Glentham Pty Ltd v Luxer Holdings Pty Ltd
[2006] WASC 132 (S)
GLENTHAM PTY LTD -v- LUXER HOLDINGS PTY LTD & ANOR [2006] WASC 132 (S)
| Link to Appeal : | [2007] WASCA 209 |
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2006] WASC 132 (S) | |
| Case No: | CIV:2733/2001 | 13-16 MARCH, 30 JUNE, 21 JULY 2006 | |
| Coram: | LE MIERE J | 30/06/06 | |
| 18/08/06 | |||
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Defendants to pay interest on damages and debt | ||
| B | |||
| PDF Version |
| Parties: | GLENTHAM PTY LTD LUXER HOLDINGS PTY LTD MICHAEL JOHN McPHEE LUXER HOLDINGS PTY LTD (ACN 009 454 077) GLENTHAM PTY LTD (ACN 008 865 692) |
Catchwords: | Interest on damages award Operation of s 34 of the Limitation Act 1935 (WA) Whether amount is "arrears of interest" |
Legislation: | Interpretation Act 1984 (WA), s 32 Limitation Act 1935 (WA), s 34 Limitation Legislation Amendment and Repeal Act 2005 (WA), s 4 |
Case References: | Byrne v Robinson (1839) 1 I Eq R 333; (1839) 1 Dr & Wal 688 Mellersh v Brown (1890) 45 Ch 225 Queen Anne's Bounty v Tithe Redemption Commission [1938] Ch 229 Thomson v Eastwood (1877) 2 AC 215 Dillon v Cruise (1840) 3 I Eq R 70 Henry Roberts (1880) 14 Ch 49 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
DECISION : 18 AUGUST 2006 FILE NO/S : CIV 2733 of 2001 BETWEEN : GLENTHAM PTY LTD
- Plaintiff
AND
LUXER HOLDINGS PTY LTD
First Defendant
MICHAEL JOHN McPHEE
Second Defendant
- First Plaintiff
MICHAEL JOHN McPHEE
Second Plaintiff
AND
GLENTHAM PTY LTD (ACN 008 865 692)
Defendant
(Page 2)
Catchwords:
Interest on damages award - Operation of s 34 of the Limitation Act 1935 (WA) - Whether amount is "arrears of interest"
Legislation:
Interpretation Act 1984 (WA), s 32
Limitation Act 1935 (WA), s 34
Limitation Legislation Amendment and Repeal Act 2005 (WA), s 4
Result:
Defendants to pay interest on damages and debt
Category: B
(Page 3)
Representation:
CIV 2733 of 2001
Counsel:
Plaintiff : Mr M C Hotchkin
First Defendant : Mr S G Scott
Second Defendant : Mr S G Scott
Solicitors:
Plaintiff : Hotchkin Hanly
First Defendant : Stables Scott
Second Defendant : Stables Scott
CIV 2592 of 2004
Counsel:
First Plaintiff : Mr S G Scott
Second Plaintiff : Mr S G Scott
Defendant : Mr M C Hotchkin
Solicitors:
First Plaintiff : Stables Scott
Second Plaintiff : Stables Scott
Defendant : Hotchkin Hanly
Case(s) referred to in judgment(s):
Byrne v Robinson (1839) 1 I Eq R 333; (1839) 1 Dr & Wal 688
Mellersh v Brown (1890) 45 Ch 225
Queen Anne's Bounty v Tithe Redemption Commission [1938] Ch 229
Thomson v Eastwood (1877) 2 AC 215
(Page 4)
Case(s) also cited:
Dillon v Cruise (1840) 3 I Eq R 70
Henry Roberts (1880) 14 Ch 49
(Page 5)
1 LE MIERE J:This is an action arising from the repudiation of a commercial lease agreement. The plaintiff sued the lessee and the guarantor both to recover amounts due under the lease and for damages in the order of over $700,000. I delivered judgment against the defendants on 30 June 2006, however, the motion for judgment was adjourned to a later hearing in order for parties to make submissions as to the quantum of interest that had accrued on the debts and damages payable.
2 At the resumed hearing, counsel for the defendants submitted, essentially, that s 34 of the Limitation Act 1935 (WA) (the "Act") operated to cap the total amount of interest that could be recovered by the plaintiff. It was accepted by counsel for the plaintiff that the Act applied to this case, in spite of the recent repeal of that legislation by the Limitation Legislation Amendment and Repeal Act 2005 (WA). The application of the earlier legislation to the present case is preserved by virtue of s 4(2) of the amending Act; I need not consider the new legislation further.
Section 34 of the Limitation Act 1934
3 Section 34 of the Act provides:
"34. No arrears of rent or interest to be recovered for more than 6 years
No arrears of rent or of interest in respect of any sum of money charged upon or payable out of any land or rent, or in respect of any legacy, or any damages in respect of such arrears of rent or interest, shall be recovered by any distress, action or suit, but within 6 years next after the same respectively have become due, or next after an acknowledgment of the same in writing has been given to the person entitled thereto, or his agent, signed by the person by whom the same was payable, or his agent:
…
Provided also, that this section is subject to section 38(1)(d) and (e)."
(Page 6)
- section itself refers to "arrears of rent or of interest". Subsection 32(2) of the Interpretation Act 1984 (WA) states that "a heading to a section … of a written law, or to a portion of a section … shall be taken not to be part of the written law" and in my opinion, the words of the section itself are plainly the correct source of the law.
5 Whether this case falls within the scope of s 34 therefore depends upon whether it:
1. relates to arrears of rent;
2. relates to arrears of interest in respect of:
a. any sum of money charged upon or payable out of any land or rent, or
b. any legacy; or
3. relates to damages in respect of such arrears of rent or interest.
6 The defendants argue that the damages claimed, which are loss of bargain damages, are damages in respect of arrears of rent. On that basis, the defendants submit that "interest on those damages under s 34 is capped at 6 years".
7 In my opinion, this interpretation of s 34 is not correct. Under s 34, whether or not interest is capped (or at any rate, whether the right to begin an action to recover interest is limited) depends upon whether the arrears of interest are in respect of any sum of money charged upon or payable out of any land or rent or any legacy. These are the only circumstances in which s 34 constrains arrears of interest. The arrears of interest covered by s 34 do not include interest flowing from a damages award, irrespective of whether the damages are in respect of arrears of rent.
8 Counsel for the defendant relied upon several authorities from the United Kingdom, which dealt with virtually the same legislation as it appeared in Britain prior to being received into Western Australian law (See The Law Reform Commission of Western Australia, "Report on Limitation and Notice of Actions", January 1997 at p 43 for discussion of the history of the Limitation Act 1935 (WA)). These cases were provided in support of the argument that arrears of interest were to be capped at six years from their due date. Importantly, these cases all relate to interest as a debt in arrears itself, rather than interest as it arises from damages. (See, for example, Thomson v Eastwood (1877) 2 AC 215, in which interest from an estate was bequeathed under a Will; Byrne v Robinson(1839) 1 I
(Page 7)
- Eq R 333; (1839) 1 Dr & Wal 688, in which interest upon a fixed sum was to be paid to a person until one year after the death of her father, at which time the principal sum was to be paid; or Mellersh v Brown (1890) 45 Ch 225, in which interest pursuant to a mortgage was in a state of arrears.) In all of those cases, interest formed a component of the claim against the defending party.
9 "Arrears" has been described as a "well known word commonly used to describe sums overdue and payable in respect of periods of time": Queen Anne's Bounty v Tithe Redemption Commission[1938] Ch 229. It is clear that the interest in dispute in this case is not an amount that became overdue as a result of any arrangement between the parties; rather the interest has been calculated after judgment, on the basis of the award made to the plaintiff. The interest claimed against both defendants includes components of interest on debt and interest on damages. The interest was not itself an unpaid sum due to the plaintiff in respect of a period of time and therefore cannot properly be characterised as arrears of interest.
Conclusion
10 Counsel for the defendants conceded that if it could not be said that s 34 limits interest related to damages in respect of arrears of rent, then s 34 did not apply at all to this case. In my opinion, the amount in dispute is not an amount of arrears of rent or an amount of arrears of interest. For the reasons stated I do not accept that interest relating to loss of bargain damages in respect of arrears of rent is in any way affected by the provisions of s 34 of the Act. It is therefore not necessary for me to consider whether the interest is in respect of a sum of money charged or payable upon any land or rent or any legacy; nor is it necessary for me to consider whether the interest itself or simply the right to commence an action is limited by the scope of s 34.
11 I find the defendants liable to pay interest in respect of both the debt and damages awarded to the plaintiff in my judgment of 30 June 2006.
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