Georgopoulos v Normetals Pty Ltd (No 2) - [2020] SASC 104

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
GEORGOPOULOS & ANOR v NORMETALS PTY LTD (No 2)
[2020] SASC 104
Judgment of The Honourable Justice Lovell
22 June 2020
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH DISCRETION OF COURT BELOW - PARTICULAR CASES - OTHER MATTERS - COSTS
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - INTEREST ON COSTS
On 13 February 2020, the appeal in this matter was allowed, increasing the appellants’ damages from $34,116 to $50,610. The respondent’s cross-appeal was dismissed. The discretion in relation to costs and interest was exercised afresh.
Point from which pre-judgment interest should run from – delay on the part of the plaintiff – whether interest forms part of the judgment sum – whether the question of costs should be governed by the formula in r 106 of the Magistrates Court (Civil) Rules 2013 – who is the successful party in the proceedings
Held, per Lovell J:
1. Pre-judgment interest usually accrues from the date on which the party was deprived of their money but delay on the part of a plaintiff is a factor to be given some weight in exercising the discretion.
2. The appellants are awarded a fixed sum of $27,000 in lieu of interest.
3. The “judgment sum” means the award of damages before interest is calculated.
4. Costs are to be awarded to the successful party in the proceedings. The appellants were the successful party at trial and on appeal.
5. The appellants are awarded costs of the trial calculated on the formula contained in r 106(1)(a) of the Magistrates Court (Civil) Rules 2013. The appellants are awarded costs of the appeal and cross-appeal on a party/party basis.
Magistrates Court Act 1991 (SA) s 34, s 37; Supreme Court Civil Supplementary Rules 2014 (SA) r 208, r 217; Magistrates Court (Civil) Rules 2013 (SA) r 106, referred to.
Maidment v Davis (2000) 77 SASR 167 ; Haines v Bendall (1991) 172 CLR 60; Stewart v Jacobsen [2000] SASC 198; Re John Baptist Nella [1989] FCA 142; Rayner v Pethick [2006] SASC 70; Machado & Anor v Underwood & Anor (No 2) [2016] SASCFC 123; Turley v Saffin (1975) 10 SASR 463, considered.

GEORGOPOULOS & ANOR v NORMETALS PTY LTD (No 2)
[2020] SASC 104
LOVELL J.
Background

On 13 February 2020, I allowed the appeal of Mr and Mrs Georgopoulos, increasing their damages from $34,116 to $50,610. I dismissed the respondent’s cross-appeal. Further submissions were made by the parties on the question of costs and interest relating both to the trial and the appeal (including the cross-appeal). As I have allowed the appeal and increased the damages awarded to the appellants, I must exercise the discretion in relation to costs and interest afresh.
Interest
Given the argument mounted by the appellants on the question of costs, it is convenient to…

Grounds of appeal

[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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Details

Case: [2020] SASC 104
Decision Date: 22 June 2020

CaseChat Overview and Summary

The appeal was brought by the plaintiffs, Georgopoulos, against the defendants, Normetals Pty Ltd, in relation to a decision made by the Magistrates Court of South Australia. The central issue was the calculation of pre-judgment interest, as governed by Section 34 of the Magistrates Court Act 1991 (SA). The plaintiffs argued for interest to be calculated from the date the liability to pay arose, while the defendants contended that interest should be limited to the period from the date of the summons. The appeal was heard by the Supreme Court of South Australia, which needed to determine the appropriate exercise of discretion regarding the award of pre-judgment interest, considering factors such as the plaintiffs' delay in issuing proceedings.

The court examined the statutory framework and the principles governing pre-judgment interest, recognising that interest serves a compensatory purpose rather than punitive. It considered the Magistrate's decision to limit interest to the period from the date of summons, which was influenced by the plaintiffs' delay in initiating proceedings. The Supreme Court acknowledged the principle that delay by the plaintiff can be a factor in determining whether interest should be awarded and in what amount, but held that limiting interest to the period from the date of summons was not appropriate. The court found that while the delay was a relevant factor, it did not justify the complete exclusion of interest for the entire period from when the cause of action arose.

The Supreme Court concluded that the Magistrate had not exercised the discretion correctly in limiting interest to the period from the date of summons. Instead, the court held that interest should run from the date the liability to pay arose, subject to adjustment for any relevant delay by the plaintiffs. The court awarded interest from the date of the cause of action to the date of judgment, reducing the amount of interest to account for the delay. The Supreme Court allowed the appeal in part, ordering a new trial to calculate the pre-judgment interest according to these principles. The court further ordered that the respondents pay the appellants' costs of the appeal, reflecting its view on the appropriate exercise of discretion and the impact of the plaintiffs' delay.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

LOVELL J

Section 34 of the Magistrates Court Act 1991 (SA) (‘Magistrates Court Act’) governs the question of interest. It relevantly provides:34—Pre-judgment interest(1)Unless good reason is shown to the contrary, the Court will, on the application of a party in whose favour a monetary judgment has been, or is to be, given include in the judgment an award of interest in accordance with this section.(2)The interest—(a) will be calculated at a rate fixed by the Court; and(b) will be calculated in respect of a period fixed by the Court (which must, however, in the case of a judgment given on a liquidated claim, be the period running from when the liability to pay the amount of the claim fell due to the date of judgment unless the Court otherwise determines); and(c) is, in accordance with the Court's determination, payable in respect of the whole or part of the amount for which judgment is given.(3)The Court may, without proceeding to calculate interest under subsection (2), award a lump sum instead of interest. The Court has an unfettered discretion as to the rate of interest to be fixed and, in relation to an unliquidated sum, the period over which interest runs. The award of pre-judgment interest is compensatory, that is, it compensates a party for being kept out of his or her money and is not to punish defendants from delaying settlement of claims.[1] An award of interest up to the date of judgment is not awarded as compensation for the “damage” done in the commission of the tort but it is an essential element in achieving true compensation for that damage. Pre-judgment interest usually accrues from the date on which the party was deprived of their money. This allows the plaintiff to be placed in the situation, as far as money can do, in which he or she would have been but for the defendant’s tort.[2] [1] Maidment v Davis (2000) 77 SASR 167 at 180 [117]-[120].[2] Haines v Bendall (1991) 172 CLR 60 at 66. However, when exercising the discretion to award interest, delay on the part of the plaintiff may be taken into account as a factor against the award of interest, or in favour of reducing the amount of interest that would otherwise be awarded.[3] While the respondent has had the benefit of the appellants’ money for the entire period from when the cause of action arose, the courts should not encourage plaintiffs to treat defendants as a kind of “risk free, interest bearing investment”.[4] The Magistrate determined that the appellants delayed the issue of proceedings in this matter until the six-year time limit nearly expired; he considered that to award interest for the entire period of the conversion would be unfair to the respondent. While I must exercise the discretion afresh, I agree with his finding that the delay in issuing proceedings is a matter to be given some weight when exercising the discretion. However, I do not agree, as the Magistrate found, that interest should only run from the date of issue of the summons.[3] Stewart v Jacobsen [2000] SASC 198.[4] Re John Baptist Nella [1989] FCA 142 at [12] per French J (as he then was).

Ratio Decidendi

Legal Principle Established

Established by: LOVELL J

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