McConnell Dowell Middle East LLC v Royal & Sun Alliance Insurance plc (No 3) - [2009] VSC 94

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 5641 of 2003

McCONNELL DOWELL MIDDLE EAST LLC	Plaintiff
v
ROYAL & SUN ALLIANCE INSURANCE PLC	Defendant

---

JUDGE:	HANSEN J
WHERE HELD:	Melbourne
DATE OF JUDGMENT:	27 March 2009
CASE MAY BE CITED AS:	McConnell Dowell Middle East LLC v Royal & Sun Alliance Insurance Plc (No 3)
MEDIUM NEUTRAL CITATION:	[2009] VSC 94

---

INTEREST – Defendant liable to pay amounts under insurance contract – Court reserved decision on interest – Defendant paid amounts under insurance contract – Court subsequently decided that interest payable under s 57 of Insurance Contracts Act 1984 (Cth) – Discussion as to date on which judgment for s 57 interest was given – Application of s 57 after amounts under insurance contract paid – Whether interest accrued on unpaid s 57 interest pursuant to s 101(1) of Supreme Court Act 1986 – Date from which interest accrued.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J J Gleeson SC and Mr J J Whelen	Deacons
For the Defendant	Mr C M Caleo SC and Mr A P Young	DLA Phillips Fox

HIS HONOUR:

These reasons deal with the one remaining issue between the parties, namely whether the interest payable by the defendant under s 57 of the Insurance Contracts Act 1984 (Cth) carries interest under s 101(1) of the Supreme Court Act 1986, and if so from what date. The parties agree that the quantum of unpaid s 57 interest is US$1,866,804.27 and A$11,824.23.

The background to the issue is as follows. On 25 November 2008 I gave judgment[1] and on 28 November ordered the defendant to pay to the plaintiff within 21 days the amount of US$3,319,145.50 on the claim in respect of the plant and equipment, and the amount of A$27,296.03 on the claim in respect of professional fees. Interest and costs remained in dispute so I adjourned the hearing to allow the parties to file written submissions on those issues, following which counsel made oral submissions on 11 December 2008, and I reserved my decision thereon.
[1][2008] VSC 501.

On 19 December 2008 the defendant paid to the plaintiff the judgment amounts but no amount for interest. On 20 February 2009 I handed down my decision on interest and costs[2], concluding that the defendant was obliged to pay interest under s 57 of the Insurance Contracts Act as from 1 January 2002 on the amount of US$3,319,145.50 on the claim in respect of the plant and equipment, and as from 9 January 2004 on the amount of A$27,296.03 on the claim in respect of professional fees. I pronounced orders to that effect.
[2][2009] VSC 49.

Shortly after the conclusion of the 20 February hearing, on the same day, it became apparent that my reasons for decision on interest and costs, and the orders I had pronounced that morning, needed to be revised because they referred to a single start date…

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.

Continue reading McConnell Dowell Middle East LLC v Royal & Sun Alliance Insu...

Details

AGLC: McConnell Dowell Middle East LLC v Royal & Sun Alliance Insurance plc (No 3) [2009] VSC 94
Case: [2009] VSC 94
Decision Date: 27 March 2009

CaseChat Overview and Summary

McConnell Dowell Middle East LLC brought an action against Royal & Sun Alliance Insurance plc, seeking compensation under an insurance contract and interest under section 57 of the Insurance Contracts Act 1984 (Cth). The case was heard by the Federal Court of Australia, where the dispute primarily revolved around the calculation and payment of interest on the amounts owed under the insurance contract. The court was tasked with determining whether the insurer, Royal & Sun Alliance, was liable for interest under section 57 of the Insurance Contracts Act 1984 (Cth), and if so, the date from which such interest would accrue. The court also had to decide whether interest would accrue on the unpaid section 57 interest under section 101(1) of the Supreme Court Act 1986.

The primary legal issues before the court were whether Royal & Sun Alliance was liable to pay interest under section 57 of the Insurance Contracts Act 1984 (Cth) and, if so, the applicable rate and the date from which this interest would accrue. Additionally, the court had to determine whether interest would accrue on any unpaid section 57 interest under section 101(1) of the Supreme Court Act 1986. The court had to consider the legislative intent behind section 57 of the Insurance Contracts Act 1984 (Cth) and the application of section 101(1) of the Supreme Court Act 1986 in the context of insurance contract disputes. The court needed to examine the relevant statutory provisions, case law, and any applicable legislative history to arrive at a reasoned decision.

The Federal Court of Australia held that Royal & Sun Alliance was liable to pay interest under section 57 of the Insurance Contracts Act 1984 (Cth), and the interest was to accrue from the date of the judgment. The court found that the date on which the judgment for section 57 interest was given was the relevant starting point for calculating the interest, as per the statutory provisions. The court noted that the insurer had already paid the amounts under the insurance contract, and the issue of interest on unpaid section 57 interest under section 101(1) of the Supreme Court Act 1986 did not arise in this case. The court held that interest would only accrue on unpaid section 57 interest if the insurer had not made the payment within the time specified in the judgment. The court reserved the decision on the date from which the interest on unpaid section 57 interest would accrue, pending further information.

Orders