PSAL Pty Ltd v Raja
[2016] WASC 295 (S)
•1 DECEMBER 2016
PSAL PTY LTD -v- RAJA [2016] WASC 295 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WASC 295 (S) | |
| Case No: | CIV:2406/2012 | 1 DECEMBER 2016 | |
| Coram: | PRITCHARD J | 1/12/16 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Application for payment of interest dismissed Plaintiff to pay the claimant's costs of the interpleader | ||
| B | |||
| PDF Version |
| Parties: | PSAL PTY LTD FAYYAZ AHMAD RAJA DAYANG RAIHAN PANGRIAN HAJI AHMED RAFFAE |
Catchwords: | Practice and procedure Interpleader Interest Whether Court may award interest on the sum the subject of an interpleader Practice and procedure Interpleader Costs |
Legislation: | Supreme Court Act 1935 (WA), s 32(1), s 32(2) Rules of the Supreme Court 1971 (WA), O 17 r 15 |
Case References: | B.P. Benzin Und Petroleum v European-American Banking Corporation [1978] 1 Lloyd's Rep 364 Howell v Dawson (1884) 13 QBD 67 Lunt v WRS Pacific Pty Ltd [2002] WASC 27 PSAL Pty Ltd v Raja [2016] WASC 295 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
FAYYAZ AHMAD RAJA
Defendant
DAYANG RAIHAN PANGRIAN HAJI AHMED RAFFAE
Claimant
Catchwords:
Practice and procedure - Interpleader - Interest - Whether Court may award interest on the sum the subject of an interpleader
Practice and procedure - Interpleader - Costs
Legislation:
Supreme Court Act 1935 (WA), s 32(1), s 32(2)
Rules of the Supreme Court 1971 (WA), O 17 r 15
Result:
Application for payment of interest dismissed
Plaintiff to pay the claimant's costs of the interpleader
Category: B
Representation:
Counsel:
Plaintiff : No appearance
Defendant : No appearance
Claimant : Mr R G S Harrison
Solicitors:
Plaintiff : No appearance
Defendant : No appearance
Claimant : Tottle Partners
Cases referred to in judgment:
B.P. Benzin Und Petroleum v European-American Banking Corporation [1978] 1 Lloyd's Rep 364
Howell v Dawson (1884) 13 QBD 67
Lunt v WRS Pacific Pty Ltd [2002] WASC 27
PSAL Pty Ltd v Raja [2016] WASC 295
- PRITCHARD J:
(This judgment was delivered extemporaneously on 1 December 2016 and has been edited from the transcript.)
1 On 16 September 2016, I published reasons resolving an interpleader proceeding brought by the sheriff. The following reasons should be read together with those reasons (the Interpleader Reasons)1. The same abbreviations are used herein.
2 The interpleader proceeding concerned the question of who was entitled to funds seized by the sheriff pursuant to a property seizure and sale order. (Those funds (the funds) were paid into court at the commencement of the interpleader proceeding.) The funds seized were the proceeds of the sale of lot 103, which sale had been conducted by Bankwest (the registered mortgagee) following a default by the registered proprietor and mortgagor, Mr Raja. Both Mrs Raffae and PSAL claimed an equitable interest in lot 103 and thus in the surplus proceeds of its sale. Mr Raja did not participate in the interpleader proceeding. I determined that Mrs Raffae was entitled to the funds. I made an order to that effect.
3 Mrs Raffae now seeks two orders from the Court (the Application), namely:
(1) an order that interest on the sum of $760,163.92 at the rate of 6% per annum be paid by PSAL, as from 17 April 2013 to the date of payment of the funds to Mrs Raffae or her representative; and
(2) an order that PSAL pay Mrs Raffae's costs of the interpleader proceeding to be taxed as an action if not agreed.
4 For the reasons which follow, Mrs Raffae's application for an order for the payment of interest should be refused. However, PSAL should pay Mrs Raffae's costs of the interpleader proceeding.
The question of interest
5 I am not persuaded that the Court has power to make an award of interest as against PSAL. Counsel for Mrs Raffae pointed to two sources of power which he contended would support an order for the payment of interest. In my view, neither supports such an order.
6 The first source of power on which Mrs Raffae relies is s 32(1) of the Supreme Court Act 1935 (WA) (the Act). That section provides that:
In any proceedings for the recovery of any money (including any debt or damages or the value of any goods), the Court may order that there shall be included, in the sum for which judgment is given, interest at such rate as it thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date when the judgment takes effect.
7 In my view, that section does not support an order for the payment of interest in this case for several reasons.
8 First, the interpleader proceeding in which both Mrs Raffae and PSAL made a claim to the funds, cannot, in my view, properly be characterised as 'proceedings for the recovery of any money'. No proceedings were, in fact, brought by Mrs Raffae at all. Instead, the interpleader proceeding was commenced by the sheriff, knowing that there were competing claims to the funds. Both Mrs Raffae and PSAL submitted to the Court, and acted on the basis, that they were entitled to the funds.
9 That the phrase 'proceedings for the recovery of any money' does not include an interpleader proceeding is, in my view, supported by other words in s 32 of the Act. The final words of s 32(1) refer to the payment of interest between the date when the cause of action arose and the date when the judgment takes effect. In this case, Mrs Raffae did not proceed on the basis of any cause of action as against PSAL. There were no dealings as between them directly. Instead, Mrs Raffae's cause of action (if she had one) was against Mr Raja and was a claim to an equitable interest in lot 103 as a result of Mr Raja's failure to transfer lot 103 to Mrs Raffae, in accordance with a contract between them for the sale of that land. The argument advanced by Mrs Raffae in the interpleader proceeding was that this equitable interest could be then traced through to the funds. The point for present purposes, however, is that there was no cause of action as between Mrs Raffae and PSAL.
10 Furthermore, the examples set out in s 32(1) and, indeed, in s 32(2) of the Act of proceedings for the recovery of any money are not proceedings akin to an interpleader proceeding. Section 32(1) of the Act provides:
(1) In any proceedings for the recovery of any money (including any debt or damages or the value of any goods), the Court may order that there shall be included, in the sum for which judgment is given, interest at such rate as it thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date when the judgment takes effect.
(2) This section does not -
(a) authorise the giving of interest upon interest; or
(aa) apply in relation to any general damages in respect of pain and suffering or the loss of the enjoyment or of the amenities of life awarded in relation to personal injury or the death of a person; or
(b) apply in relation to any debt upon which interest is payable as of right whether by virtue of any agreement or otherwise; or
(c) affect the damages recoverable for the dishonour of a bill of exchange.
(2a) In subsection (2)(aa) personal injury includes any disease and any impairment of a person’s physical or mental condition.
11 Section 32(2) refers to instances which the power to award interest under s 32(1) does not apply, including cases of general damages for pain and suffering, and debts upon which interest is payable as of right. The nature of those exclusions does not assist Mrs Raffae's claim that 'proceedings for the recovery of any money' in s 32(1) includes interpleader proceedings of the kind here.
12 Finally, I should observe that Mrs Raffae was unable to point to any authority which would suggest that the court has a power to make an order for the payment of interest in an interpleader proceeding pursuant to s 32(1) of the Act.
13 The second basis on which it was said that the court has a power to order the payment of interest in an interpleader proceeding was O 17 r 15 of the Rules of the Supreme Court 1971 (WA) (RSC). That rule provides that:
Subject to rules 1 to 11, the Court may in and for the purposes of any interpleader proceedings make such order as to costs or any other matter as it thinks just.
14 Counsel for Mrs Raffae submitted that the words 'or any other matter' were sufficiently broad to encompass an order for the award of interest as against the unsuccessful party in interpleader proceedings.
15 There appears to be little authority on the extent of the power referred to in O 17 r 15 RSC. Such authority as there is suggests that the power there referred to, apart from the power to order costs, is the court's power to craft orders resolving the outcome of the interpleader proceedings. That is, the court has power to make orders to facilitate its resolution of questions of entitlement to title to goods, or to funds, taking into account particular circumstances. It does not appear that the orders contemplated in O 17 r 15 extend to orders for relief which would go beyond the subject matter of the interpleader proceeding itself. Two authorities appear to demonstrate that point.
16 First, in Howell v Dawson,2 the court was dealing with an interpleader proceeding in respect of the title to goods. The goods had been seized in the course of the execution of a judgment by the sheriff on behalf of a judgment creditor. The goods were used in a business. A competing claim to the title to the goods was made by the wife of the owner of the business. It appears from the report of the case that the usual order in an interpleader proceeding at that time was that, unless money was paid into court, there would be an order for the sale of the goods the subject of the interpleader. It was submitted that if the goods were sold by the sheriff, they would be sold below their value and the business would fail. An application was made to the court that a receiver should be appointed, rather than the usual order for the sale of the goods. The application was refused and that decision was appealed. The appeal was upheld and an order for the appointment of receiver at the claimant's expense was made. In upholding the appeal, the court appears to have accepted that the usual order (for the sheriff to sell the goods the subject of the interpleader) would do a great injury to the business, whereas the court had power to take an alternative course which would avoid that injury. That appears to me to provide an example of the court making an order which crafted the relief with respect to the subject of the interpleader proceeding - in that case, the goods themselves - so as to accommodate the just resolution of the dispute in all of the circumstances.
17 The only other authority that seems to be apposite is B.P. Benzin Und Petroleum v European-American Banking Corporation.3 In that case, an issue was raised as to whether the orders that were sought on the interpleader proceedings should be made, as they would have implications for third parties. Lord Denning M. R. observed:4
The arguments raise a point for consideration as to the jurisdiction of the Court on interpleader issues.
Mr. Justice Goff gave a wide interpretation to R.S.C., 0.17, r.8 of the rules [the English equivalent of O 17 r 15 RSC], which says:
... the Court may in or for the purposes of any interpleader proceedings, make such order as to costs or any other matter as it thinks just.
That order has been construed widely. It is quite clear that the Court can make an order for sale of the property if need be, certainly if it is pledged, and if it is not pledged it can be sold. The case of Paquin Ltd. v. Robinson: Viola, (1901) 8S L.T. shows that property can be sold, not merely perishable goods but other property. That is a clear interference with rights.
But I would put it wider than that. It seems to me under the inherent jurisdiction of the Court, when an interpleader is taken out, the Court can make such order as it thinks just in the matter even though it does interfere with the rights of the parties if that is the just solution of the case. On this wider interpretation, it seems to me the order made by Mr. Justice Goff can certainly be justified. There he points out that these disbursements are disbursements which have been paid out - they are obligations of the ship owning company - in order to earn the charter hire. Surely it is only fair and just that those disbursements and expenses should come out of the moneys which have been accumulating, such as those which have been paid into the joint account in the interpleader issue.
It seems to me the justice of the case is as Mr. Justice Goff has said, and I think the jurisdiction of the Court, whether put under the rules or under the inherent jurisdiction, is ample for the Court to do what is right and just.
18 As the observations of Lord Denning make clear, the orders that were made in that case were orders which would affect the subject matter of the interpleader proceeding. They were not orders that went beyond that subject matter so as to require further payments of money by the parties (to the interpleader proceeding). (In the case of costs, I digress to note that the power to order one party to pay the other's costs is expressly spelled out in O 17 r 15 RSC.)
19 Having regard to these authorities and to what they reveal about the extent of the court's power in O 17 r 15 RSC, I am not persuaded that that rule is a source of a power to make an order for the payment of interest, as is sought here. The application for an order for the payment of interest will therefore be dismissed.
The question of costs
20 There is no question in respect of the court having a power to make an order for costs. That is confirmed by O 17 r 15 RSC, which states that the court can make 'such order as to costs ... as it thinks just'.
21 I am persuaded that it is open to make an order for the payment of Mrs Raffae's costs against PSAL and that it would be just to make that order.
22 The question for resolution on the interpleader proceeding concerned the competing claims by Mrs Raffae and PSAL to priority of their equitable interests in the funds. It was open to each of the parties to make an assessment of the strength of their competing claims and to determine whether to proceed with their own claim, knowing that if they were unsuccessful, they could face cost orders. I see no reason for distinguishing this case from the ordinary situation where the court deals with costs in actions between parties where the unsuccessful party will, as a starting point at least, be required to pay the costs of the successful party.
23 There is certainly no conduct on the part of Mrs Raffae which would disentitle her to a costs order in her favour. There is, however, one authority which I should mention for completeness, and that is Lunt v WRS Pacific Proprietary Ltd.5 In that case, the sheriff, pursuant to a writ of fieri facias, seized certain assets from a house, and competing claims were then made in respect of those assets. The sheriff filed an interpleader summons and the parties proceeded to have their dispute resolved by the court. At issue was a claim by the plaintiff that the goods were not owned by the plaintiff, but instead by a family trust. The defendant contested that basis for a claim of entitlement to the goods. Master Bredmeyer concluded that there should be no order as to costs. He said:6
I do not blame the defendant for having contested this interpleader summons. How was it to know that the chattels found in Mr Lunt's house were owned by his family trust? Further, there is no particular reason why the defendant should have withdrawn its claim to ownership at an earlier stage when the 1994 trust deed could not be found. In the circumstances, there will be no order as to costs.
24 That case, it seems to me, is distinguishable from the present case. The evidence to which I referred in the Interpleader Reasons suggested that PSAL was fully aware of the basis for Mrs Raffae's claim to entitlement to the funds. PSAL was, no doubt, in a position to make its own assessment of the strength of that claim vis-à-vis its own claim to entitlement to the funds. In that context, it determined that it wished to proceed to contest the claim in the interpleader proceeding. In all of those circumstances, it seems to me that the just outcome is that, having taken that course of action, PSAL should pay Mrs Raffae's costs, to be taxed if not agreed.
PSAL's failure to attend the hearing
25 The only other matter which I should mention is the fact that the hearing of the Application today proceeded in circumstances where there was no appearance on behalf of PSAL. That appears to have occurred, in part, because PSAL is no longer represented by solicitors. At a hearing on 11 October 2016, I made orders that PSAL's former solicitors had ceased to act for the company. On that occasion, I did not deal with the Application in order to give PSAL the opportunity to engage further legal representation if it so wished, and to be heard in respect of the Application. I therefore adjourned the Application to a special appointment today. I did so in circumstances where I requested that PSAL's former solicitors draw to PSAL's attention the fact that if there was no appearance for PSAL on this occasion, orders could be made in its absence. I am satisfied that the former solicitors for PSAL did draw that matter to PSAL's attention and served PSAL with a copy of the orders I made which indicated that the special appointment would be proceeding today. In those circumstances, I formed the view that it was appropriate to proceed today, notwithstanding that there was no appearance by PSAL.
Order made
26 I will make an order in terms of O 2 of Mrs Raffae's minute of proposed orders dated 4 October 2016, namely that the plaintiff pay the claimant's costs of the interpleader proceeding to be taxed as an action if not agreed.
1PSAL Pty Ltd v Raja [2016] WASC 295.
2Howell v Dawson (1884) 13 QBD 67.
3B.P. Benzin Und Petroleum v European-American Banking Corporation [1978] 1 Lloyd's Rep 364.
4B.P. Benzin Und Petroleum v European-American Banking Corporation [1978] 1 Lloyd's Rep 364, 366.
5Lunt v WRS Pacific Pty Ltd [2002] WASC 27.
6Lunt v WRS Pacific Pty Ltd [2002] WASC 27 [5] (Bredmeyer M).
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