Minister for Energy, Environment and Climate Change v Patricia Suzanne Megsondavid Alex Morton(as a joint executors of the will of John Alex Morton)
[2019] VSCA 19
•13 February 2019
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2018 0013
| MINISTER FOR ENERGY, ENVIRONMENT AND CLIMATE CHANGE | Applicant |
| v | |
| PATRICIA SUZANNE MEGSON DAVID ALEX MORTON (as a joint executors of the will of JOHN ALEX MORTON) | Respondents |
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| JUDGES: | TATE and EMERTON JJA and ALMOND AJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 12 November 2018 |
| DATE OF JUDGEMENT: | 13 February 2019 |
| MEDIUM NEUTRAL CITATION: | [2019] VSCA 19 |
| JUDGMENT APPEALED FROM: | [2017] VSC 774 (Garde J) |
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VALUATION AND COMPENSATION – Application for leave to appeal – Land reserved for a public purpose – Public Acquisition Overlay preventing use and development of land – Owner sold land at considerable loss – Claim for compensation under Part 5 of Planning and Environment Act 1987 – Claims for loss on sale, expenses and intangible non-financial disadvantage in respect of a residence referred to Court for determination under Land Acquisition and Compensation Act 1986 – Claim for interest on award of compensation under s 60(1) of Supreme Court Act 1986 also disputed – Amounts of compensation for loss on sale and expenses agreed prior to trial – Whether s 60(2)(d) of Supreme Court Act barred award of interest on amounts agreed for loss on sale and expenses – Agreed amounts not sums for which judgment was entered or given by consent – Section 60(2)(d) no bar to the award of interest on amounts of compensation for loss on sale or expenses – Planning & Environment Act 1987 ss 98, 99, 100, 101 and 106; Land Acquisition and Compensation Act 1986 ss 35, 37, 41, 80, 82, 83, 87 and 89; Supreme Court Act 1986 s 60.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr J Delany QC with Ms C Van Proctor | Victorian Government Solicitor’s Office |
| For the Respondents | Mr S R Morris QC with Mr G H Peake | Rennick & Gaynor |
TATE JA:
I have had the considerable benefit of reading the draft reasons of Emerton JA. I agree, for the reasons her Honour gives, that leave to appeal should be granted and the appeal dismissed.
EMERTON JA:
Introduction
The respondents are the children and executors of the estate of the late John Alex Morton, who was the registered proprietor of land at Mt Cottrell, Victoria.
On 6 August 2010, by virtue of the approval of Amendment VC68 to the Melton Planning Scheme and the Wyndham Planning Scheme, a Public Acquisition Overlay (‘POA’) was imposed over parts of the land owned by Mr Morton reserving the land for a public purpose.
On 11 November 2015, Mr Morton sold the parts of his land affected by the POA.
On 2 August 2016, Mr Morton made a claim for compensation for losses incurred on the sale of the land affected by the POA pursuant to ss 98(1)(a), 99(b), 100, 101 and 106 of the Planning & Environment Act 1987 (‘PE Act’).
Part 5 of the PE Act provides for compensation to be paid to landowners where the use and development of land is adversely affected by the reservation of land for a public purpose. Section 98(1)(a) of the PE Act provides, relevantly, that the owner of land may claim compensation from the planning authority for financial loss suffered as the natural, direct and reasonable consequence of the land being reserved for a public purpose under a planning scheme. Section 99 provides that a right to compensation and the liability of a planning authority to pay compensation arises
under s 98(1)(a) on the sale of the land concerned under s 106. Section 106(1) provides, relevantly, that the owner of land may claim compensation under s 98 after the sale of the land if the owner of the land sold it at a lower price than the owner might reasonably have expected to get if the land had not been reserved.
Section 100(1) of the PE Act provides that the amount of compensation payable under s 98 in respect of a residence may be increased by an amount which is reasonable to compensate the claimant for any intangible and non-financial disadvantages arising from the circumstances which gave rise to the claim under s 98.
Section 101 provides that if compensation is payable under s 98, the owner of the land may also claim from the planning authority any legal, valuation or other expenses reasonably incurred in preparing and submitting the claim.
Section 105 provides for Parts 10 and 11 and s 37 of the Land Acquisition & Compensation Act 1986 (‘LAC Act’) to apply to the determination of compensation under Part 5 of the PE Act as if the claim were a claim under s 37 of the LAC Act. Section 105 permits the claimant or the authority to refer a ‘disputed claim’ to the Victorian Civil and Administrative Tribunal or to the Supreme Court for determination. Section 89(1) of the LAC Act provides that the Tribunal or the Court is then to determine the amount of compensation to be paid in respect of the claim.
On 6 March 2017, the applicant referred Mr Morton’s claim to the Supreme Court as a disputed claim. By this stage, Mr Morton had died, and representatives of his estate were named as respondents to the Supreme Court proceeding. The disputed claim was for amounts claimed by Mr Morton as compensation for loss on sale ($10,864,000), expenses ($204,638.78) and intangible non-financial disadvantages in respect of a residence ($1,086,400), as well as for the costs of an application for a private tax ruling and for further expenses and interest.
On 27 June 2017, the applicant advanced $7,705,000 to Mr Morton’s estate in respect of his claims for loss on sale and expenses pursuant to ss 98(1)(a) and 101 of the PE Act. The advance did not include any amount of compensation for intangible non-financial disadvantages in respect of a residence, which I shall refer to as the ‘effect on residence claim’, or for any of the other amounts claimed in Mr Morton’s Notice of Claim.
Prior to the hearing of the disputed claim, the parties agreed to participate in mediation. On 17 August 2017, valuers engaged by the parties conferred and issued a joint statement in which they assessed the unaffected value of the land as $9,916,600 and the affected value as $860,000, producing an assessed loss on sale of $9,056,600.
On 1 September 2017, the applicant offered the respondents and the respondents agreed to accept the following amounts in respect of the claims for loss on sale and for expenses falling within s 101 of the PE Act (‘s 101 expenses’):
(a) For financial loss suffered as the natural, direct and reasonable consequence of the reservation of the Mt Cottrell land for a public purpose under the Melton and Wyndham Planning Schemes $9,056,600 (b) For legal, valuation and other expenses reasonably incurred in preparing and submitting the claim $75,992
The applicant subsequently advanced a further sum to the respondents to make up the difference between the amount already advanced and the sum of the amounts agreed for loss on sale and s 101 expenses.
Following the mediation, a number of parts of Mr Morton’s claim were abandoned. The principal part of Mr Morton’s claim that remained in dispute in the Supreme Court proceeding was the effect on residence claim. Furthermore, the respondents claimed to be entitled to interest upon both agreed amounts ($9,056,600 and $75,992) pursuant to s 60(1) of the Supreme Court Act 1986. The applicant disputed, and continues to dispute, the respondents’ entitlement to this form of interest on the agreed amounts.
Section 60(1) of the Supreme Court Act requires the Court, in any proceeding for the recovery of debt or damages, to give damages in the nature of interest as it thinks fit from the commencement of the proceeding to the date of judgment over and above the debt or damages awarded. However, s 60(2)(d) provides that nothing in s 60 ‘authorises the allowance of any interest otherwise than by consent on any sum for which judgment is entered or given by consent’.
At trial, three matters were in contention arising from the respondents’ claim for interest pursuant to s 60(1) of the Supreme Court Act:
(a) Whether or not s 60 of the Supreme Court Act had application to compensation awarded by the Supreme Court pursuant to Part 5 of the PE Act;
(b) If s 60(1) of the Supreme Court Act did apply to confer jurisdiction on the Court to award interest, whether interest should be ordered in this case having regard to s 60(2)(d) of the Supreme Court Act; and
(c) If interest were to be ordered pursuant to s 60(1) of the Supreme Court Act, what was the rate at which it should be ordered.
The judge at first instance held that the respondents were entitled to an amount of compensation for effect on residence pursuant to s 100 of the PE Act, that s 60(1) of the Supreme Court Act applied to compensation awarded by the Court pursuant to Part 5 of the PE Act, that s 60(2)(d) did not preclude the allowance of interest on the two amounts of compensation agreed by the parties for loss on sale and s 101 expenses, and that interest was payable at the rate fixed under the Penalty Interest Act 1983.[1]
[1]Minister for Energy, Environment and Climate Change v Morton [2017] VSC 774 [129] (‘Reasons’).
The trial judge rejected the argument that s 62(2)(d) of the Supreme Court Act was a bar to an allowance for interest on the agreed amounts, holding that s 62(2)(d) had no application because ‘there has been no judgment entered by the Court or given by consent’ so as to attract the operation of the provision.[2] His Honour allowed interest pursuant to s 60(1) of the Supreme Court Act on the amounts of compensation awarded to the respondents, namely, on the agreed amounts of $9,056,600 and $75,992 for loss on sale and s 101 expenses respectively and on the amount of $60,000 awarded for effect on residence. Interest was held to run from three different dates as a result of the two advances that were made.
[2]Ibid [94] .
On 19 December 2017, the trial judge made orders for the award of compensation and the award of damages in the nature of interest in specified amounts. The orders contained an error in the interest calculation. On 20 December 2017, his Honour made the following final orders:
THE COURT ORDERS THAT:
1.Order 1 of the judgment order in this proceeding dated 19 December 2017 is amended to read:
There be an award of compensation to the defendants in the sums of:
a.$9,056,600.00 for loss on resale under s 98(1) of the Planning and Environment Act 1987 (Vic) (‘PE Act’);
b.$75,992.00 for legal, valuation and other expenses reasonably incurred in preparing and submitting the claim under s 101 of the PE Act;
c.$60,000.00 for increased compensation not exceeding 10% of the compensation payable in relation to the property ‘Arva’, 1645 Boundary Road, Mt Cottrell under s 100 of the PE Act,
which is satisfied in part by the advances of compensation paid by the plaintiff to the defendants in the sums of $7,705,000.00 paid on 27 June 2017 and $1,427,592.00 paid on 2 October 2017.
2.Order 2 of the judgment order in this proceeding dated 19 December 2017 is amended to read:
There be an award of damages in the nature of interest to the defendants in the sums of:
a.$287,111.09, being interest at the rate of 10% per annum on the amount of $9,192,592.00 between 6 March 2017 to 27 June 2017;
b.$39,533.27, being interest at the rate of 10% per annum on the amount of $1,487,592.00 between 28 June 2017 and 2 October 2017; and
c.$1,282.19 being interest at the rate of 10% per annum on the amount of $60,000.00 between 3 October 2017 and 19 December 2017.
The applicant seeks leave to appeal and, if successful, to appeal the orders of the trial judge that interest be paid under s 60(1) of the Supreme Court Act on the amounts of $9,056,600 and $75,992, judgment for which the applicant says was ‘entered or given’ by the Supreme Court on 20 December 2017 by consent.
The question of law on appeal is therefore whether s 60(2)(d) of the Supreme Court Act operated to bar the allowance of interest on the amounts of compensation that were agreed by the time the proceeding came to trial.
Because the principal contention made by the respondents is that s 60(2)(d) is not engaged on the facts of this case, it is necessary to look closely at the way in which the question of the agreed amounts and the entitlement to interest upon them came before the trial judge.
Background
The trial below proceeded on the basis of an Amended Joint Statement of Agreed Facts dated 28 September 2017 and the witness statement (affidavit) of Lauren Kate Sullivan dated 21 September 2017 filed on behalf of the respondents (who were ‘the Respondent’ below). The parties also filed written submissions.
The Sullivan witness statement stated:
The Applicant and the Respondent have agreed that the following amounts should be awarded to the Respondent for loss on sale and expenses pursuant to the Planning and Environment Act.
The agreed amounts are then set out in a table. The Sullivan witness statement continues:
3.The Respondent seeks judgment for the Agreed Heads of Claim.
4.The sums agreed in respect of the Agreed Heads of Claim do not include any amount for interest.
5.The Respondent seeks an order for interest pursuant to s 60 of the Supreme Court Act 1986 in respect of the Agreed Heads of Claim.
6.The Applicant denies the Respondent is entitled to an order for interest.
The Sullivan witness statement exhibits the train of correspondence between the solicitors for the respondents, Rennick & Gaynor, and the Victorian Government Solicitor’s Office (‘VGSO’) for the applicant concerning the agreement on the amounts of compensation payable for loss on sale and s 101 expenses.
On 30 August 2017, Rennick & Gaynor wrote to VGSO seeking confirmation of the agreement in relation to loss on sale and s 101 expenses. On 31 August 2017, VGSO responded seeking confirmation that the agreement would ‘entirely dispose of your client’s claims under ss 98 and 101 of the Planning and Environment Act 1987 (PE Act)’. VGSO’s letter continued:
If this is correct, please also confirm that the only remaining issues in dispute would be your client’s entitlements to effect on residence under s 100 of the PE Act, and any entitlement to interest.
Rennick & Gaynor responded to VGSO on the same day as follows:
Our client wishes to confirm agreement on the quantum of the loss on sale ($9,056,600) pursuant to s 98 and pre-referral expenses ($75,992) pursuant to s 101 of the Planning and Environment Act 1987 (‘P&E Act’).
Provided that quantum of the loss on sale and s 101 expenses is agreed, I am instructed that our client will not pursue any further claim in relation to ss 98 and 101 of the P&E Act, save for his entitlement to interest thereon.
On 1 September 2017, VGSO wrote back in the following terms:
In that event, we confirm that the Authority agrees to the sum of $9,056,600 with respect to the claim for loss pursuant to s 98(1) of the Planning and Environment Act 1987 (PE Act), and $75,992 with respect to the claim for pre-referral expenses pursuant to s 101 of the PE Act, on the basis that agreement fully disposes of your client’s claims and entitlements under ss 98 and 101 of the PE Act (acknowledging your client’s reservation as to interest).
It is clear from this correspondence that the availability of interest on the agreed amounts was a live issue in the proceeding and acknowledged as such by the applicant.
On 8 September 2017, the respondents filed Further Amended Particulars of Claim claiming the amounts agreed for loss on sale and s 101 expenses and an amount of $60,000 for effect on residence pursuant to s 100 of the PE Act. They also claimed interest on the amounts claimed for loss on sale and s 101 expenses pursuant to the Supreme Court Act.
On 14 September 2017, the applicant filed Further Amended Particulars of Offer (‘Offer’). Under the heading ‘Agreement between the parties as to compensation’, the Offer stated:
On 1 September 2017, the Applicant and the Respondent agreed that the Respondent was entitled to compensation under ss 98(1)(a) and 101 of the PE Act on the following basis:
The Offer then set out the relevant amounts in a table under the column heading ‘Agreed Sum’.
In respect of the claim for interest, the Offer stated:
8.The Applicant offers $nil for the Respondent’s claim for interest pursuant to s 60(1) of the SC Act.
9.The Applicant denies that the Respondent is entitled to an order for interest pursuant to s 60(1) of the SC Act by virtue of s 60(2)(d) of the SC Act because the parties have agreed to judgment for the sum of compensation to which the Respondent was entitled under ss 98(1) and 101 of the PE Act and the Applicant has not consented to an order for interest under s 60(1) of the SC Act.
10.Further and in the alternative, the Applicant denies that s 60(1) of the SC Act empowers or requires the Court to make an order for interest with respect to judgment of an award of compensation under Part 5 of the PE Act because compensation under that Part does not constitute ‘debt or damages’ for the purpose of s 60(1) of the SC Act.
In relation to the interest claim, the following appeared in the Joint Statement of Agreed Facts:
13.The amounts agreed to be paid by [the applicant] to [the respondents] in respect of [the respondents’] claims for loss on sale and for legal, valuation and other expenses do not include any allowance for interest.
14.[The applicant] has not consented to the payment of interest with respect to any sum payable to the [respondents] arising from the [claim].
Both parties filed written submissions in the trial dealing with the agreed facts and the availability (or not) of an allowance for interest on those amounts.
The applicant’s written submissions in the trial stated:
The parties have since agreed to resolve the quantum of compensation to which [the respondents are] entitled under ss 98(1)(a) and 101 of the PE Act by a consent judgment of this Court. [The applicant] has not consented to an order for interest on these sums of compensation.
They also stated:
In this proceeding the parties have agreed on the sum of compensation to which [the respondents are] entitled under ss 98(1)(a) and 101 of the PE Act. As this proceeding is within the jurisdiction of this Court that agreement must be converted into an order made by consent in order for it to resolve this proceeding and bring the dispute between the parties on that point to an end. Section 60(2)(d) is therefore a complete barrier to the making of an order for interest with respect to those sums of compensation.
The respondents’ written submissions in the trial referred to ‘the remaining claims’, being the effect on residence claim and the entitlement to an allowance of interest pursuant to s 60(1) of the Supreme Court Act. The submissions then set out the chronology of claims and offers, including the Offer filed on 14 September 2017 by which the applicant offered $9,056,600 for loss on sale and $75,992 for s 101 expenses. The submission stated that the amount to be awarded under s 98 for loss on sale ‘is agreed at $9,056,600’ and the amount to be awarded pursuant to s 101 ‘is agreed at $75,992’.
The respondents’ submissions continued:
17.As these amounts are agreed, [the respondents seek] judgment against [the applicant] in respect of the agreed amounts.
However, later in the submissions, the respondents stated:
50.[The respondents] had not consented to judgment being entered or given by consent for these amounts without there being an allowance made for interest thereon pursuant to s 60. In the absence of a judgment by consent s 60(2)(d) is of no application.
51.The agreed amounts do not include an allowance for interest. The sum of $9,056,000 is the sum agreed between the Valuers in the Valuers’ joint statement as the amount properly payable to [the respondent] for loss of sale. The amount of $75,992 represents the amount claimed for legal valuation and like expenses pursuant to s 101 as claimed at paragraph 22 of [the respondents’] further amended particulars of claim.
52.If an amount is allowed for solatium under s 100, then as of 26 September 2017, the parties have agreed that the quantum of such allowance is $60,000.
53.Accordingly, s 60(2)(d) is of no relevance to [the respondents’] claim for interest under s 60(1) as there is no judgment that is entered or given by consent. Judgment means judgment in the proceeding. An agreement between the parties as to the amount payable for loss on sale and the amount payable for legal and like expenses is not a judgment entered or given by consent.
We have been provided with the transcript of the trial. At the beginning of the trial, counsel for the respondents told the trial judge that he would take the Court to ‘the matters that are agreed and the matters that remain in dispute’.[3] He told the trial judge that as a result of the agreements, the hearing would probably conclude in a day, to which his Honour responded, ‘Well, that’s a remarkable effort for a case that might considerably take six weeks if argued on all points’.[4]
[3]Transcript of proceedings, Minster for Energy, Environment and Climate Change v John Alex Morton (or representative of his estate) (Supreme Court of Victoria, Garde J, 2 October 2017) 2 (G Peake).
[4]Ibid 3 (Garde J).
Counsel for the respondents told the Court that it had been agreed that if the Court were to find that the respondents were entitled to an increase in compensation under s 100, the quantum of that entitlement would be $60,000.[5] He then turned to consider the other matters, stating that ‘consequent upon a conclave of the valuers in a joint report, the quantum for the loss on sale component of the claim is now agreed at $9,056,600’.[6] At this point, the trial judge intervened:
[5]Ibid 4 (G Peake).
[6]Ibid 5 (G Peake).
HIS HONOUR: Now before you go any further, has there been a side agreement between the parties as to the payment of that sum or are you looking to see that embraced in an award of the court?
MR PEAKE:There is an issue regarding interest on that sum, so we’ll be seeking to have it embraced in the order ― in an order of the court, Your Honour.
HIS HONOUR: All right, thank you.
MR PEAKE: There has been an amount of that advanced but that ― there’s no rights to an advance under the Planning & Environment Act as your Honour would be aware. An amount of slightly in excess of $7.5m has been advanced, but that really is only of any relevance when we come to the interest question, which we’ll come to that.
HIS HONOUR: What may be helpful and you may have done this already is for each side to prepare a draft of order of the court which embodies the orders that it seeks and that will pick up on, for example, amounts of the advance and other amounts which may adjust the overall outcome but I think that would be helpful to see what the parties mutually seek.
MR PEAKE:I’m sure my learned friend and I can attend to that possibly in the lunch break, Your Honour.
HIS HONOUR: Thank you.
MR PEAKE:So Your Honour, the loss on sale quantum which was obviously the big ticket item, if I can use that phrase, was agreed at $9,056,600. The claim for expenses under s 101 has also been agreed at $75,992.[7]
[7]Ibid 5 – 6.
Counsel for the respondents then briefly explained that certain expenses had not been pursued as the result of the Court’s decision in another matter. He stated that there were effectively two questions before the Court, the first under s 100 and the second on the question of interest. Counsel also confirmed that ‘the assessed loss as agreed between the valuers was $9,056,600 and that’s where the agreement as to quantum comes from’.[8]
[8]Ibid 10 (G Peake).
After taking the trial judge through the correspondence, counsel for the respondents submitted that both the pleadings and the correspondence made it clear that interest had always remained a live issue between the parties and there had ‘certainly’ never been any suggestion that the respondents would consent to judgment for an amount that excluded interest.[9] He further submitted that ‘judgment’ meant judgment in the proceeding, and that agreement between the parties as to the amount payable by the applicant for loss on sale and for s 101 expenses was not a judgment given by consent, particularly as the respondents’ further amended particulars directly sought an order for interest under s 60.[10]
[9]Ibid 27 (G Peake).
[10] Ibid 68 – 69 (G Peake).
Senior Counsel for the applicant submitted to the Court below that an award by consent would be made in respect of the two amounts and that so much was consented to by both parties.[11] She told the Court that there had been agreement as to ‘the s 98 component’ and ‘the s 101 component’ but the applicant had never agreed to the payment of interest.[12] No matter what else the Court decided, there would be a judgment by consent, by agreement, in respect of ‘the s 98 claim’ and ‘the s 101 claim’, thus enlivening s 60(2)(d) of the Supreme Court Act.[13]
[11]Ibid 101 (M Quigley QC).
[12]Ibid.
[13]Ibid 109 (M Quigley QC).
It is apparent from the foregoing that the parties, and the respondents in particular, used a variety of language to describe what the Court should or was required to do with the agreement reached by the parties as to the quantum of loss on sale and the quantum of the s 101 expenses. In the Sullivan witness statement, the respondents asked for judgment to be entered in respect of the ‘Agreed Heads of Claim’. However, it was submitted in argument that there was no agreement to judgment being entered for the relevant amounts absent an award of interest.
What the respondents ultimately sought was to have the agreement that was reached about the quanta of the loss on sale and the s 101 expenses ‘embraced’ in an order of the Court. For its part, the applicant sought judgment ‘by consent’ in respect of those amounts.
The decision below
In his reasons for judgment, the trial judge referred to the claim for loss on sale as having been ‘agreed between the parties in the sum of $9,056,600’ and the claim for expenses having been ‘also agreed between the parties in the sum of $75,992’. His Honour stated:
The agreed claims total $9,132,592.00 and the Court is asked to make an award by consent in favour of [the respondents] in the agreed amounts.[14]
[14]Reasons [3].
His Honour then referred to there being two claims that the parties were not able to resolve which stood for determination, including a claim for interest on the amounts agreed.
The Reasons deal with the relevant question of interest under the heading ‘Can interest be awarded on a sum for which judgment is entered or given by consent?’ Under this heading, the trial judge set out the applicant’s submission concerning the operation of s 60(2)(d) of the Supreme Court Act and the process of negotiation leading to agreement on the quantum for loss on sale and the amount of the pre-referral expenses. His Honour concluded:
As submitted by [the respondents], it is clear beyond dispute that the claim for interest was pursued by them, and at all times disputed by VGSO for the Minister. The claim for interest was not compromised or abandoned by the claimants.[15]
[15]Reasons [93].
As to the effect of s 60(2)(d) of the Supreme Court Act, the trial judge held as follows:
In my view, the submission made on behalf of [the applicant] that s 60(1)(d) of the SC Act bars the claim for interest is misconceived. Section 60(1)(d) applies only if there has been a judgment entered by the Court or given by consent. In the present case, there has been no judgment entered by the Court or given by consent. It is true that the parties have reached agreement on the major items of claim, but this is not sufficient to attract the operation of s 60(1)(d). For there to be a prohibition on the award of interest under s 60(1)(d), there must be a judgment of the Court.
Quite apart from s 60(1), s 101(1) of the SC Act provides for interest on an unpaid monetary judgment at the rate fixed under s 2 of the PIR Act from the time the judgment was given. The liability to pay penalty interest on an unpaid monetary judgment arises under s 101(1), and not under s 60(1).
As Brooking and Hayne JJ noted in GEF Packaging Services Pty Ltd v Turner, a plaintiff cannot recover both interest under s 60 and interest under s 101 in respect of the same damages and the same period.
Section 60(2)(d) ensures consistency with s 101 of the SC Act by limiting the award of interest under s 60(1) to the period of time leading up to the entry of judgment by the Court. It is only by consent that interest can be awarded under s 60(1) after a judgment has been entered or given by consent in a proceeding. Section 60(2)(d) does not operate as a bar to the claimants’ claim for interest. It has no present application as there has been no judgment of the Court.
…
[The respondents] are successful in their claims for increased compensation in relation to the residence ‘Arva’ under s 100(1) of the PE Act, and in their claim for interest under s 60(1) of the SC Act. The Court will award compensation in accordance with the agreement reached by the parties and the determination of the Court in relation to the claim for increased compensation and for interest. Simple interest at the rate of 10% per annum will be allowed on the amount in dispute between the parties as ultimately awarded by the Court from the commencement of the proceeding with full allowance to be given for the advance of compensation by [the applicant].[16]
[16]Reasons [94]–[97], [129]. The references to s 60(1)(d) should plainly be references to s 60(2)(d).
Proposed grounds of appeal
The applicant has raised two proposed grounds of appeal:
(1)The Court erred in law in making an order pursuant to s 60(1) of the Supreme Court Act that the applicant pay the respondents’ interest on the sums of $9,056,600 and $75,992 on the premise that there was no judgment ‘entered or given by consent’ of the parties and therefore s 60(2)(d) of the Supreme Court Act had no application;
(2)Having given judgment in the sum of $9,132,592 based upon the consent of the parties the trial judge erred by failing to separately consider and to rule upon whether or not separate consent to an award of interest was also needed in order for the Court to have power to award interest pursuant to s 60 of the Supreme Court Act notwithstanding s 60(2)(d) of the Supreme Court Act.
Applicant’s submissions on appeal
The applicant submits that the trial judge erred in law in the construction and application of s 60(2)(d) of the Supreme Court Act when his Honour held that there must first (that is, on some anterior date) be judgment ‘entered or given by consent’ in order for the subsection to have application. The power to award interest conferred by s 60(1) of the Supreme Court Act presupposes that judgment will be entered at the conclusion of the proceeding and that it is upon that judgment and up to that date that interest will be payable. In contested cases, the entry of judgment will follow the delivery of reasons. There is no requirement in s 60(2)(d) that judgment by consent precede by a day or more the judgment for interest, in each case by consent.
According to the applicant, reading s 60(2)(d) as imposing a temporal requirement would require its language to be changed to read ‘on any sum for which judgment has been entered or given by consent’ or by adding at the end, ‘judgment is entered or given by consent on an earlier occasion’. The ordinary grammatical meaning of s 60(2)(d) militates against a construction that would require or impose a temporal requirement or ‘gap’ between judgment given by consent and the consideration of interest. Moreover the context does not support the imposition of a time or temporal consideration. Section 60(1) contains no reference to judgment first having been obtained or entered.
According to the applicant, the legal policy expressed in s 60(1) and 60(2)(d) of the Supreme Court Act is clear. The intent is to encourage parties to compromise the proceeding by ensuring finality in the quantum of any sum of debt or damages agreed by the parties and for which judgment is entered or given by consent.
Moreover, so the applicant says, there is a jurisdictional constraint.
The applicant submits that in this case, the only reason for judgment being entered in respect of the two amounts was that the parties sought an award by consent which was the subject of the judgment ‘entered or given’ on 19 December 2017.[17] Without consent to judgment by the parties, there would have been no basis for paragraphs 1a. and 1b. of the judgment entered. According to the applicant, by reason of s 105 of the PE Act and the imported provisions of the LAC Act, it is only those elements of a claim that are ‘disputed’ that constitute the subject matter for the exercise of jurisdiction by the Supreme Court following referral of a ‘disputed claim’. There ceased to be any dispute as to the claims for loss on sale and s 101 expenses on 1 September 2017 and, on 2 October 2017, the balance of the money referrable to those amounts was paid to the respondents. There was no jurisdictional basis or reason for the Court to make an award of compensation referrable to those two items, except that the Court was requested to do so by consent. The trial judge was then required to consider whether there was consent to the award of interest, as required by the text of s 60(2)(d) of the Supreme Court Act. Proposed Ground 2 follows from the analysis in Ground 1 because the trial judge failed to separately consider and rule upon whether consent to an award of interest was also required.
[17]As amended on 20 December 2017.
The applicant denies that s 60(2)(d) applies only where there is agreement to the whole of a judgment (as contended by the respondents), submitting in oral argument that because s 60(2)(d) expressly refers to ‘interest otherwise than by consent on any sum’, it cannot be referring to the whole of the judgment. Senior Counsel gave examples of proceedings where s 60(2)(d) would ‘bite’ in respect of part of the judgment: a judgment made up of a monetary sum and a declaration where the monetary sum was agreed but not the declaration; a judgment in a proceeding involving a claim and counterclaim where the parties agreed on judgment for the claim but not the counterclaim (or vice versa); and a judgment in a contractual claim for three different amounts where the parties settled on two of the claims but not the third. In each case, it was submitted, the part that was agreed would be settled and the proceeding would continue in relation to the remaining part. Section 60(2)(d) would prevent an award of interest on the sum in respect of which settlement was reached.
Respondents’ submissions
The respondents submit that s 60(2)(d) of the Supreme Court Act has no application on the facts. The correct interpretation of s 60(2)(d) is that it only applies where judgment in a claim is entered or given by consent and such consent must be ‘complete’ in that the parties must agree to all matters that are to be the subject of the judgment by consent including, relevantly, whether there is to be an award of interest on the agreed sums. Section 60(2)(d) has no application where the quantum of one or more heads of claim is agreed between the parties, but other heads of claim and the award of interest remain in dispute. In these circumstances there is no consent to judgment being entered or given for a final ascertained amount.
According to the respondents, it is apparent from the Summary of Agreed Facts and the Sullivan witness statement that there was no consent to judgment for a final ascertained amount being given or entered in the proceeding. There was only agreement as to the amounts to be awarded to the respondents under the two heads of claim. There remained disagreement as to the amount to be awarded under a third head of claim and as to interest. The respondents did not consent to judgment being entered or given in the absence of an award of interest on the agreed amounts from the date of the issue of proceedings to the date of payment of the agreed amounts (for the amounts paid before judgment) and to the date of judgment (for the amounts not already paid).
The respondents further submit that it cannot be correct that the applicant, having offered to pay the respondents an agreed sum for part of a claim, then has complete power of control or veto over the award of interest on that sum.
As to ground 2, the respondents submit that the question does not arise.
Analysis
The applicants submit that s 60(2)(d) of the Supreme Court Act bars an award of interest on the amounts agreed for loss on sale and s 101 expenses because the Court below gave judgment for those specific amounts by consent. The respondents submit that s 60(2)(d) has no application on the facts because there was no agreement to judgment being entered for those amounts in the absence of the Court making a determination about the availability of interest and, further, that the parties’ agreement did not give rise to a judgment given by consent, as there were other matters in dispute demanding resolution by the Court.
It remains the case, whatever the parties thought they were doing, that the judge below was given two figures representing amounts of compensation referrable to particular forms of loss or detriment recognised by Part 5 of the PE Act that he incorporated in his orders without adjudication on the merits. The amounts in Orders 1a. and 1b. were amounts agreed by the parties in respect of the relevant heads of claim that they sought to have ‘embraced’ by the orders of the Court.
Section 60(2)(d) of the Supreme Court Act bars an award of interest under s 60(1) on ‘any sum’ for which judgment is entered or given by consent. In his Reasons, the judge below held that s 60(2)(d) had no ‘present application’ because there had been no judgment of the Court, suggesting the need for a temporal gap between a judgment given by consent and the application for an award of interest on that judgment. As the applicant submitted, the plain words of s 60(2)(d) — ‘judgment is entered or given by consent’ — and the use of the present tense (‘is’), as opposed to the past tense (‘was’) or the present perfect (‘has been’) militate against such a construction. However, the judge below also based his decision on the need for there to be agreement on all matters in dispute for there to be judgment given by consent on any sum for the purposes of s 60(2)(d). It is on the question of whether the consent needed to be ‘complete’ that the parties largely joined issue in this appeal.
In my view, for the reasons that follow, the appeal turns on the related question of what is a ‘sum’ on which judgment is given in the context of the jurisdiction exercised by the Court to determine the compensation payable by a planning authority to a landowner for loss suffered as a result of one of the events referred to in s 98 of the PE Act.
The Court below, in giving judgment, that is, in awarding compensation to the respondents in respect of a disputed claim for compensation, exercised the jurisdiction and powers conferred on the Court by the PE Act. Section 105 of the PE Act provides that Parts 10 and 11 and s 37 of the LAC Act, with any necessary changes, apply to the determination of compensation under Part 5 of the PE Act as if the claim were a claim under s 37 of the LAC Act.
Section 37 of the LAC Act deals with claims for compensation in circumstances where the Authority[18] — in this case the applicant — has not made an offer of compensation under s 31 of the LAC Act. Subsection (3) provides that a claim for compensation under s 37 must be in the same form and contain the same particulars as a notice of claim under s 35 of the LAC Act, which is the form of claim made in circumstances of a compulsory acquisition. The notice of claim must, in particular, state the amount of compensation to which the claimant claims to be entitled.
[18]‘The Authority’ means a person or body who or which— (a) is authorized by or under the special Act to acquire land; and (b) in the special Act is expressed to be the Authority for the purposes of this Act: LAC Act s 3.
On 4 August 2016, the respondents served on the applicant a notice of claim (‘Notice of Claim’) seeking compensation for the loss or detriment that they had suffered arising from the imposition of the POA by reference to a number of heads of claim, including for loss on sale and effect on residence, as well as for a range of expenses, including some covered by s 101, and for a form of interest based on lost opportunity. The Notice of Claim also foreshadowed further ‘reserved’ claims.
Once a notice of claim has been served, the Authority has three months in which to serve upon the claimant a statement in writing replying to the notice of claim.[19] That statement must either admit the claim, make an alternative offer of compensation or reject the claim.[20] Section 37(7) provides for the Authority to admit the claim in full or in part, leaving specified matters subject to negotiation. To the extent that the Authority admits the claim, it is liable to satisfy the claim.[21] The claimant then has two months in which to either accept the offer or reject the offer.[22] Acceptance may be subject to any matters left to be determined by negotiation.[23] Subsection (12) then provides:
To the extent that the claimant rejects an offer of the Authority or the Authority rejects a claim by the claimant, the claim becomes a disputed claim for the purposes of this Act.
[19]LAC Act s 36(1).
[20]Ibid s 36(2).
[21]Ibid s 37(7).
[22]Ibid s 37(9).
[23]Ibid s 37(10).
In this case, the applicant did not respond to the Notice of Claim (being, ‘the claim’) within the time specified in the LAC Act and the claim (as a whole) became a ‘disputed claim’ on 4 November 2016.
The applicant subsequently made an open offer of compensation, consisting of an offer of $7,605,000 for loss on sale and $100,000 for effect on residence, and stating that the amount for s 101 expenses was subject to negotiation. No part of this offer was accepted by the respondents. However, the respondents requested and the applicant advanced the sum of $7,605,000. As the respondents claimed $10,864,000 for loss on sale, the balance of that amount remained in dispute.
Part 10 of the LAC Act applied to the resolution of the disputed claim. Section 80 provides that the Authority or the claimant may, relevantly, refer the disputed claim to the Court for determination in accordance with the LAC Act. Section 82 sets out the form of a Notice of Referral and s 83 requires its service on the other parties to the dispute.
In this case, the applicant filed a Notice of Referral attaching the Notice of Claim dated 2 August 2016. By this means, all heads of claim in the Notice of Claim came before the Court for determination.
Section 87 of the LAC Act contemplates that the parties may vary an offer or a claim at any time before ‘settlement’ or ‘determination’ of the dispute. Section 88 provides:
If the parties to the dispute arrive at an agreement to settle the disputed claim at any time before the determination of the claim by the Court, the Court must ratify the agreement which then takes effect as if it were a determination of the Court under this Part.
In this case, the parties did not arrive at an agreement to settle the disputed claim. As a result of the valuers’ conference and the mediation, they reached agreement on the quantum of two heads of claim. The applicant paid an amount ($1,427,592) as a further ‘advance’ representing the difference between the advance already made and the aggregate of the agreed amounts. However, the disputed claim proceeded to hearing and determination by the Court, albeit that the Court was no longer asked to adjudicate on the quanta of loss on sale or s 101 expenses.
Section 89(1) of the LAC Act describes the role of the Court in respect of a disputed claim that is referred to it. It provides:
On an application or referral of a disputed claim under this Part, the Tribunal or Court is to determine the amount of compensation in accordance with this Act to be paid in respect of the claim and may make any orders necessary to give effect to that determination.
As to the principles to be applied by the Court in determining compensation, s 90(2) provides:
In determining the compensation payable the Tribunal or the Court is not bound by the exercise of any discretion of the Authority or by any opinion or determination of the Authority, but must determine the compensation payable in the particular circumstances of the case having regard to the provisions of this Act.
It was never in dispute that the respondents sold the land affected by the POA for an amount that was considerably less than they would have received had there been no POA affecting the land. They suffered a loss on sale for the purposes of s 106(1) of the PE Act and were entitled to compensation for such loss under s 98(1)(a). The respondents also incurred expenses in preparing and submitting their claim, which entitled them to compensation under s 101 of the PE Act. They made a number of further claims, including a substantial claim for effect on residence.
None of the heads of claim in the Notice of Claim was resolved as at 6 March 2017 and the ‘disputed claim’ comprising all of the heads of claim was referred to the Court for determination on that date. The Court was thereby seized of jurisdiction to determine the amount of compensation to be paid in respect of the disputed claim and to make orders necessary to give effect to that determination.
The conference of valuers and a mediation resulted in the parties agreeing on the quantum for loss on sale and the quantum for expenses claimable under s 101. They did not agree on whether the respondents were entitled to compensation for effect on residence, but agreed on an amount for that head of claim in the event that the Court, when considering the disputed claim, was to hold that there was such an entitlement.
Following the mediation, the respondents filed further amended particulars of claim in which they:
(a) reduced their claim for loss on sale from $10,864,000 to $9,056,600;
(b) reduced their claim for effect on residence from $1,086,400 to $60,000;
(c) reduced their claim for legal, valuation and other expenses from $221,292.13 to $75,992;
(d) abandoned their claims for the cost of obtaining a private tax ruling and for ‘opportunity cost’ interest;
(e) maintained their claims for interest pursuant to s 60(1) of the Supreme Court Act and for the costs of the proceeding.
In response, by the Offer, the applicant:
(a) offered $9,056,600 for loss on sale;
(b) offered $75,992 for legal, valuation and other expenses;
(c) offered $nil for effect on residence;
(d) disputed the respondents’ claim for interest pursuant to s 60(1) of the Supreme Court Act.
This joining of issue meant that in determining the disputed claim and making orders to give effect to that determination in accordance with s 89 of the LAC Act, the Court below was no longer called upon to assess the amount of the loss on sale in accordance with s 106 or adjudicate on the amount of expenses falling within s 101 of the PE Act. However, the Court remained obliged to determine the availability of compensation for effect on residence and interest pursuant to s 60 of the Supreme Court Act.
It is plain from the correspondence and from the submissions made by the parties in the Court below that, notwithstanding their agreement on the amounts for loss on sale and s 101 expenses, the parties remained in dispute on whether the respondents were entitled to interest on those amounts pursuant to s 60(1) of the Supreme Court Act. The respondents’ position was clear: in the Court’s determination of the compensation to be paid by the applicant, all amounts forming part of the compensation payable should carry interest. The applicant’s position was that there was no entitlement to interest under s 60 at all, but if there was such an entitlement, then the agreed amounts were excluded by 60(2)(d).
It is clear that the parties agreed that the dispute about the availability of interest should be determined by the Court. It formed part of the disputed claim demanding judicial determination, along with adjudication on the effect on residence claim. The dispute about the effect on residence claim was not a dispute about quantum (which had been agreed), but rather a dispute about the availability of such compensation in the circumstances of the case.
The Court was required to determine the compensation payable to the respondents. That compensation, like the compensation commonly awarded in cases of compulsory acquisition, would be made up of a number of components, reflecting a number of heads of claim. The loss underlying each head of claim was attributable to a single event: the sale of the blighted land at a much reduced price following the imposition of the POA. In substance, the judge below was required to determine what amount of money should be paid to the respondents to compensate them for the loss or detriment that they suffered when selling the land due to the blight represented by the POA. Two elements or aspects of the loss were agreed; others were not. The parties proceeded to trial on the basis that they would inform the judge that it would be unnecessary to hear from the valuers about the values assessed for the land in its unaffected and affected states, or hear evidence about the s 101 expenses. The judge could take it from the parties that the relevant amounts were as agreed. However, the judge would have to hear evidence and make a determination about whether there was an entitlement to compensation for effect on residence under s 100 of the PE Act and he would have to hear legal argument and make a determination about the availability of interest under s 60(1) of the Supreme Court Act. His Honour would then have to make orders necessary to give effect to the Court’s determination of the compensation to which the respondents were entitled as a result of the imposition of the POA.
The trial judge held, and it is not now challenged, that there was no doubt about the applicability of s 60 of the Supreme Court Act to an award of compensation under Part 5 of the PE Act.[24] The composite expression in s 60(1), ‘debt or damages’, embraces any proceeding in which a claim for money is made and there is, therefore, prima facie an entitlement to interest on an award of compensation for planning blight made by the Court pursuant to the PE Act. However, s 60(2)(d) bars an award of interest pursuant to subsection (1) on ‘any sum for which judgment is entered or given by consent’.
[24]Reasons [80] citing Victorian WorkCover Authority v Esso Australia Ltd (2001) 207 CLR 520.
The words in s 60(2)(d), ‘any sum for which judgment is entered’ must be read in the context of the provision as a whole. In order to construe s 60(2)(d), it is necessary to set out s 60 in full:
60 Interest in proceedings for debt or damages
(1)The Court, on application in any proceeding for the recovery of debt or damages, must, unless good cause is shown to the contrary, give damages in the nature of interest at such rate not exceeding the rate for the time being fixed under section 2 of the Penalty Interest Rates Act 1983 as it thinks fit from the commencement of the proceeding to the date of the judgment over and above the debt or damages awarded.
(2)Nothing in this section—
(a)authorises the granting of interest on interest;
(b)applies in relation to any sum on which interest is recoverable as of right by virtue of any agreement or otherwise;
(c)affects the damages recoverable for the dishonour of a negotiable instrument;
(d)authorises the allowance of any interest otherwise than by consent on any sum for which judgment is entered or given by consent;
(e)applies in relation to any sum on which interest might be awarded by virtue of section 58 or 59; or
(f)limits the operation of any enactment or rule of law which, apart from this section, provides for the award of interest.
(3)If the damages awarded by the Court or jury include or if the Court in its absolute discretion determines that the damages awarded include any amount for—
(a)compensation in respect of liabilities incurred which do not carry interest as against the person claiming interest;
(b)compensation for loss or damage to be incurred or suffered after the date of the award; or
(c)exemplary or punitive damages—
the Court must not allow interest in respect of any amount so included or in respect of so much of the award as in its opinion represents any such damages.
(4)The Court may request a jury to specify in its verdict any amount included in the verdict in respect of the matters referred to in subsection (3).
Section 60(1) applies to proceedings for the recovery of debt or damages. An award of damages will commonly be made up of components. This is recognised in subsection (3), which precludes an allowance of interest on any ‘amount’ of damages awarded for the matters specified in paragraphs (a), (b) and (c). An award of damages (or, equally, an award of compensation) may include components, some of which will attract interest, while others will not. In this context, the subsection refers to an ‘amount so included’, that is, to an amount forming part of an award of damages. In my view, such an ‘amount’ may be distinguished from the ‘sum’ for which judgment is entered. Apart from the amounts that fall within the exclusions in s 60(3), s 60(1) provides for an award of interest on the total or the ‘sum’ of the amounts that make up the award of damages.
In personal injuries cases, an award of damages expressed as $x will commonly be made up of a number of components, being discrete amounts for medical expenses, lost income, damages for pain and suffering and so on. In some cases it will include exemplary or punitive damages. Some of these components — such as medical expenses already incurred and lost earnings up to the time of trial — will be readily quantifiable and the quantum uncontroversial. In proceedings in which the overarching obligations in the Civil Procedure Act 2010 to take steps to resolve or determine the dispute[25] or to narrow the issues in dispute[26] are observed, the parties will seek to relieve the court (or the jury) of the need to adjudicate on those heads of loss by agreeing the quantum of loss or damage.
[25]Civil Procedure Act 2010 (Vic) s 19.
[26]Ibid s 23.
In proceedings for compensation for compulsory acquisition under the LAC Act or for planning blight under Part 5 of the PE Act, the legislation confers a right to compensation by reference to a number of elements or aspects of loss.
In assessing compensation for the compulsory acquisition of land, s 41(1) of the LAC Act requires regard to be had a number of ‘factors’, including the market value of the land, any special value to the claimant, any loss attributable to severance or disturbance, legal, valuation and other professional expenses and so on. Where applicable, these factors will appear in a claim for compensation as separate ‘heads of claim’, each of which must be considered in assessing the total amount of compensation payable by the Authority for the divestment or diminishment of an interest in land. Under Part 5 of the PE Act, an entitlement to compensation can arise in a variety of ways under s 98, and there are separate provisions giving entitlement to compensation for such things as loss on sale, any effect on residence and the expenses involved in preparing and submitting the claim. In a notice of claim filed pursuant to the requirements of s 37 of the LAC Act, claims made pursuant to the provisions of Part 5 of the PE Act will be articulated and treated in the same way as heads of claim in a dispute over compensation in a compulsory acquisition.
When the Court determines the amount of compensation to be paid to a person whose interest in land has been affected by a compulsory acquisition or the reservation of land for a public purpose, the Court makes an award of compensation that is the sum of the amounts determined to be payable in respect of each head of claim, less any amounts that have already been advanced by the Authority or planning authority.
The Court below formulated its orders consistently with this requirement. Order 1 is in the following form:
There be an award of compensation to the defendants in the sums of:
a.$9,056,600.00 for loss on resale under s 98(1) of the Planning and Environment Act 1987 (Vic) (‘PE Act’);
b.$75,992.00 for legal, valuation and other expenses reasonably incurred in preparing and submitting the claim under s 101 of the PE Act;
c.$60,000.00 for increased compensation not exceeding 10% of the compensation payable in relation to the property ‘Arva’, 1645 Boundary Road, Mt Cottrell under s 100 of the PE Act,
which is satisfied in part by the advances of compensation paid by the plaintiff to the defendants in the sums of $7,705,000.00 paid on 27 June 2017 and $1,427,592.00 paid on 2 October 2017.
Order 1, although expressed to be for three separate ‘sums’, treats those amounts in aggregate by deducting the advances of compensation made by the applicant from the total amount of compensation awarded for the three heads of claim.
Likewise, Order 2, which deals with interest, aggregates amounts agreed on or assessed for the different heads of claim. It is broken down, not according to the amounts referrable to the separate heads of claim, but as a function of the dates upon which advances were made, the advances being ‘netted off’ against the total amount of compensation awarded.
In other words, the judge below made an order for compensation that ‘embraced’ the agreed quanta for loss on sale and s 101 expenses, as well as the controversial payments for effect on residence and interest. The award for which judgment was given in this case was a single award in respect of a disputed claim referred to the Court.
It is true that s 60(2)(d) of the Supreme Court Act uses the words ‘any sum’ rather than ‘the sum’. However, it would be grammatically awkward for the provision to read, ‘Nothing in this section authorises the allowance of any interest otherwise than by consent on the sum for which judgment is entered or given by consent’. There may be no such sum. The use of the words, ‘any sum’ results from the fact that the consent is a contingency: the bar applies only if and when such a judgment is given or entered.
The words ‘any sum’ are scattered throughout s 60(2). Paragraph (b) refers to ‘any sum’ on which interest is recoverable as of right; paragraph (e) refers to ‘any sum’ on which interest might be awarded by virtue of s 58 or s 59. The sums in those sections are sums representing ‘sums certain’, the value of converted goods and monies receivable. In each case, the ‘sum’ will be the monetary amount payable or receivable as a result of a successful cause of action.
In my view, ‘any sum’ has an ambulatory meaning, depending on the context in which judgment is given and the nature of the damages that are awarded. In the context of a claim for compensation brought under the provisions of the LAC Act as applied by Part 5 of the PE Act, the ‘sum’ for which judgment must have been entered by consent is the award of compensation, not the individual amounts referrable to particular heads of claim making up that ‘sum’.
Such a construction is consistent with the beneficial purpose of s 60(1) of the Supreme Court Act, which is ‘providing with particularity (ss 58 and 59) and then more generally (s 60), for the award of interest to compensate parties who have been obliged to take “proceedings” to recover a money sum and who in the meantime have been kept out of moneys which they could otherwise have used or upon which they could otherwise have earned interest.’[27]
[27]Victorian WorkCover Authority v Esso Australia Ltd (2001) 207 CLR 520, 546.
In this case, Mr Morton’s interest in his land was affected by the imposition of a reservation for a public purpose. The use and development of his land was severely compromised and its value was significantly diminished by the imposition of the POA. Mr Morton could have waited for the land to be compulsorily acquired, in which case he would have been entitled to compensation and generous interest on amounts payable in accordance with the LAC Act. However, he plainly considered that his best option was to realise the loss by selling the land and to obtain compensation, and it was open for him to do so. Following the sale of the land on 11 November 2015, Mr Morton[28] was then kept out of the compensation to which he was entitled until the payment of the advances and, finally, judgment. Because of the particular statutory arrangements for compensation in the PE Act, Mr Morton was not entitled to any interest for the period he was kept out of his money prior to the commencement of proceedings.
[28]And subsequently his estate.
The interpretation of s 60(2)(d) of the Supreme Court Act that is contended for by the applicant would result in an outcome that does not achieve the objects of an award of interest in compensation cases, in that landowners seeking compensation for the imposition of reservations on their land for public purposes, having made efforts to reduce the issues in dispute, would be denied compensation for being kept out of monies to which they were entitled, sometimes for a period of years.
As the parties submitted, the paragraphs in s 60(2) of the Supreme Court Act generally operate to prevent the award of interest where interest has already been paid or factored in to the debt or damages in question. The prevention of double-dipping does not, however, appear to be the purpose of the exclusion in s 60(2)(d). The Court was taken in some detail through the history of s 60 and s 60(2)(d) in
particular.[29] This historical review was useful but did not shed any light on the purpose of s 60(2)(d). Having regard to its content, however, it is tolerably clear that s 60(2)(d) is directed to ensuring finality in litigation where the parties have reached agreement in a proceeding and caused judgment to be entered or given by consent without the need for adjudication by the Court. As was stated by Lord Herschell LC in Re South American and Mexican Co, ex p Bank of England:
A judgment by consent is intended to put a stop to litigation between the parties, just as much as is a judgment which results from the decision of the court after the matter has been fought out to the end.[30]
[30]Re South American and Mexican Co, ex p Bank of England [1895] 1 Ch 37 CA, 50 cited in Spencer Bower and Handley Res Judicata (Lexis Nexis, 4th ed) 21 [2.17].
Preventing parties who have otherwise resolved a dispute by agreement and had judgment entered or given accordingly from returning to court and seeking an adjudication and further orders on interest alone achieves the objective of finality. However, where there has been agreement between the parties as to only a part of a claim, that purpose is not defeated by giving the parties the opportunity to seek an award of interest on the overall sum of compensation that is determined, including on the agreed amounts.
Conclusion
The Court below did not err in allowing interest on the agreed amounts totalling. Proposed grounds 1 and 2 are not made out.
Leave to appeal should be granted in respect of both proposed grounds but the appeal dismissed.
ALMOND AJA:
I have also had the considerable benefit of reading the draft reasons of Emerton JA. I agree, for the reasons her Honour gives, that leave to appeal should be granted and the appeal dismissed.
Law Reform (Miscellaneous Provisions) Act 1934 (UK) ch 41; United Kingdom Law Revision Committee, Second Interim Report (1936); Interest on Damages (Scotland) Act 1958 (UK)
ch 61; Chief Justice of Victoria’s Law Reform Committee, Minutes of Meeting (30 March 1960); Chief Justice of Victoria’s Law Reform Committee, Interest on Debt and DamagesSub-Committee, Report (1959); Statute Law Revision Committee upon Interest on Judgments, Legislative Assembly of Victoria, Report (1961).
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