Kalenik v Apostolidis (No 2) - [2009] VSC 410

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 7588 of 2000

ZORICA KALENIK	Plaintiff
v
JOHN IOANNIS APOSTOLIDIS & ORS	Defendants

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JUDGE:	HARGRAVE J
WHERE HELD:	Melbourne
DATE OF HEARING:	28 and 30 July, 12 August 2009
DATE OF JUDGMENT:	17 September 2009
CASE MAY BE CITED AS:	Kalenik v Apostolidis (No 2)
MEDIUM NEUTRAL CITATION:	[2009] VSC 410

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INTEREST – Delay by plaintiff in prosecuting case – Whether deliberate delay arising from plaintiff’s impecuniosity – Failure of defendant to discover critical documents – Whether good cause shown to limit period of statutory interest – Whether penalty interest rate or a lesser rate should apply – Interest awarded for the whole period since issue of the writ at penalty rate – Supreme Court Act 1986 (Vic) s 60; Penalty Interest Rates Act 1983 (Vic) s 2.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr C Gunst QC with Mr R Edmunds	Leo Dimos & Associates
For the Defendants	Mr S Wilson QC with Dr D Kovacs	David Tonkin & Associates

TABLE OF CONTENTS

Introduction ........................................................................................................................................ 2

Should interest run for the whole period since issue of the writ?........................................... 4

Was there unnecessary and deliberate delay by the plaintiff?................................................ 8
Delay in obtaining file of plaintiff’s previous solicitors.......................................................... 18
Delay arising from defendant’s application to restrain plaintiff’s solicitors from acting.. 20
Conclusion: interest should run for the whole period............................................................ 21

What rate of interest should be applied?.................................................................................... 21

Summary and conclusions............................................................................................................. 24

HIS HONOUR:

Introduction

On 29 May 2009, the Court published reasons for judgment (‘principal reasons’).[1] In the principal reasons, it was determined that the plaintiff was entitled to an adjustment order under Part IX of the Property Law Act 1958 (Vic) (‘adjustment order’). The adjustment order was based upon a valuation of the assets of the parties at the date they separated in March 2000 (‘separation date’). When made, the adjustment order will require the first defendant to pay the plaintiff the sum of $500,000. For convenience, I will refer to the first defendant as ‘the defendant’.
[1]Kalenik v Apostolidis [2009] VSC 208.

During the interlocutory stages of the trial, the plaintiff had contended that it was open to the Court to base any adjustment order upon a valuation of the assets of the parties at the date of judgment. To this end, the plaintiff pursued many discovery applications to obtain up‑to‑date financial information concerning the assets of the defendant, in particular his business assets. Prior to the commencement of the trial, however, the parties agreed that any adjustment order would be based upon the Court’s valuation of the assets of the parties at the separation date.

Obviously, if the issue of the date at which the assets of the parties were to be valued remained unresolved, the duration of the trial would have been extended. In the absence of agreement, the parties would have needed to call evidence and make submissions concerning asset valuations at both the separation…

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: [2009] VSC 410
Decision Date: 17 September 2009

CaseChat Overview and Summary

In Kalenik v Apostolidis, the dispute involved a claim for damages for breach of contract, which was delayed by the plaintiff due to financial difficulties. The case was heard in the Supreme Court of Victoria. The plaintiff, Kalenik, sought interest on the damages awarded from the date the writ was issued, while the defendant, Apostolidis, argued that the statutory interest should be limited due to the plaintiff’s delay and their own failure to discover critical documents in time. The court had to decide whether the delay was deliberate and whether good cause existed to limit the period for which interest was awarded, as well as whether the penalty interest rate or a lesser rate should apply.

The legal issues at the heart of the case centred on the interpretation and application of the Supreme Court Act 1986 (Vic) section 60 and the Penalty Interest Rates Act 1983 (Vic) section 2. Specifically, the court needed to determine whether the plaintiff's delay in prosecuting the case constituted deliberate delay and whether it arose from the plaintiff’s impecuniosity. Additionally, the court had to assess whether the defendant had shown good cause for their failure to discover critical documents and whether these circumstances warranted limiting the period for which interest should be awarded. Finally, the court considered whether the penalty interest rate or a lesser rate should apply under the circumstances.

The court held that the delay by the plaintiff was not deliberate and did not arise from impecuniosity, but rather from genuine financial difficulties. The court also found that the defendant had not shown good cause for their failure to discover critical documents. Consequently, the court awarded interest for the whole period since the issue of the writ at the penalty rate, as provided under the Supreme Court Act 1986 (Vic) section 60 and the Penalty Interest Rates Act 1983 (Vic) section 2. This decision underscored the importance of the court’s discretion in determining the appropriate rate of interest in cases involving delay and discovery issues.

The final orders of the court were that interest should be awarded from the date of the writ at the penalty rate, reflecting the court's conclusion on the matters of delay, discovery, and the applicable interest rate.

Orders