Gray v Lavan (a firm)

The respondents, Gray, sought compound interest against the appellants, Lavan (a firm), in an Australian court. The dispute arose from the extinguishment of native title over certain land and the compensation owed to the respondents for that extinguishment. The respondents argued that they were entitled to compound interest on the compensation awarded. The appellants contended that the entitlement to compound interest was not applicable in this context. The case was heard in the High Court of Australia.

The primary legal issue before the court was whether the respondents were entitled to compound interest on the compensation awarded for the extinguishment of native title. The respondents argued that the principle of compound interest should apply because the appellants had unjustly enriched themselves by using the land and its resources without paying the respondents interest on the compensation owed. The appellants contended that the entitlement to compound interest was not applicable because the claim was not for restitution of benefits unjustly obtained but for compensation for the loss caused by the extinguishment of native title.

The court considered the arguments and authorities on the entitlement to compound interest. The majority of the court held that there was no free-standing entitlement to compound interest in this context. They noted that the existing state of authority did not favour such a broad proposition. The court also held that the claim was not for restitution of benefits unjustly obtained but for just compensation for the loss caused by the extinguishment of native title. Therefore, the entitlement to compound interest was not applicable. The court rejected the respondents' contention and held that they were not entitled to compound interest on the compensation awarded.

The court made an order dismissing the respondents' claim for compound interest on the compensation awarded for the extinguishment of native title. The respondents were not entitled to compound interest on the compensation awarded.