MLC Nominees Pty Ltd v Daffy [No 2]
[2018] VSCA 10
•2 February 2018
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2016 0153
| MLC NOMINEES PTY LTD and MLC LIMITED | Appellants |
| v | |
| KEVIN ADRIAN DAFFY (NO 2) | Respondent |
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| JUDGES: | BEACH and McLEISH JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 2 February 2018 |
| DATE OF JUDGMENT: | 2 February 2018 |
| MEDIUM NEUTRAL CITATION: | [2018] VSCA 10 |
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PRACTICE AND PROCEDURE – Judgments, declarations and orders – Repayment of judgment sum following successful appeal – Interest – Interest on judgment sum repayable following successful appeal – Rate of interest – Whether successful appellant entitled to interest at penalty rates – Whether successful appellant only entitled to interest at restitutionary rates – Supreme Court Act 1986, ss 58, 60 and 101.
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| APPEARANCES: | Counsel | Solicitors |
| For the Second Appellant | Mr P B Murdoch QC | Norton Rose Fulbright Australia |
| For the Respondent | No appearance |
BEACH JA
McLEISH JA:
On 17 October 2016, a judge of the Trial Division gave judgment for the respondent in the sum of $1,521,071.64 together with interest calculated to 8 November 2016 in the sum of $344,568.02. On 3 November 2016, the second appellant paid into the trust account of the respondent’s then solicitor the sum of $1,865,640 in satisfaction of the judgment (‘the judgment sum’).
On 15 May 2017, this Court set aside the judgment below and in lieu thereof gave judgment for the appellants.[1] At the time this Court delivered judgment, no mention was made of the fact that the second appellant had paid the judgment sum. Moreover, no order was sought by the appellants for the repayment of the judgment sum or for any interest in respect of it.
[1]MLC Nominees Pty Ltd v Daffy [2017] VSCA 110 (Beach and McLeish JJA and Keogh AJA).
The second appellant has demanded the repayment of the judgment sum and interest from the respondent. To date, no amount has been paid by the respondent. The second appellant now seeks an order that the respondent repay the second appellant the amount of the judgment sum together with interest. In documents exchanged between the parties, the second appellant particularised its claim for interest, claiming interest from 22 May 2017 ‘calculated at the penalty interest rate’. In a minute of a proposed order, the second appellant gave notice to the respondent that its claim for interest amounted to $108,360.46.
The respondent has not filed any material in opposition to the second appellant’s application. Notwithstanding service of the application upon him, the respondent did not appear in court this morning.
While it is regrettable that the second appellant did not seek an order for the repayment of the judgment sum at the time that orders were made allowing the appeal, this Court unquestionably has jurisdiction now to make the repayment order sought. The Court possesses this jurisdiction so as to give effect to its order that the appeal from the primary judge be allowed.[2]
[2]See Commonwealth v McCormack (1984) 155 CLR 273, 276–77 (Murphy, Wilson, Brennan, Deane and Dawson JJ) (‘McCormack’); Burke v Gillett [1996] 1 VR 196, 201 (Tadgell J, with whom Ormiston and Smith JJ agreed).
The omission of a repayment order from the order allowing the appeal was due entirely to the failure of the second appellant to inform the Court of the circumstances which made such an order necessary. If the matter had been raised at the time judgment was delivered, such an order would have been made as a matter of course because without such an order the appeal to this Court would be nugatory.[3] In these circumstances, we are persuaded that we should make an order that the respondent repay the judgment sum.
[3]Cf McCormack (1984) 155 CLR 273, 277.
The issue of a successful appellant’s entitlement to interest on a judgment sum repayable following an appeal was considered by this Court in Meerkin & Apel v Rossett Pty Ltd (No 2).[4] In that case, the Court held that where a judgment for debt or damages is set aside on appeal after being complied with, the appellant is entitled, by way of restitution, to interest on the judgment sum paid in accordance with the primary judge’s orders. In Meerkin & Apel it was accepted that the rate of interest payable by a respondent to a successful appellant was not the penalty rate referred to in ss 58 or 60 of the Supreme Court Act 1986, but a rate calculated to restore to the appellant ‘the fruits of the judgment’ and to do justice between the parties – a ‘restitutionary rate’.[5]
[4][1999] 2 VR 31 (Charles, Callaway and Batt JJA) (‘Meerkin & Apel’).
[5]Meerkin & Apel [1999] 2 VR 31, 33–4 [5]–[7].
The second appellant did not adduce any evidence as to an appropriate restitutionary rate of interest on this application. It is, however, notorious, that interest rates over the period of the second appellant’s claim were (and remain) at historically low levels. In the absence of evidence, we are prepared to accept that an appropriate restitutionary rate in this case is two per cent per annum.
Meerkin & Apel is authority for the proposition that a successful appellant in the second appellant’s position is entitled to restitutionary interest from the date that appellant paid the judgment sum pursuant to the primary judgment. As the respondent (who is unrepresented) is only on notice of a claim for interest from 22 May 2017 (rather than from 3 November 2016), we do not propose to order any interest in respect of any period prior to 22 May 2017 – and very fairly none was sought by the second appellant this morning.
For these reasons, we will make an order that the respondent repay the judgment sum to the second appellant together with interest from 22 May 2017 to date ($26,170). As was observed in Meerkin & Apel, an appellant’s entitlement to interest following the making of a repayment order is governed by s 101 of the Supreme Court Act 1986.[6] Thus, interest on any amount outstanding after today will fall to be considered by reference to s 101.
[6]Ibid 36 [14].
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