction of ACT Supreme Court – opinion evidence adduced of how the parent company of the successful party would have used the judgment monies – not a Hungerfords claim – lower rates proposed than those in Practice Direction – Practice Direction followed.
COSTS – purported Calderbank offer – offer inclusive of interest and costs – practice of Court in relation to such offers.
COSTS – discounting costs of successful party – unsuccessful on a number of issues.
COSTS – third party claim – rendered of no consequence because of cross-claimant’s successful defence of application against it – whether third party entitled to its costs.
COSTS – third party claim – whether unsuccessful cross-claimant entitled to pass on its third party costs liability to the unsuccessful applicant – applicable principles in such third party cases.
COSTS – subpoena – Commonwealth policing agreement with party served – confidentiality and public interest immunity – whether costs incurred recoverable under s 43 of the Federal Court of Australia Act 1976 (Cth).
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 688
Case
[2003] FCA 688
Decision Date
CaseChat Overview and Summary
The case of GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd involved a dispute regarding the calculation of interest on monetary awards under statutory provisions in the Australian Capital Territory. The parties, GEC Marconi Systems Pty Ltd and BHP Information Technology Pty Ltd, were involved in litigation over a contractual dispute, and the issue at hand was the appropriate rate of interest to be applied to the monetary awards. The legal issues before the court included the interpretation of the statutory provision for pre-judgment interest, the applicability of the Practice Direction issued by the ACT Supreme Court, and the significance of the evidence presented by the parties regarding interest rates.
The court considered whether the Practice Direction, which suggested specific rates of interest to guide the court, had any binding effect or if it was merely advisory. The court also examined the policies underlying pre-judgment interest, which include compensation for the loss of use of money and the encouragement of early dispute resolution. The court noted that while the Practice Direction had no statutory force, it could be taken into account unless contradicted by evidence. In this case, the court found that there was no evidence to contradict the rates specified in the Practice Direction and thus applied those rates to the damages awarded.
In its reasoning, the court held that interest should be paid on the awards made in favour of BHP Information Technology at the rates specified in the 2001 Practice Direction of the Supreme Court of the Australian Capital Territory. The court further ordered that interest be payable to BHP Information Technology on its judgment against GEC Marconi for the periods agreed by the parties and on its judgment against the Commonwealth from 1 November 2001. The court also addressed the costs associated with the application and cross-claims, allocating them among the parties based on their respective responsibilities and the nature of the claims.
The court's final orders included the calculation of interest at the specified rates, the payment of costs among the parties, and specific allocations of costs relating to the various claims and cross-claims. These orders ensured that the parties were held accountable for the appropriate rates of interest and the associated costs of the litigation process.
Orders
Orders of the court
(1) Interest is payable on awards made in favour of BHP-IT at the rates specified in the 2001 Practice Direction of the Supreme Court of the Australian Capital Territory.
(2) Interest is payable to BHP-IT on its judgment against GEC Marconi for the periods agreed by the parties.
(3) Interest is payable to BHP-IT on its judgment against the Commonwealth from 1 November 2001.
(4) GEC Marconi pay BHP-IT’s costs of the application.
(5) GEC Marconi pay BHP-IT 80 per cent of BHP-IT’s costs of the first cross-claim.
(6) GEC Marconi Australia pay BHP-IT’s costs of the claim made against GEC Marconi Australia.
(7) BHP-IT pay the Commonwealth’s costs of the second cross-claim to the extent that those costs relate to matters other than (a) the “reflexive” claims as described in these reasons for judgment and (b) CR3053 as to which there will be no order as to costs.
(8) GEC Marconi pay the Commonwealth’s costs of the second cross-claim to the extent that those costs relate to the “reflexive” claims.
(9) GEC Marconi pay the Commonwealth’s costs on the Notices to Produce served on the Commonwealth on a party and party basis.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
The ACT has a statutory provision equivalent to s 51A of the Act: see s 69 of the Supreme Court Act1933 (ACT). In March 2001 a Practice Direction was issued by order of the Judges of the ACT Supreme Court for the purposes of s 69 of the ACT Act. It indicated, for present purposes:“When computing interest for the purposes of s 69 of the Australian Capital Territory Supreme Court Act 1933, subject to any evidence adduced, it may be taken that the following yearly rates of interest are appropriate to guide the Court: Period Per cent…(i) 1 July 1993 to 30 April 2001 10 (j) After 1 May 2001 9” Emphasis added.As I will note below GEC Marconi has sought to adduce evidence on this question. Commenting on the Practice Direction superseded by the above, the majority judgment in Grincelis v House (2000) 201 CLR 321 at 331 noted that it was accepted that the Direction had no statutory force or effect and that:“in its terms, it acknowledges, not only that its application is “subject to any evidence adduced”, but also that the rates stated in it are rates that are “appropriate to guide the Court” (emphasis added). Although the parties, and the Full Court of the Federal Court of Australia, referred to these rates as “commercial” rates of interest, we were taken to no evidence which would reveal the basis upon which they were struck. But there being no evidence about rates of interest, and litigants being on notice from the Practice Direction that the published rates will be taken to be appropriate to guide the Court in fixing interest under s 69, there would ordinarily be no reason to do other than apply those rates to damages of the kind now in question.” Before turning to the evidence adduced and its significance, I should comment, first, on the policies, purpose and character of pre-judgment interest. (i) First and foremost interest has a compensatory purpose. To quote again from Grincelis at 328-329:“As was noted in Gogic [(1991) 171 CLR 657 at 663]“The function of an award of interest is to compensate a plaintiff for the loss or detriment which he or she has suffered by being kept out of his or her money during the relevant period.”There is no doubt that this is a very important purpose of statutory provisions providing for the award of interest on the amount of a debt or damages in respect of the period between the cause of action accruing (or, in some statutory provisions, the commencement of the proceedings …) and the date of judgment. It may be, however, that statutory provisions for interest serve not only that purpose, but also a purpose of encouraging early resolution of litigation.”See also on encouraging dispute resolution, Hon JJ Spigelman, “Negligence: the Last Outpost of the Welfare State” (2002) 76 ALJ 432 at 449-450; J S Hill & Associates Ltd v Dawn [2001] ACTSC 28 at [23]; and see generally on interest Edelman and Cassidy, Interest Awards in Australia, §7.13 (2003); Tilbury, Civil Remedies, Vol 1, 3226ff (1990).
Decision
Reasons for decision
FINN J
I would make no order in favour of the Commonwealth in relation to these subpoenas.CONCLUSIONS I will make the following orders:(1)Interest is payable on awards made in favour of BHP-IT at the rates specified in the 2001 Practice Direction of the Supreme Court of the Australian Capital Territory.(2)Interest is payable to BHP-IT on its judgment against GEC Marconi for the periods agreed by the parties.(3)Interest is payable to BHP-IT on its judgment against the Commonwealth from 1 November 2001.(4) GEC Marconi to pay BHP-IT’s costs of the application.(5)GEC Marconi to pay BHP-IT 80 per cent of BHP-IT’s costs of the first cross-claim.(6)GEC Marconi Australia to pay BHP-IT’s costs of the claim made against GEC Marconi Australia.(7)BHP-IT to pay the Commonwealth’s costs of the second cross-claim to the extent that those costs relate to matters other than (a) the “reflexive” claims as described in these reasons for judgment and (b) CR3053 as to which there will be no order as to costs.(8)GEC Marconi to pay the Commonwealth’s costs of the second cross-claim to the extent that those costs relate to the “reflexive” claims.(9)GEC Marconi to pay the Commonwealth’s costs on the Notices to Produce served on the Commonwealth on a party and party basis.