Merost Pty Ltd v CPT Custodian Pty Ltd (No 2)

Merost Pty Ltd v CPT Custodian Pty Ltd (No 2) was a case heard in the Federal Court of Australia. The applicant, Merost Pty Ltd, sought pre-judgment interest and indemnity costs from the respondent, CPT Custodian Pty Ltd, following a previous judgment ordering the respondent to pay the applicant $260,000. The court had to decide on the amount of interest payable and whether the applicant was entitled to indemnity costs.

The court found that the respondent should pay pre-judgment interest from the date the cause of action arose until the date of judgment, amounting to $52,339.42. The court rejected the respondent's argument that it should not pay interest for the period when the trial was delayed by the applicant, as there was no evidence of any delay by the applicant. The court held that the purpose of an award of interest is to compensate a party for being out of pocket of money to which that party is entitled.

Regarding the indemnity costs, the court held that the applicant was entitled to indemnity costs from 25 July 2012 on an indemnity basis, as the judgment was more favourable than the terms of the offer made by the applicant. The respondent argued that the terms of the offer should be construed as at the time of the offer, but the court held that this approach was not supported by the text of the rule. The court also rejected the respondent's argument that it would be unjust to require it to pay interest for a period after 25 July 2012 when the applicant would not have been out of its money, holding that the considerations advanced by the respondent did not justify departure from the prima facie entitlement of the applicant to indemnity costs.

The court ordered the respondent to pay the applicant pre-judgment interest of $52,339.42 and costs on an indemnity basis from 25 July 2012.