Maestrale v Aspite (No 2)

[2014] NSWCA 302

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Maestrale v Aspite (No 2) [2014] NSWCA 302

Hearing dates:

On the papers

Decision date:

03 September 2014

Before:

Beazley P;
Macfarlan JA;
Barrett JA

Decision:

1. Vary order (2) made on 6 June 2014, with effect from that date, to read:

Set aside the award of damages made by her Honour and in lieu thereof order that the respondents pay to the appellant damages in the sum of $273,298.00 together with pre-judgment interest in the sum of $120,631.12, so that the judgment sum payable to the appellant is $393,929.12.

2. The respondents to pay to the appellant:

(a) If all monies owing by the respondents are paid to the appellant pursuant to these orders within 28 days, post-judgment interest in the sum of $15,358.26; or

(b) Otherwise, post-judgment interest on the amount of the judgment sum as is from time to time unpaid, calculated in accordance with the Civil Procedure Act 2005, s 101.

3. The appellant to pay the respondents' costs of the parties' further submissions on the calculation of interest.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

INTEREST - pre-judgment interest - Civil Procedure Act 2005, s 100(1) - calculation of interest - date from which pre-judgment interest should run

INTEREST - post-judgment interest - Civil Procedure Act 2005, s 101 - calculation of interest - date to which post-judgment interest should run

Legislation Cited:

Civil Procedure Act 2005
Supreme Court Act 1970
Uniform Civil Procedure Rules 2005

Cases Cited:

Coulton v Holcombe [1986] HCA 33; 162 CLR 1
Nu Line Construction Group Pty Ltd v Fowler (No 3) [2014] NSWCA 229

Texts Cited:

Supreme Court Practice Note 16 (16 June 2010)

Category:

Consequential orders

Parties:

Aldo Maestrale (Appellant)
Dante Aspite (First Respondent)
Bartholomew Rando (Second Respondent)

Representation:

Counsel:
C T Barry QC; J Rowe (Appellant)
G A Sirtes; J Downing (Respondents)
Solicitors:
MMD Law (Appellant)
HWL Ebsworth Lawyers (Respondents)

File Number(s):

CA 2013/31938

 Decision under appeal 

Jurisdiction:

9111

Citation:

Maestrale v Aspite [2012] NSWSC 1420; Maestrale v Aspite (No 2) [2012] NSWSC 1421

Before:

Fullerton J

File Number(s):

2008/289388

Judgment

1. THE COURT: On 6 June 2014, the principal judgment in this matter was delivered by the Court: Maestrale v Aspite [2014] NSWCA 182. The Court ordered that the award of damages made by the primary judge be set aside and that the respondents pay the appellant damages in the sum of $273,298 together with interest calculated in accordance with Supreme Court Practice Note 16 (16 June 2010). The Court directed the parties to file short minutes of order to reflect the judgment sum to which the appellant is entitled including interest.

1. On 23 July 2014, the parties filed written submissions indicating that they were unable to agree on the calculation of interest. That calculation involves four variables: (a) the capital sum or sums; (b) the rate of interest; (c) the date from which interest runs; and (d) the end of the period: Nu Line Construction Group Pty Ltd v Fowler (No 3) [2014] NSWCA 229. The only dispute between the parties relates to the date from which pre-judgment interest should run. The appellant contended that the appropriate date was 15 November 2002, whereas the respondents contended for 8 November 2007. The date chosen creates a $132,139.56 difference in the total amounts of pre-judgment interest calculated by each party. Their respective reasons for nominating these dates are outlined below.

Appellant's submissions

1. The appellant submitted that 15 November 2002 was the appropriate date from which pre-judgment interest should run on the basis that it was the date at which probate of Mr Maestrale Snr's will would have been granted to the appellant but for the respondents' negligence. This contention was supported by an affidavit sworn on 23 July 2014 by John Poole, a solicitor at Maurice Buckley C T Poole & Son and an accredited specialist in the area of Wills and Estates, who gave his opinion that it would take a competent lawyer a maximum of six to eight weeks to obtain a grant of probate from the Supreme Court after obtaining instructions. This affidavit was not before either the trial judge or this Court during the hearing of the appeal, and the appellant only now seeks leave to read it into evidence.

1. The appellant submitted that 15 November 2002 was the correct date in legal principle for two reasons. First, as was stated in the principal judgment for this matter, at [133], the function of an award for pre-judgment interest is to compensate a plaintiff for the loss that he or she has suffered by being "kept out of his or her money". As a matter of fact, the appellant submitted that he would have had access to the money under the will (assuming it to be the judgment amount) on the date of probate. Secondly, the appellant submitted that the date of probate was the time at which his cause of action in negligence arose, being the time at which he suffered loss.

Respondents' submissions

1. The respondents contended that 8 November 2007 was the appropriate date from which pre-judgment interest should run, being the date upon which the appellant drew down on a loan he took out in order to pay out the bequests due to his siblings. They submitted that this date conformed to the trial judge's method of calculating damages, at [110], by taking the relevant loss as "what the plaintiff has in fact had to pay out to retain the family home" compared to "what he would have had to pay out but for the solicitor's breach". This approach to the calculation of damages was not challenged on the appeal: [2014] NSWCA 182 at [108].

1. The respondents also resisted the appellant's contended date of 15 November 2002 on other grounds. In his further amended statement of claim, dated 18 April 2012, the appellant claimed interest only from 8 November 2007. The respondents submitted that this should be treated as an election from which the appellant should not now be permitted to depart. The Court also notes that there was a further inconsistency in the appellant's position, as in his supplementary submissions to this Court prior to the delivery of the primary judgment, the appellant claimed that interest should have been awarded from 11 December 2007.

1. The respondents objected to Mr Poole's affidavit evidence as to when probate would be granted. Mr Poole's affidavit provided the only evidence of when probate would be granted such as to support the date contended for by the appellant. They respondents submitted that the admission of further evidence was confined by the Supreme Court Act 1970, s 75A(8), which provides that in an appeal to this Court from a judgment after a trial or hearing on the merits, the Court "shall not receive further evidence except on special grounds". The respondents submitted that the appellant had advanced no argument as to why such special grounds exist.

Consideration

1. The Civil Procedure Act 2005, s 100(1)(b) provides that interest is to be calculated "for the whole or any part of the period from the time the cause of action arose until the time the judgment takes effect". The time at which the cause of action arises will often provide an appropriate date from which interest should run, as it is on that date that the successful party is taken to have had a legal entitlement to the judgment sum and is therefore kept out of their money in the relevant sense. However, the facts of the particular case may indicate that pre-judgment interest should be calculated from some later date. In this case, there is a question as to whether the appellant was "kept out" of his money, and therefore ought to be awarded compensation by way of interest, from the period between 15 November 2002 and 8 November 2007.

1. Although Mr Maestrale Snr died on 15 July 2002, the appellant did not apply for probate of the existing will until 2006, after a protracted legal dispute with the appellant's sister Rosetta because of his refusal to supply a copy of his father's existing will to her or her lawyers. The appellant did not pay his sisters their entitlements of $273,000 each under the existing will until November 2007, and also continued to live in the family home with his brother John for most of that time. Therefore, the appellant's financial loss only crystallised on 8 November 2007. He had full use of the money that he did not have to pay to the other beneficiaries prior to that date.

1. Pre-judgment interest should, therefore, run from 8 November 2007. This makes it unnecessary to resolve whether special leave ought to be granted to admit the affidavit evidence of Mr Poole.

1. Pre-judgment interest should run until 22 November 2012, being the date on which the order of the trial judge was made. Calculated at the rates specified in the Supreme Court's Practice Note 16 (16 June 2010), pre-judgment interest amounts to $120,631.12. The judgment sum, including pre-judgment interest and excluding post-judgment interest, is therefore $393,929.12.

Post-judgment interest

1. The respondents paid the original award of damages made by the trial judge to the appellant within 28 days. Post-judgment interest should therefore only be calculated on $111,297.31, being the additional amount awarded by this Court: see Civil Procedure Act, s 101(1) and (3).

1. Post-judgment interest ordinarily runs until the date when the amount owing on the judgment sum is paid to the successful party, "[u]nless the court orders otherwise": Civil Procedure Act, s 101(1). The respondents submit that 20 June 2014 is a more appropriate date to which post-judgment interest should run, being two weeks after this Court handed down its principal judgment. For the reasons provided below, the Court is of the opinion that that date should be adopted.

1. Although the sum of $111,297.31 has not been paid as at the date of this judgment, the delay has been caused by the inability of the parties to agree between themselves as to the amount of pre-judgment interest, resulting in the need for this Court to determine the matter. The failure to reach agreement has been caused by the dispute as to the date from which pre-judgment interest should run. In these circumstances, the question arises whether the respondents ought to pay post-judgment interest over the period when the reason for non-payment of the balance of the judgment sum was that determination of the final judgment sum was pending.

1. The answer to that question must be informed by the purpose of the award of post-judgment interest. As with pre-judgment interest, the award reflects that a successful party has been kept out of their money over the relevant period. However, the prescribed rate of post-judgment interest is set at 6 per cent above the cash rate: Uniform Civil Procedure Rules 2005 (UCPR), r 36.7, which is higher than the conventional rate for pre-judgment interest. This rate reflects that post-judgment interest is also intended to provide a disincentive to unsuccessful parties to delay payment of a judgment sum.

1. The respondents informed the Court that the appellant changed his position in relation to the calculation of pre-judgment interest subsequent to the principal judgment being delivered on 6 June 2014 (see [6] above), and only communicated that change in position to the respondents on 8 July 2014. The respondents submit that this late change in position was unreasonable. The respondents contend that had the appellant acted reasonably, the final judgment sum including interest would have been agreed between them within two weeks of the primary judgment being delivered, that is, by 20 June 2014.

1. In the Court's opinion, the appellant was not precluded by election from changing the date from which he submitted pre-judgment interest should be calculated. The Court may confine a party to the case run at trial: Coulton v Holcombe [1986] HCA 33; 162 CLR 1. However, the question of the date from which pre-judgment interest was to be calculated was not in issue at the trial. Nonetheless, the appellant's late change in position did delay the determination of the final judgment sum. Moreover, he has been unsuccessful in persuading the Court to adopt his nominated date. In our view, when the delay in the payment was the result of the appellant changing his position in a significant way, and that change led to a disagreement between the parties that has now been resolved in favour of the respondents, the respondents should not be required to bear the financial disadvantage entailed by an award of post-judgment interest.

1. The Court accordingly considers that the date suggested by the respondents as the appropriate date to which post-judgment interest should run, namely 20 June 2014, is reasonable, provided that the respondents pay all monies owing to the appellant pursuant to the Court's judgment and orders within 28 days of these orders. In this regard, the Court notes that the respondents' position is that they will pay the balance of the judgment sum within 28 days of the Court's order. Post-judgment interest, calculated from the date of judgment to 20 June 2014 and at the rates specified in UCPR, r 36.7, is $15,358.26.

1. The Schedule annexed to this judgment sets out the calculations discussed in this judgment.

1. The Court makes the following orders:

1. Vary order (2) made on 6 June 2014, with effect from that date, to read:

Set aside the award of damages made by her Honour and in lieu thereof order that the respondents pay to the appellant damages in the sum of $273,298.00 together with pre-judgment interest in the sum of $120,631.12, so that the judgment sum payable to the appellant is $393,929.12.

2. The respondents to pay to the appellant:

(a) If all monies owing by the respondents are paid to the appellant pursuant to these orders within 28 days, post-judgment interest in the sum of $15,358.26; or

(b) Otherwise, post-judgment interest on the amount of the judgment sum as is from time to time unpaid, calculated in accordance with the Civil Procedure Act 2005, s 101.

3. The appellant to pay the respondents' costs of the parties' further submissions on the calculation of interest.

**********

Schedule: pre and post-judgment interest

Interest up to judgment

Capital amount	From	To	Days	Rate	Interest
$273,298.00	8/11/2007	31/12/2007	54	10.25%	$4,144.40
$273,298.00	1/01/2008	30/06/2008	182	10.75%	$14,649.52
$273,298.00	1/07/2008	31/12/2008	184	11.25%	$15,499.37
$273,298.00	1/01/2009	30/06/2009	181	8.25%	$11,180.88
$273,298.00	1/07/2009	31/12/2009	184	7.00%	$9,644.05
$273,298.00	1/01/2010	30/06/2010	181	7.75%	$10,503.25
$273,298.00	1/07/2010	31/12/2010	184	8.50%	$11,710.63
$273,298.00	1/01/2011	30/06/2011	181	8.75%	$11,858.51
$273,298.00	1/07/2011	31/12/2011	184	8.75%	$12,055.06
$273,298.00	1/01/2012	30/06/2012	182	8.25%	$11,242.66
$273,298.00	1/07/2012	22/11/2012	145	7.50%	$8,142.78
Total pre-judgment		$120,631.12
Plus award of damages		$273,298.00
Judgment		$393,929.12
Less paid in 28 days		($282,631.81)
$111,297.31

Interest post judgment

Capital amount	From	To	Days	Rate	Total
$111,297.31	23/11/2012	31/12/2012	39	9.50%	$1,129.74
$111,297.31	1/01/2013	30/06/2013	180	9.00%	$4,939.77
$111,297.31	1/07/2013	31/12/2013	183	8.75%	$4,882.60
$111,297.31	1/01/2014	20/06/2014	170	8.50%	$4,406.15
Total	$15,358.26
Total judgment		$409.287.38

Decision last updated: 03 September 2014