Grincelis v House
[2000] HCATrans 136
IN THE HIGH COURT OF AUSTRALIA
Registry No C20 of 1999
B e t w e e n -
ANDREW GRINCELIS by his next friend TADAS GRINCELIS
Appellant
and
STEPHEN HOUSE
Respondent
GLEESON CJ
GAUDRON J
McHUGH J
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON WEDNESDAY, 5 APRIL 2000, AT 12.11 PM
Copyright in the High Court of Australia
MR L.M. MORRIS, QC: May it please the Court, I appear for the appellant with my learned junior, MS C.E. ADAMSON. (instructed by Abbott Tout Harper & Blain).
Might I start with an apology, your Honour? There is a mathematical error in the appellant’s submissions and I have shown it to my learned friend and I have prepared by way of substitution seven substitute copy submissions, the correction being underlined in red. Might I hand them up, your Honour.
GLEESON CJ: Thank you, Mr Morris, yes.
M.J. NEIL, QC: May it please the Court, I appear with my learned friend, MR R.C. TONNER, for the respondent, the proposed cross‑appellant. (instructed by J.M. Crestani)
GLEESON CJ: Yes, Mr Morris.
MR MORRIS: This appeal concerns a small segment of damages in a substantial award made to a plaintiff who maintained from trial through to the Full Federal Court hearing that interest ought be awarded and paid upon that component of the verdict which could be described as the Griffiths v Kerkemeyer component. The matter was initially heard before Master Hogan and the chronology sets out its path to the Full Federal Court. An allowance was made for that segment of damage, that is to say, the Griffiths v Kerkemeyer damage, by the Master. That was reaffirmed in the Full Court of the Australian Capital Territory where an appeal was taken by the defendant, the respondent in these proceedings, and a cross-appeal put on in respect of the failure to allow interest by the Master at that stage.
The plea for interest was denied by a majority in the Full Court of the Australian Capital Territory, there being a dissenting judgment by Mr Justice Higgins which allowed the interest and varied in respect of various other components of the judgment appealed from, which it was reduced in a number of respects which need not concern this Court. The appellant here then went to the Full Federal Court where other matters were addressed and the question of interest on the Griffiths v Kirkemeyer component of the judgment was reventilated. All the judges in the Full Federal Court awarded interest on the Griffiths v Kirkemeyer component, but the variation occurred between the majority of the judges and the minority of the judges as to how that problem should be approached.
Your Honours would be familiar with the Gogic interest decision which relates, we respectfully submit, as our written submissions illustrate or seek to illustrate, Gogic was a case which concerned an award of general damages and in that case the approach of the court was to compromise the matter of interest because general damages were seen to be determined at the moment of trial, not at the moment of injury, so that there was a creep factor in any event in the award of general damages, although the plaintiff had, in respect of the past general damages, been out of his money between the date of injury and the date of trial.
KIRBY J: Do you dispute Justice Beazley’s opinion in one of the cases that Griffiths v Kirkemeyer damages are of their nature to be categorised as general damages?
MR MORRIS: That is in Sullivan, I think, your Honour, a recent – yes, well, I think Mr Justice Mr Justice Foster in this case approached the problem by saying that Griffiths v Kirkemeyer damages were not probably special damages, which is another way of approaching the problem. But Griffiths v Kirkemeyer is not so expressed and is not being so dealt with by this Court because this Court has found in Van Gervan that when approaching the problem of quantifying this loss, it is the commercial cost of satisfying the need generated by the injury and, indeed, it is Van Gervan, with respect, which gives rise, in our respectful submission, to the validity of the position for which we argue because in that case the Court made no distinction between services which had been provided actually at a commercial cost and those services which had been provided notionally; and clearly the judgment in Van Gervan posits that there cannot be a dissection for the purpose of examining that segment of damages.
McHUGH J: Logically, your argument is not easy to rebut but, as a matter of policy, why should you get interest on money that you have not had to pay out and which, theoretically, is for such payments?
MR MORRIS: We come here, I suppose, your Honour, it must be said, for a disabled person, so that it is not the usual case. We come here because Van Gervan indicates that the logical extension of the reasoning in it would posit that it matters not whether the services were commercially supplied or notionally supplied.
McHUGH J: I appreciate that, but one cannot help thinking that at the back of the Griffiths v Kerkemeyer principle was the notion that the defendant should not be any better off in a case where the plaintiff has the services done voluntarily and a case where the plaintiff pays for the services. But now you want to extend it further, you want payment of interest on top of that. Why not, as a matter of policy, should not the Court draw the line – and that is all it could be. I mean, Griffiths v Kerkemeyer always seemed to me to be contrary in principle to Blundell v Musgrave for a start.
MR MORRIS: Your Honour, your Honour’s views on this subject are known, but might I say this. There is another, perhaps not particularly powerful reason, but Marsland v Andjelic, a New South Wales authority, dealt with this very problem and dealt with it in circumstances where a finding was made that, given the foundation in Van Gervan, interest should be awarded at commercial rates.
KIRBY J: Perhaps that was because the Court of Appeal felt itself bound to follow logic rather than to substitute policy.
MR MORRIS: Well, I do not know whether your Honours wish me to read the passage but it is to be found in 32 NSWLR. The report commences at 649 and 653 between the third paragraph D and that which follows is the reasoning which supports the argument for which we contend concluding, if I might just read - not the reasoning, but the passage at 654 which sort of brings it together commencing with – might I read it to your Honours:
However, in respect of voluntary domestic services, if, as the High Court mandates, compensation is to be given at full commercial rates then payment to the provider of the services, if it is to be made, would be made at present rates and not at the rate which prevailed when the service was provided. Compensation is, however, usually awarded at the commercial rate.
Logically therefore, the plaintiff, in respect of past voluntary services, should be entitled to either (a) compensation at the rate prevailing when the service was provided, together with interest in full from the time of provision whether the service was paid for or not; or (b) such compensation at the present gross rate of each service, whether paid for or not.
Now, what happened here was at the trial the historical cost of the provision of the service required was scheduled and done in a fashion which picked up the changes in the relevant award over the passage of time between injury and the date of trial and that can be found in pages 17 to 23 of the appeal book, so that the actual cost of the services was furnished to the trial judge, the Master rather, in a historical way which picks up (a) of the judgment in Marsland v Andjelic.
Otherwise, what would have happened would have been the alternative method of calculating interest which in fact in this case would have exceeded, had it been done that way, the interest to be awarded by dealing with it historically. There is another feature to the matter. The actual rate of commercial interest was never agreed between counsel on either side but was predicated at 12 per cent as being a reasonable commercial rate to be judged against the court rates which were then in place in respect of pre‑judgment interest and post‑judgment interest.
KIRBY J: What do you mean by “predicated” becaise I take Mr Neil to take the point that there was no evidence or factual determination of this question.
MR MORRIS: There was a schedule handed up which is part of our papers, your Honour.
KIRBY J: Was that consented to?
MR MORRIS: I do not know if that was - your Honour is quite right. My learned friend will contend that there is a no evidence point in the centre of this case. I accept that that is a difficulty in one sense save and except I believe both before the Master and throughout the proceedings which followed the interest up to judgment schedule, which is annexed to our arguments, bearing date 25 May 1993, was used as a guideline.
If your Honours were to look at the judgment of Mr Justice Madgwick who awarded the interest at commercial rates, but deducted from it an arbitrary amount for what he saw as the incidence of taxation, the rates in his judgment are the post‑judgment rates which of course, it may be said – I do not want to anticipate what my learned friend might say - but it might be said that they contain a penalty to ensure that people who suffer a judgment of the court are met with some urgency in meeting it. In other words, they are not a realistic commercial rate.
CALLINAN J: None of it seems realistic to me, Mr Morris, and the look of almost inexpressible delight on plaintiffs’ faces when they are told that they do not have to pay the past carer any of the money that they are getting for notional past care is always apparent. The whole process is so artificial when you start talking about the incidence of tax on the interest on past services for which no payment has ever been made.
MR MORRIS: I come here to put this appellant’s case in accordance with the principles as they exist. They might change. I am fearful that that may be so, given your Honour’s comments that ‑ ‑ ‑
McHUGH J: You seek to do more than that, do you not? You seek to derive a logical proposition from the cases. Lord Halsbury once said that he vehemently denied that a case was authority for more than it actually decided and that it was not an authority for those propositions which could be logically derived from it.
MR MORRIS: Well, your Honour, if in fact the ‑ ‑ ‑
KIRBY J: It was in the context of a nice performance.
MR MORRIS: That is difficult. I appreciate that but if in fact the law is in respect of determining what is to be the capital sum that it matters not whether it is provided notionally or commercially, it is the need and the commercial cost of providing it which generates the capital sum and if it is then no longer relevant because the injured party – there would have to be a distinction drawn where the injured party had actually engaged in the commercial cost and then, on one view of it, you would have two classes of Griffiths v Kerkemeyer, one attracting interest, one not attracting interest.
McHUGH J: But that may be the case if somebody has paid money out and has incurred a liability in respect of it but the idea that you should get commercial rates of interest containing an inflationary component to protect capital in a case where you have never paid out any sums of money just strikes me as extraordinary. These cases – that is Van Gervan and Griffiths v Kerkemeyer were, to a large extent, policy cases. Blundell v Musgrave back in 96 CLR was the case of principle. Pragmatism prevailed in Griffiths v Kerkemeyer, but, why should not we draw the line?
MR MORRIS: Well, your Honour, the reason that the line should not be drawn is because to do so would provide a non-logical consequence to the way the matters are then dealt with today.
McHUGH J: Well, I need not repeat for you Oliver Wendell Holmes’ famous dictum that the life of the law is not logic, it is experience.
MR MORRIS: Might I just say this ‑ ‑ ‑
CALLINAN J: To do what you suggest might be the first time that logic has entered into the whole area.
MR MORRIS: The force of your Honours’ attitude towards this specie of additional damages for the plaintiff was ‑ ‑ ‑
HAYNE J: The reward might be a Freudian slip.
MR MORRIS: - - - was reflected in the fact that the New South Wales legislature, we would, with great respect, submit that they would be the proper people – or the ACT legislature in this case dealt with the problem which derived from Marsland v Andjelic by amending the statute.
McHUGH J: That is why that point did not come up to us. When Marsland came up to us, that point was moot.
MR MORRIS: It was not argued for that reason.
GAUDRON J: I may be the only one on this Bench to have this view, but it does not seem to me that your propositions follow logically. It does not seem to me to be the case that if it is compensated for at commercial rates, then it should attract a commercial rate of interest. That is because I think a number of things are being confused in that statement. The damages are for the need occasioned. The commercial rates are simply the measure of them. It may not be a perfect measure. There is no perfect measure of damages in personal injury cases, as we all know. That is the measure that has been selected. But if the damage is the need, then where is the logic in saying commercial rates of interest?
MR MORRIS: Because there is a problem associated with that in this way, that if, in fact, contrary to the fact here, the plaintiff had laid out moneys, identifiable moneys, and undoubtedly ‑ ‑ ‑
GAUDRON J: But he had incurred actual expense.
MR MORRIS: Incurred actual expense ‑ ‑ ‑
GAUDRON J: Well, again, there does not seem to me to be any illogic or any inconsistency in saying that there should be interest where actual expense has been incurred and where you are compensating simply for the need.
MR MORRIS: The problem with that is that in the quantification of damages, bearing in mind the difficulties one has in quantifying them mentioned by your Honour, one gets all sorts of unprovable material. This man came out of hospital after months and months and months and went and lived with his parents. Moneys had to be expended in respect of his day‑to‑day care, the minutiae of which are now totally lost. So that in fact, in this case it cannot be said, he being very badly injured, that the damages attracted by this are highly notional.
KIRBY J: Why is not the correct principle then to say that where actual sums have been properly incurred that they represent special damages and you get commercial rates of interest on them but where it is a notional sum they are part of general damages for which, as Justice Beazley said in that case, it is true, you look to how it can be calculated by reference to going rates but you do not get interest on it because you have not ever been out of pocket?
MR MORRIS: Well, if Van Gervan v Fenton is correct, and we would respectfully submit that it is correct, it picks up the practical difficulty which is associated with a badly injured person coming home to the care of a family, no records being kept and some evidentiary situation arising years later when people grope around to try and find out what has actually happened and that is why the commercial rate in fact is the proper practical pragmatic way to approach it.
McHUGH J: But it is not, is it? What you put to Justice Kirby is a partial answer in respect of the expenditure that is incurred and of which no record is kept but that is hardly the bulk of this claim. The bulk of this claim is for rates of pay, notional rates of pay, for services ‑ ‑ ‑
MR MORRIS: But that is the route the court has taken ‑ ‑ ‑
McHUGH J: ‑ ‑ ‑ that could have been or may not even have been rendered, but if you had a need for them then Van Gervan says you are entitled to be compensated for the need, even though the need was never fulfilled or you never had any services in respect of those needs.
MR MORRIS: Well, that has always been the problem with this area ‑ ‑ ‑
McHUGH J: I know, but it is one thing for a court to say, “Well, as a matter of justice we are going to give the plaintiff compensation for that need even though in actual fact there was never any services rendered in respect of that need.” It seems to me another matter altogether to say that you should get any interest rate at all for it and, particularly, that you should get commercial rates of interest, commercial rates of interest ordinarily having a component within them because of inflationary factors.
MR MORRIS: There is no evidence of commercial rates in this case. What we did was we put forward, by way of comparison with the court rates, 12 per cent when the court rates were about 15, in an attempt to make a practical approach to the problem. I mean, I accept, your Honour, that it probably, with hindsight, could have been done with an actuary but it was not and I am met with that problem. Well, I do not think there is anything more I can say about it because the whole thing is predicated on Marsland and on Van Gervan.
McHUGH J: Yes.
MR MORRIS: The written material deals with that and I am not sure that I should – yes, your Honour, my learned junior has pointed out to me that a schedule of interest which is annexed to our argument, that is the pre‑judgment interest – it is not attached to the red underlined submissions, it is attached to the old submissions.
McHUGH J: I have one on page 5, calculation schedule. Is that – headed ‑ ‑ ‑
MR MORRIS: It looks like that, if I may be so rude.
McHUGH J: No.
KIRBY J: No, I think we have torn that up.
McHUGH J: Yes, I have torn mine up.
KIRBY J: What does that say?
MR MORRIS: It says:
When computing interest for the purposes of s. 69 of the Australian Capital Territory Supreme Court Act 1933, subject to any evidence adduced, -
there was none adduced. That would be what the defendant would have to do –
it may be taken that the following yearly rates of interest are appropriate to guide the Court –
KIRBY J: Is this a statutory rule or ‑ ‑ ‑
MR MORRIS: It is a practice direction, I think, your Honour. I do not quite ‑ ‑ ‑
KIRBY J: Is it was made by the judges under power, is it, under statutory power?
MR MORRIS: It is under the hand of the Registrar and it derives from the power given to the Court in section 69 to award interest on judgments, which was the problem with Hodges v Frost.
CALLINAN J: Mr Morris, it is set out at page 209, it is not, of the appeal book, or the rates are, I think. There is a table in Justice ‑ ‑ ‑
MR MORRIS: No, your Honour, I am sorry, that is post-judgment interest, and Mr Justice Madgwick researched that himself. We did not hand that schedule up.
CALLINAN J: Well, his Honour says:
Those rates, from injury to trial, have been –
MR MORRIS: I am sorry, your Honour.
CALLINAN J: At page 209, Justice Madgwick says, at line 19:
Those rates, from injury to trial, have been –
Is that not a table of the kind to which you are referring? It is not post trial, it is from injury to trial.
KIRBY J: This practice direction goes back to 1974 and we are not really concerned with that. Justice Madgwick seems to have started later in 1989, that being ‑ ‑ ‑
CALLINAN J: He started about the date of the injury, has he not, I think? Is that right?
MR MORRIS: That is right, your Honour.
CALLINAN J: Yes.
HAYNE J: Are these rates truly commercial rates or are they penal rates?
MR MORRIS: These rates in Mr Justice Madgwick’s judgment are penal rates.
HAYNE J: Yes, and are the rates you have just taken us to on the practice direction ‑ ‑ ‑
MR MORRIS: No, interest up to the time of judgment.
HAYNE J: I understand that, but are they intended by the judges issuing the practice direction as penal rates or as commercial rates, or what?
MR MORRIS: They are intended as compensatory, not rates intended to discourage late payment. They are there to provide proper compensation to the litigant up to the time of judgment.
HAYNE J: As I understand it, the practice direction is related to section 69 of the Supreme Court Act which relates, in turn, to damages by way of interest.
MR MORRIS: Might I just read the first paragraph of 69, your Honour?
HAYNE J: Yes.
MR MORRIS:
In any proceedings for the recovery of any money (including any debt or damages or the value of any goods) the court shall, upon application, unless good cause is shown to the contrary –
(a) order –
and so on.
HAYNE J: Yes.
MR MORRIS: Would it assist if we handed up a copy of this ‑ ‑ ‑
HAYNE J: I have it.
MR MORRIS: You have it. Well, having said that, your Honours, I think I cannot put any more. The thrust of the argument is contained in our written submissions.
KIRBY J: Could I just ask you this, without going in to the detail of it? There has been disparity of response of the appellate courts throughout Australian on this issue. What is the approach that most of the courts have taken? Have they taken, accepting Justice McHugh’s dichotomy, the path of logic, as they take it from this Court’s reasoning in Van Gervan, which is what I assume Marsland has done, or the part of what one might call, policy or commonsense, that you stand back from it and then think, “Well, this seems to be unrealistic to impose commercial rates on something that you have never been out of pocket for”?
MR MORRIS: They vary State to State, your Honour, and they are dealt with in my learned friend’s cross-appeal which endeavours to strike down the validity of a claim for interest at all on this species of damage. They are fully set out – in so far as the cases there illustrate, the variation State to State, we do not disagree with that analysis.
KIRBY J: Is your only answer to the sense of unreasonableness of giving interest at commercial rates, the suggestion to the Court that that is what logically follows from its earlier decision? Is there any other reason of principle or policy that you can refer to that would support the argument?
MR MORRIS: I do not believe so, it is purely a logical development and the following of Marsland v Andjelic. Of course, we used an historical method of calculation for the payments. There was a compliance with the paragraph A requirement in Marsland. It was not the rate at the time of judgment.
KIRBY J: I suppose you have, as it has already been indicated, this much, that if part of the Griffiths v Kerkemeyer damages, the head, relates to actual out of pocket expenses, then to that extent the head of damage should attract commercial rates of interest because you are actually out of pocket.
MR MORRIS: Yes.
KIRBY J: Then to the extent that it does not and you are not out of pocket, then the issue of principle is presented as to whether one has a differential rate of interest or one strikes a mean, or one gives no interest at all.
MR MORRIS: Either a Gogic rate or some other method or no interest at all. Bearing in mind the matter which I put to your Honour about the fact that it is undeniable in all these catastrophe cases that whoever the carer is, there is a considerable level of expenditure which might never be capable of retrieval in most cases by way of evidence by the time the thing comes to trial.
KIRBY J: I suppose also bearing in mind that although the expenditure will be different in different cases and within the one case, that conceptually it has been suggested there is a single notion behind this head of damages.
MR MORRIS: Yes, your Honour.
KIRBY J: Is it not time to reconceptualise and provide that if you are out of pocket that is a special damage item because, if it is reasonably attributable to the wrong of the defendant, then the defendant should pay it and if you have actually incurred that expense you get interest on it, whereas if it is, as it were, compensating for what a family or friends have done, then you get an allowance for general damages. I think Justice Deane said in one case it is often assumed that some compensation may be provided to the person who has done the work or it will flow over to their benefit in some way.
MR MORRIS: Well, your Honour, it has some complications, not in the Australian Capital Territory where general damages in this category of case remain uncapped, but all the catastrophe cases in New South Wales would reach the statutory limit, or most of them would, where substantial sums of this category of damage may attach, so that if the rule is to be one of general application, it would be complicated by the fact that where there are statutory caps there would be a difficulty in properly compensating the injured person. That is not so with this case but ‑ ‑ ‑
KIRBY J: But one might dislike statutory caps but the falling out of the statute on the principle - if we are looking for a more stable principle, the
approach that I have suggested seems to be a more stable principle of the common law. One does not, I think, fashion the principles of the common law in order to avoid an unpalatable concept of a statutory provision.
MR MORRIS: No, I accept that. I merely drew your Honours’ attention to that because if it is put into the general damages category then there are jurisdictions where it cannot be fulfilled but we would argue ‑ ‑ ‑
KIRBY J: Into the general damages or the special damages?
MR MORRIS: If it is put into special damages, that is fine. I have not examined it precisely but I imagine that there are restrictions under the Motor Accidents Act in New South Wales as to both rate and hours for this species of damage. Until you get to, say, a certain threshold you get none and then you only get it at a scheduled rate under the Act. So, it is where the legislatures have stepped in they have stepped in in sympathy with the views expressed by Justice McHugh to restrict this area of recovery rather than to expand it, but, it is my respectful submission that as the law stands this appellant would be entitled to damages on Griffiths v Kerkemeyer at commercial rates. If your Honours please.
GLEESON CJ: We will adjourn until 2.15 pm.
AT 12.48 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.17 PM:
GLEESON CJ: Yes, Mr Neil.
MR NEIL: May it please the Court, we rely on our written submissions. By supplementation could I take up, firstly, the point raised by Justice Kirby? The Griffiths v Kerkemeyer damages, which I might shortly call G v K, are damages based on the need for past services where the services are performed voluntarily but not by definition where they are paid for. So there is no issue where the services were paid for. Interest would follow at common law or may or may not follow in those States where there are statutory schemes. It also relates to previous or past care need, even, as we understand it, not fulfilled.
KIRBY J: Is that true in this case? The only claim that is made for Griffiths v Kerkemeyer head of damages is for voluntary services provided without immediate payment by members of the family or others.
MR NEIL: Yes, by the definition of G v K or voluntary services but the argument advanced is that there should be interest notwithstanding and that is where the issue is drawn. To the extent that there may have been some lost receipts or the like, that would have been covered by bringing evidence. Even if it was somewhat difficult to assess, a judge could assess. It would become special damages and would not be Griffiths v Kerkemeyer. So we are only concerned with past voluntary or unfulfilled services. There is no problem ‑ ‑ ‑
KIRBY J: And the reason for getting the evidence relating to the people who provide domestic services is because that is the only way in which people have conceived a way of calculating the quantum of the voluntary service.
MR NEIL: And, your Honour, because it was said in Griffiths v Kirkemeyer that the commercial cost was to be the yardstick and Van Gervan even expanded that and took it further, so that you are entitled, even if the need is not fulfilled, in whole or in part, or if it is fulfilled voluntarily by the family members, you are entitled to come and bring what would have been the charges if, say, the Dial an Angel people would had come in and done it for you, and you are entitled to damages at those gross commercial rates under the law, as recently said in Van Gervan. So that is why there are brought to court the commercial rates, usually on the progressive basis because you work out what if a care service provider you had contracted with, some agency, and if they had charged you for sending in their employees or subcontractors, and all their on-costs for their workers’ compensation and everything else, what they would have charged you
wat those rates per year is the measure of the damages of the unfilled or voluntary service.
KIRBY J: Once you get to that point and have taken that step, as the court did, is not the next logical step to say, “Well, you can criticise that as unrealistic, but the consequence in logic is that you then get the interest on it”.
MR NEIL: We would submit, no, your Honour, as our argument says it is not logical but if it is, policy should come into play to correct the problem. We have set out in our submissions and list various judgments historically and in the States, different States, setting out the views that were taken and, for example, in Settree v Roberts, which is on our list, the Court of Appeal in New South Wales Justices Hope, Hutley and Mahoney, the progressive rates are set out there but their Honours had no difficulty with saying, nonetheless, there should not be interest because it had not been paid. There was nothing out of pocket. There was no requirement to compensate. There was no lost investment and the like.
CALLINAN J: Mr Neil, could I ask you another question. I doubt whether it does bear on anything you are saying, but is any of the money that – if money were to be paid to carers, if it were, would any of it be a tax deduction?
MR NEIL: In the hands of - - -?
CALLINAN J: In the hands of the payer?
MR NEIL: I would not, confidently, be able to answer that, your Honour, in this sense, that as we understand it, the moneys under Whittaker’s Case, either as the damages or as to any interest in the hands of the plaintiff would not be taxable.
CALLINAN J: No, but if it were a tax deduction and if the plaintiff was successful in recovering full economic loss up to the date of the trial, then the plaintiff might be being overcompensated if, in fact, the plaintiff is not charged or if, in fact, the defendant is not given the benefit of a notional tax deduction which the plaintiff might have got had the money been paid.
MR NEIL: Your Honour, we would adopt that if we ‑ ‑ ‑
CALLINAN J: I do not know what the answer is ‑ ‑ ‑
McHUGH J: Well, unless there is some specific section in the Act, I do not think it would be a deduction after all ‑ ‑ ‑
GLEESON CJ: Section 51 would not cover it.
CALLINAN J: No.
McHUGH J: Section 51 would not cover it because again and again it has been held that childcare is not a deduction so ‑ ‑ ‑
GLEESON CJ: Because it is private.
McHUGH J: It is private.
MR NEIL: Yes.
CALLINAN J: Yes, but I am not sure that this is in a different category. If a person is ill or injured, I am not sure that, in all the circumstances, there would not be some deduction. I just do not know. Anyway, nobody takes the point here.
MR NEIL: The difficulties I see in that particular point is that there probably is a deduction, I am not sure, but if it is not taxable in the hands of the plaintiff, it is a bit hard to see how, for that reason, it would mitigate against him having a deduction. But the point your Honour raises is an important point because if the judgment for this component is provided to the plaintiff who receives it tax free, then one would ordinarily expect the defendant to get some countervailing adjustment, but Van Gervan is dead against us on that.
That is why we emphasise in our written submissions all these on-costs and all these extras that the defendant has to pay the plaintiff for which the plaintiff may be fully entitled to keep, without any tax paid on them, and he is never going to pay workers’ compensation or a lot of the other on-costs. So, what we are saying is, not only in logic but in policy, the line has to be drawn somewhere. To add this interest on it is taking the situation to lengths of such pragmatic difficulties for defendants that is unfair.
McHUGH J: But why would not the plaintiff be entitled to interest on the basis that he or she is being kept out of her damages.
MR NEIL: That is the only area where one can pick up some logical point, we would submit, is that point. Now, the answer to it, we would submit, is there has been already so much overloading in favour of the plaintiffs in the damages that are received that it has gone too far. That point would possibly enable the Gogic rate to be applied because you are only dealing with the aspect necessary for Gogic, as Justices Hill and Kiefel put it, trying to find the rate that allows for the difference between, say, a real rate of inflation, but, that would be as far as it would go.
Now, we have submitted in our submissions about rate that not even Gogic should be applied in order to bring an end to the continuation of what we submit of anomalies, and I am going to briefly refer to Kar’s Case in a moment. We would rely on Settree v Roberts, Burnicle v Cutelli, which is a judgment of Justice Glass with which the other judges agreed, Knight v Smith where basically it seems to have been said, true it is that this point is there but there has not been any payment out, there is money that has been paid that may never ever be paid out and in the circumstances it was reasonable not to grant interest. Hodges v Frost was the judgment in the ACT, a judgment of the Full Court of the Federal Court, which took the same view but without a great deal of argument.
Could I just deal with the point I was dealing with that Justice Kirby raised, there is also no problem with statutory caps because the Griffiths v Kerkemeyer damages would not affect the general damages component at common law and under the statutory scheme, such as in New South Wales under their section 72 of the Motor Accidents Act, they are set out as specific headings and although they have internal caps and thresholds they do not affect the general damages component.
GLEESON CJ: Let me suppose that the Griffiths v Kerkemeyer claim related to a closed period, in other words, the need for services of this kind only existed for one year. The case did not come on for trial for six years and when it comes on for trial, an element in the damages being awarded to the plaintiff is an amount related to the need for past services that existed and then came to an end five years ago. Why in those circumstances should not some account be taken of the fact that in the intervening four years, or whatever the case may be, the defendant has had the money and the plaintiff has not?
MR NEIL: Firstly, your Honour, if account were taken, it could be no more, as I say, than the Gogic rate, but if the amount of damages is to be awarded on the gross commercial rate as applied during the year - and the plaintiff, we simply say, if we could reargue Van Gervan, we would be saying is over‑compensated. We say because we cannot reargue Van Gervan, a way to avoid further over‑compensation is not to award interest.
McHUGH J: But given Van Gervan, is there not another important public policy aspect? The fact that you have to pay interest encourages settlement because you know you are not going to get an advantage out of having the money, so it encourages earlier settlements. When I was on the Court of Appeal of New South Wales, rightly or wrongly I formed the conclusion when interest rates were 22, 23 per cent that in big verdicts, insurance companies just put on an appeal so that they could keep the money. Again and again they withdrew appeals. They could make good use of the money, get 22, 23 per cent at the rate – the court rate was only about 10 or 12 per cent. You really needed apeal sum to encourage insurers not to appeal unless they had good grounds and you need interest rates to encourage them to settle cases.
MR NEIL: Your Honour, the interest rates in the court rates were increased to overcome that problem. We submit that the penalty rates would be quite wrong to be applied and, indeed, as I will show in a moment, Justice Madgwick himself did not apply the court rate. But there is more than enough incentive to settle cases by - where you are looking at the Griffiths v Kerkemeyer component – the fact that the defendants are going to have to pay a very substantial commercial cost with all the add‑ons. The longer that goes, the more incentive there is for them to settle.
HAYNE J: Can I go back and just test what may be the obvious point. What is the nature of the process that is being undertaken? Is one applying, in this context, section 69 of the ACT Act; is one computing damages at common law; what is the exercise that we are undertaking, or you say we ought to be undertaking in this context?
MR NEIL: Your Honour, what is being undertaken is that there is, on the authorities up to date, an entitlement to general damages interest at the Gogic rate regardless of the practice rates in the courts. So that although the matter gets its original heading of “interest” under section 69 in the ACT, the general principle, when one comes to general damages, is Gogic. What is being said here is that ‑ ‑ ‑
HAYNE J: But the reason for my inquiry is that on one view the purpose of section 69 is the penal purpose rather than the compensatory purpose.
MR NEIL: In this case it was never argued, as I understand it, that a penal rate should apply. What is being suggested is you take some guidance from these rates and work out a commercial rate.
HAYNE J: Well, it is the premise for that concession, or way in which the case has been presented rather on concession, that simply fusses me a moment and what do you say the premise for the debate is, that you are calculating damages, promoting settlement, some combination of the two?
MR NEIL: We say, your Honour, that the premise that damages were calculated and agreed for the Griffiths v Kerkemeyer component and the exercise is the determination of interest, if any, and, if there is to be any, whether it is to be the general damages rate under Gogic or something derived indirectly from Gogic as 2 per cent or the commercial rate. That is the way the case was conducted, but never a penalty rate and we, indeed, have made the point that the practice direction would include historically some penalty component. If I might just take the Court, for example, to the way in which - Justice Foster took G v K damages to be general damages, as seems to be clear in our law from Kars, Van Gervan, Gogic – well, perhaps not Gogic - Griffiths v Kerkemeyer. The problem then is if it is paid on ‑ or assessed on progressive rates, whether to go to commercial or stay with the Gogic rate. Settree v Roberts said no interest, in fact.
Justice Foster, in a very detailed judgment on the interest point, concluded eventually that although you could not directly apply Gogic, it was fair between the parties to indirectly apply it and take 2 per cent. Justices Hill and Kiefel ‑ ‑ ‑
GAUDRON J: 2 per cent being half the Gogic rate?
MR NEIL: The progressive rate of the 4 per cent, yes.
GAUDRON J: Yes.
MR NEIL: Justices Hill and Kiefel, in seeking to find what they thought should be the true rate, the difference between real and inflation, said Gogic is the right one to choose. Justice Madgwich, with whom Justice Mathews agreed, tried to find a rate that he thought was fair and reasonable but he did not set himself the task, nor did he seek to find, a commercial rate. In fact, at page 208 of the appeal book his Honour took the view that Marsland was in error in apply the commercial rate. His Honour said at page 208 line 20:
I do not understand Hill and Kiefel JJ to have any contrary view as a matter of principle. Their approach is that the evidence in this case does not permit a re‑assessment of the interest rate, there being “no evidence at all of changes in money value which could be adopted”. They sought guidance from certain Queensland cases. Those cases however, insofar as they have applied 4% (or, its derivative, 2%, for progressive loss), seem necessarily to have had the result that the plaintiffs did not get compensation, as in principle they should have, by way of interest for the two factors – inflation and being kept out of one’s money –
We would submit his Honour is quite wrong to include inflation in these. The only way you could do it is out of the money:
Such an approach is, in my respectful view, mistaken. It was not exhibited by the New South Wales Court of Appeal in Marsland v Andjelic (No2) (1993) 32 NSWLR 649 and Arvind & Kundo v Greco (1995) AustTortsR 81‑357. That Court simply applied a commercial rate. But that approach too, in my respectful view, is not entirely free from error: it overlooks the High Court’s point in Gogic that such an approach may either overcompensate a plaintiff because a plaintiff “arguably” may get the interest to be awarded tax‑free…..or may, in certain conditions undercompensate a plaintiff:
Then what his Honour did was to take the 12 per cent uncontested by the plaintiff as some guide, then the post-judgment debt rates and then, at the top of page 210, say those rates were “weighted average” at 15 per cent, but then took 30 per cent off for tax. Now, we would say there is a combination of errors and some good ideas in here, but he was searching for his own rate, not the commercial rate and then said:
In the result, in my view, 10% would not be inappropriate, having regard to these indicators, and it would therefore be reasonable to allow 5% for the progressive nature of the loss.
So his Honour was searching for a fair rate as between the parties. Paradoxically, what we have here in this case is an appeal which seeks 12 per cent, 6 per cent progressive, whereas even the minority only gave 10 per cent, 5 per cent progressive; and the majority gave 2 per cent, being progressive of 4 percent. So, we say the appeal should fail anyway because there is no evidence to support the 12 per cent, 6 per cent progressive. But what no one was seeking to do in that court was find a commercial rate because we submit a commercial rate would be quite the wrong rate. The only way one could apply something would be the out of the money point, and that is when we come to say, with respect, that one should not go further. One should stop and know even 2 per cent Gogic.
In Kars’ Case, Kars v Kars 187 CLR, page 354, that was the case where it was determined that if the tortfeasor was the carer, nonetheless, Griffiths v Kirkemeyer damages could be awarded. So it is not directly on point. I just wish to raise it because it deals with the history of Griffiths v Kirkemeyer damages in our law and at 368 point 4 commences a somewhat lengthy passage on “Damages for gratuitous services: an anomaly”, it goes through the history. At 369, point 7, it points in a pithy phrase, about a paragraph before the end:
It has been accepted as part of the common law when legislation has been adopted to modify or abolish this head of recovery. It is too late to go back.
Then, at page 382, point 6, after surveying all the features, the Court says in that case:
The result which is reached is not wholly satisfying. But a consideration of the conflicting opinions, judicial and academic, in Australia and England demonstrates why this is so. In the end, a choice must be made as to the least unsatisfactory solution to the problem.
The choice which we prefer reduces the anomalies and absurdities.
Now, what we want to submit to the Court is if we cannot reargue the over‑compensatory factors following from Van Gervan, we would say the Court should close the chapter and not open a new chapter of what we would submit is a possible anomaly or absurdity.
KIRBY J: You have repeatedly said you cannot reargue Van Gervan but is there some reason why you cannot, or do you simply accept that you do not do that in this case?
MR NEIL: Your Honour, I do not think how the issues were thrown up here we could have done that, and we have not done that on the appeals.
KIRBY J: You could not do it below because the courts below are bound by it, but this Court does hear arguments about rearguing points. I am not trying to induce you to do so because you have not done it so far, but you have repeatedly said you cannot do it. I just do not understand that you cannot but you elect not to. You ask us to go from there. Is that correct?
MR NEIL: We certainly have elected not to, your Honour, and the case was not conducted on a challenge to Van Gervan, even on a formal basis, and, indeed, Van Gervan might well withstand any such challenge, I do not know. What we do say is, once Van Gervan makes it clear ‑ ‑ ‑
KIRBY J: You say enough is enough.
MR NEIL: Yes, enough is enough. Once Van Gervan makes it clear you can have these damages, even if the need is never fulfilled, and if there are all sorts of extra – I do not want to use the word unreasonably – but possible windfalls to the plaintiff, then enough really is enough and to add in interest, even at the Gogic rate offends pragmatics and experience and the sensibilities of fairness in these circumstances and it should be reined in.
We rely on Settree v Roberts to overcome the logic point. We say they were logical, but if we are in territory where logic would otherwise compel a decision we say, in our written submissions and here, that something has to be done about it. It is a common law position in the ACT. There has not been intervention from the ACT of a statutory nature. The law should be allowed to stand in the ACT, and Hodges v Frost, which for years has operated, we would expect, in the ACT ‑ ‑ ‑
GUMMOW J: When you say it is common law, is that quite right? Does there not have to be some statutory root for the interest?
MR NEIL: I am sorry. I meant for the damages, your Honour.
GUMMOW J: I see.
MR NEIL: Hodges v Frost, as we understand it, until this case, has applied in the common law position in the ACT, albeit you have your practice direction.
KIRBY J: That held that interest was not recoverable. Zero.
MR NEIL: On the Griffiths v Kerkemeyer component.
KIRBY J: Zero. Not Gogic, not nothing.
MR NEIL: None, your Honour. That is so. So we would submit we are not being unreasonable or illogical to rely on cases such as Hodges, Settree v Roberts, Knight v Smith, Burnicle v Cutelli, which were considered judgments, the unreported judgment of some single judges in Queensland which we provided, one of which said that the judge would not follow a Full Court decision of theirs granting interest and granted no interest on the basis that since Van Gervan there had been a change to the basic position. We would ask this Court to adopt that position.
The only small area of being out of your money sounds logically compelling. It would only allow the 2 per cent progressive but, in our submission, is no longer warranted because the position has got out of hand.
GAUDRON J: You see, I do not follow that, Mr Neil. The position got out of hand – I mean, really that is an attack on Van Gervan, is it not, which is not in issue, which you cannot challenge, which you never challenged, and which is not self-evidently wrong, and you just make these global statements – it is all out of hand, over compensation.
MR NEIL: Your Honour, I would withdraw the phrase “out of hand”. I would submit that where a plaintiff is not under obligation to disperse the money, that the authorities that did not allow interest for that and allied reasons, were sound. That where Van Gervan ‑ ‑ ‑
HAYNE J: I thought those were common law authorities, were they not?
MR NEIL: They were, your Honour. But in each case there would have been ‑ ‑ ‑
HAYNE J: At some point in this you have to come back to section 69 and the words “unless good cause is shown to the contrary”.
MR NEIL: Your Honour, as I would understand it, even under those common law cases where there is always some umbrella of a practice direction and the way this case is being conducted, it was never argued that the practice direction automatically ruled this situation; that the Court should seek some principle or some pragmatic answer to what was a fair regime, either of no interest, or what was a fair rate to be applied between parties in these situations. We would submit that is reasonable and the Court we ask to accept no interest or the Gogic rate, but we would submit nobody has mounted a case here and, in the other cases, the practice rates were not applied. We would submit that it is similar to the situation, perhaps in England, that we have made note of some cases in our list where it is said it is for the appeal court to lay down some guidelines for the courts to follow as to what is a fair rate in assessing the interest or if there is to be any interest.
But I am not here, your Honours, to attack Van Gervan in a cavalier way. We draw attention, in our submissions, to aspects of the damages which the plaintiff receives which are over and above, in many circumstances, that plaintiff’s own requirements and where there is no economic loss to him, particularly where he either has not had the need fulfilled or where it would not be expected that he would have to expend all or the entirety, or even part of the money, which he receives as part of the judgment. So we would in fact pick up the fact of the regime that is mandated by Van Gervan as indicative of, without wishing to cause a difficulty, a pragmatic over-compensation.
GUMMOW J: Someone is going to have to explain to me how section 69 works in all of this. It has to be a statutory route, does it not? Was there a statutory route in Gogic?
MR NEIL: I am sorry, your Honour?
GUMMOW J: Was there a statutory rule in Gogic, a statutory route for it.
McHUGH J: There was a section in the South Australian Consolidation Act.
GUMMOW J: We are engaged in a process of statutory interpretation. We are construing section 69 of the Supreme Court Act of the ACT.
GLEESON CJ: It is the words “as the court thinks fit”, is it not?
MR NEIL: Yes, your Honour. The way the Full Court ‑ ‑ ‑
GUMMOW J: The common law bar will never look at statutes. I do not know why. It is a starting point, section 69.
MR NEIL: Yes, your Honour. As we understand the position, the umbrella in the starting point is section 69. It is a question of what the court thinks fit. The issue that arose in this case was whether the court should think it fit to apply any and then, as it turned out, whether, if there were any, the Gogic or the commercial rate.
GLEESON CJ: But what primarily makes it fitting to award interest in respect of a situation like this, to go back to the example of the closed period, is that at the end of the closed period, according to Griffiths v Kerkemeyer, the plaintiff could say to the defendant, “You owe me X dollars which is the amount for the closed period”. Then when the case comes on for trial in six years time the plaintiff can say, “You owed me that X dollars five years ago and the court ought to think fit to give me X dollars plus interest”. In fixing the rate of interest, the court takes into account the following considerations.
MR NEIL: Well, your Honour, I have sought to ‑ ‑ ‑
GLEESON CJ: That is the way the statute operates, is it not?
MR NEIL: Yes, but I have sought to put that the courts have, particularly in Gogic, taken the task of stating what in certain classes of cases should be the fit rate to apply throughout Australia.
HAYNE J: Against the function of an award of interest identified in Gogic at page 663 as being to compensate a plaintiff for loss or detriment he or she has suffered by being kept out of his or her money. That is the purpose identified there by the whole Court for the award of interest, and the money out of which you are kept is the damages. Whether the damages are, as you would have it, too large or over‑generous or contain elements that are of doubtful validity, why is that to the point? If the point is you are entitled to damages and you are kept out of that money, does it not follow from Gogic that a rate must be struck that will compensate you appropriately for being kept out?
MR NEIL: If your Honours do not accept the broad submission I make, then that follows.
GUMMOW J: What is a broad submission, Mr Neil?
MR NEIL: That there is an element in the damages already that provides to a plaintiff more than he may actually need to use, or will use.
GUMMOW J: Are you saying that supplies good cause within the meaning of section 69(1) – will always supply good cause?
MR NEIL: Yes, your Honour.
GUMMOW J: Right.
MR NEIL: If it is not to be held that it is good cause, then we would submit that the appropriate rate is the Gogic rate, for the reasons of the majority, and we rely on the minority judgments of Justices Madgwick and Mathews for the point that they recognise that the commercial rate would not be appropriate. So the task is what rate to find, and we would submit it would only be reasonable, as our alternative argument, to come back to the Gogic rate which applies to general damages.
GUMMOW J: The idea is, is it, that the Court should think fit by, as a matter of practice, fixing upon one rate regardless of the circumstances of the particular case? Is that the way the section works?
MR NEIL: We would submit your Honours could indicate that the general rule should be the Gogic rate. There may always ‑ ‑ ‑
GUMMOW J: A conventional rate.
MR NEIL: A conventional rate. There may always be special exceptions that need to be addressed by the judge in the individual case. It is similar to the rate in - even Griffiths v Kerkemeyer itself, and Van Gervan talk about there may be very special exceptional situations which need to be accounted for. But the general rule was laid down.
As far as the particular appeal is concerned, your Honours, we would submit that there is an additional reason, that is there is no evidentiary basis for the application of 12 per cent, that is 6 per cent progressive as sought in the appeal and that the most that should occur would be that the Gogic rate in this case would stand if our first submission is not accepted because all the judges in the Full Court of the Federal Court were seeking to find an answer to the problem without sending it back for further evidence.
GUMMOW J: Without mentioning section 69?
MR NEIL: Perhaps that may be also the – yes, your Honour.
GUMMOW J: Yes. I have read pages and pages of judgment thinking there must be some statutory route.
MR NEIL: I think it is a feature of the way the matter was conducted, your Honour.
GUMMOW J: It is a good idea to start with the statute, it seems to me. Any how - - -
MR NEIL: As is pointed out in the judgments, at the level at the Full Court of the Federal Court all the parties asked the court to do its best to fix a rate in the particular case in the evidentiary shortage and the rate of the majority was the Gogic 2 per cent progressive rate.
HAYNE J: Why would any evidentiary shortage fall at the door of the plaintiff in the suit? Given the way the section is cast, is it for the plaintiff to demonstrate the appropriate rate or is it for the defendant to deny what might be called the practice rate?
MR NEIL: We would submit, in light of the way the case was conducted, it was for the plaintiff to show some rate other than the practice rate because it was not the rate that was, as I understand it, ever said to apply automatically, but even if it be the other way, we would submit, as things have turned out, in the alternative, the rate that has been found, namely the Gogic rate, is the rate that should apply because it has some reasons supporting it that are set out and it can be applied without having to try and find a special appropriate rate as Justice Madgwick sought to do but what is not available – and we are not asking for a commercial rate. What is not available on the evidence is a commercial rate.
We would accept that if the view is that the interest follows and should be applied logically because of being kept out of money then the authorities, in our submission, show that the Gogic rate is the way to deal with that aspect, without incorporating an inflationary component or commercial components which of course would apply if the care had been paid. A commercial rate probably would apply where there had been – it would be similar to past economic loss and at common law would attract the same principles and under the statutory schemes would be treated the same as past economic loss.
HAYNE J: Was the case conducted below on the basis that the practice direction contained what could be properly taken to be commercial rates prevailing at the dates given?
MR NEIL: Well, your Honours, I do not know about the trial. I was not at the trial. I think the real issue ended up coming up at the level of the Full Court of the Federal Court. As I recall it, this issue on interest came up at the level of the Full Court of the Federal Court. The position we were taking was the practice rate should not be applied. It was inappropriate, would contain some penalty provision and I think it may be correct to say that at the level Mr Morris argued for the practice rate or some variation to the 12 per cent.
Well, my friend says he argued for the practice rate or the commercial rate. Issue was certainly drawn on the fact that the practice rate should not be the rate and then the court appears to have dealt with the matter on the basis of Gogic or some rate that might be reasonable in the circumstances. But we would submit, your Honours, that to simply apply
the practice rate would not be the right result and nor the commercial rate, if one can find one.
GAUDRON J: Nobody takes the point that the Gogic rate is now fairly generous compared to the situation when it was set.
MR NEIL: Your Honours, that particular point has not been taken. I would ‑ ‑ ‑
McHUGH J: Well, it was set for the long period because if you attempt to assess the true real rate of interest you might find out that there was a negative real rate in certain times and in other times the plaintiff might be overcompensated and the court said it was rough and ready and arbitrary.
MR NEIL: But presumably it is a long‑term rate that in an appropriate case someone might challenge and, if the Court though there had been a sea change of some great significance, it may be varied but we have not raised that point, your Honour. If it please the Court.
GLEESON CJ: Thank you, Mr Neil. Yes, Mr Morris.
MR MORRIS: Your Honour, at page 161 of the appeal book there is an observation in the judgment of Mr Justice Higgins, a dissenting judgment, that:
The plaintiff’s calculation was not challenged as being appropriate if interest was to be so allowed. The sum referred to up to trial as $233,190.00.
That situation changed in the Full Federal Court where it was argued that 12 per cent – there was confusion, at least in my mind I confess, as to whether the practice note was the commercial rate of interest.
So that the case was conducted upon the footing that in fact there were two applicable rates of interest, the commercial rate being assumed to be higher than the court rate for pre-judgment interest, which was the practice note parasitic upon section 69, and an endeavour to reach a moderate method of approach to the problem, we submitted 12 per cent would be an – was the figure we contended for, if your Honour follows me. Whereas, in fact, with the wisdom of hindsight, a case could have been made, but was not – I did not put this case – could have been made that the whole question was solved by the application of section 69 and the practice note, without making the concession of 12 per cent. That was not how it was conducted ‑ ‑ ‑
KIRBY J: But is this a matter, it being, in a sense, an application of section 69 of an Act, is this a matter on which different evidence might have been called? I suppose it ‑ ‑ ‑
MR MORRIS: Well, the case was not conducted on the footing that we were seeking an award, unless cause was shown, that because of the mandate in 69 ‑ ‑ ‑
KIRBY J: Yes, but you and the respondent were bound by the Act. That was the law of the land and if they do not choose to call evidence then that is your good fortune, is it not? The fact that you have not raised it or asserted it is not to the point. Or am I missing something?
MR MORRIS: No, that is so, your Honour, but I am endeavouring to tell your Honours what, in fact, happened historically.
KIRBY J: You are being your usual very candid self.
MR MORRIS: But not abandoning my opportunity. That is what happened. It was not recognised when the trial was conducted because we were beguiled by Van Gervan v Fenton and the reference to commercial rates, that, in fact, probably statutorily the correct position was the application of 69 and the practice note, which encapsulated what was to be done with section 69 if cause was not shown.
KIRBY J: But I am asking you the technical question as to whether, no one having noted it and the fact that you did not, as it were, advance an argument at the end of evidence relating to it, the fact that it was not raised prevents your now relying on it, given that had it been specifically raised to everybody’s attention, the respondent might well have sought to show contrary cause. Or are you entitled to say, “That is the law. They have not shown contrary cause and this is a matter that could have been altered by evidence but that is their bad lookout for not having noticed the provisions of the Act.”
MR MORRIS: I would make that submission, your Honour.
HAYNE J: Or would it not then encounter the fact that the practice note is interesting, but has no statutory force?
MR MORRIS: Your Honour, it was accepted as being interesting to the extent that it was accepted in evidence as an exhibit and was indicative of what the court rate was.
GLEESON CJ: But a practice note is simply information to the profession as to what judges will do in the ordinary case, is it not? It is a description of the practice of the court.
MR MORRIS: Unless cause is shown, that is true. But we adapted ourselves to that position by taking a more conservative view and advancing an argument or contending for 12 per cent.
GLEESON CJ: I do not know what the position is in the Supreme Court of the ACT, but in other Supreme Courts, the interest rates are governed by the rules.
MR MORRIS: Might I seek some instructions on that, because I do not know, your Honour, I cannot answer that.
HAYNE J: The Victorian position is governed by the declarations made under the Penalty Interest Act which is an avowedly penal rate.
MR MORRIS: I am sorry, your Honour, we cannot answer that. It may be that there is a rule applicable, and I regret not being able to answer the question.
GLEESON CJ: Thank you, Mr Morris.
MR MORRIS: Thank you, your Honour.
GLEESON CJ: We will reserve our decision in this matter, and we will adjourn until 10.15 tomorrow morning.
AT 3.05 PM THE MATTER WAS ADJOURNED
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