Public Trustee v CBA (No 2) - [2018] SASC 55

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
PUBLIC TRUSTEE v CBA & ORS (No 2)
[2018] SASC 55
Judgment of The Honourable Justice Bampton
13 April 2018
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - OFFERS OF COMPROMISE, PAYMENTS INTO COURT AND SETTLEMENTS - OFFER OF COMPROMISE OR OFFER TO SETTLE OR CONSENT TO JUDGMENT PURSUANT TO RULES
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - INTEREST ON COSTS
The plaintiff, as executor of a deceased estate, was found to have claims in debt against each of the defendant banks pursuant to contracts between customer and banker. Both defendants were found to be entitled to set off their claims in equity pursuant to indemnities given against the plaintiff's claims. Both defendants filed formal offers of settlement.
Application for pre-judgment interest pursuant to s 30C of the Supreme Court Act 1935 (SA) and costs by plaintiff – whether s 30C applies – whether the amount awarded against each defendant did not exceed the amount prescribed in r 263(2)(g) of the Supreme Court Civil Rules 2006 (SA) – the effect of complying and non-complying formal offers.
HELD:
1. Plaintiff entitled to pre-judgment interest pursuant to s 30C of the Supreme Court Act 1935 (SA).
2. The prohibition in r 263(2)(g) preventing general costs of action being awarded does not apply as the amount (the sum of the debts plus pre-judgment interest) awarded to the plaintiff in this single action brought against the two defendants is in excess of $120,000.
3. The plaintiff is entitled to 80 per cent of its costs of the action against the first defendant on a party/party basis.
4. The plaintiff is entitled to 80 per cent of its costs of the action against the second defendant on party/party basis until 17 November 2016 and that there be no order as to costs of the action as between the parties after 17 November 2016.
Supreme Court Act 1935 (SA) s 30C; Supreme Court Civil Supplementary Rules 2014 (SA) r 208; Supreme Court Civil Rules 2006 (SA) r 30, r 73, r 187, r 188F, r 188G, r 263, referred to.
Duke Group Ltd (In Liq) v Pilmer & Ors (1998) 144 FLR 1; Public Trustee v CBA & Ors [2018] SASC 25, considered.

PUBLIC TRUSTEE v CBA & ORS (No 2)
[2018] SASC 55
Civil: Application for costs
BAMPTON J.

Mary Martin was a customer of the Commonwealth Bank of Australia (“CBA”) and Westpac Banking Corporation trading as Bank SA (“Bank SA”). At the date of her death, she had monies on deposit with each bank. In my judgment delivered on 9 March 2018,[1] I found that the Public Trustee’s, as executor of Mary Martin’s estate, claims in debt against the CBA and Bank SA arise pursuant to contracts between customer and banker. Following Mary Martin’s death on 3 October 2008, the CBA and Bank SA held…

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 Public Trustee v CBA (No 2)

Details

AGLC: Public Trustee v CBA (No 2) [2018] SASC 55
Case: [2018] SASC 55
Decision Date: 13 April 2018

CaseChat Overview and Summary

In this case, the Public Trustee sought a debt from the Commonwealth Bank of Australia (CBA) and Bank SA, following the death of Michael Martin. The dispute arose from funds that were wrongfully paid to Michael Martin, leading to the Public Trustee seeking reimbursement from the banks. The matter was heard in the Supreme Court of South Australia. The primary legal issues before the court were the calculation of the debt owed by the banks, the appropriate rate of interest on pre-judgment economic losses, and the costs associated with the proceedings.

The court determined that the Public Trustee was entitled to a debt from the CBA of $55,432.26 and from Bank SA of $43,384.67. These amounts were calculated after setting off the balances of the respective bank accounts. Regarding pre-judgment interest, the court found that the Public Trustee did not affirm the contractual relationship between the banks and Michael Martin. Therefore, the court awarded simple interest at a rate of five per cent per annum from the dates the respective liabilities fell due until the date of judgment, aligning with section 30C of the Supreme Court Act 1935 (SA).

The court further ruled that interest should be payable on the sum of $55,432.26 from the CBA at five per cent per annum from 19 August 2009 and on the sum of $43,384.67 from Bank SA at the same rate from 23 July 2009. The judgment resulted in the Public Trustee being awarded $79,416.66 from the CBA and $62,325.35 from Bank SA. Regarding costs, the Public Trustee sought its costs on an indemnity basis or alternatively on a solicitor/client basis. However, the court found that general costs were not to be awarded as the amounts awarded did not exceed $120,000, as per rule 263(2)(g) of the Supreme Court Civil Rules 2006 (SA).

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

BAMPTON J

Accordingly, the Public Trustee is entitled to a debt from:1.The CBA of $55,432.26. That is the sum of $69,290.33 less the set-off of 20 per cent being the balance of the CBA account closed on 19 August 2009.2.Bank SA of $43,384.67. That is the sum of $108,461.67 less the set‑off of 60 per cent being the balance of the two Bank SA accounts closed on 23 July 2009.Pre-judgment interest I accept the Public Trustee’s submission that it did not affirm the contractual relationship that had existed between the CBA and Bank SA and Mary Martin. What it did do, after obtaining the grant of probate, was to make demands for payment of the monies that had been wrongfully paid to Michael Martin. As submitted by the Public Trustee, this is not a situation where a continuing right to interest after the dates of closure of the accounts “is recoverable as of right by virtue of an agreement” pursuant to s 30C(4)(b) of the Supreme Court Act 1935 (SA) which remained on foot between the banks and the Public Trustee after the account closures. As such, s 30C of the Supreme Court Act permits me to award simple interest from the date the liability of the banks to pay the amount of the debt fell due, that is when the payments were made to Michael Martin, to the date judgment is entered at the rate of five per cent. There can be only one rate of interest and one period in respect of which that rate is applied pursuant to s 30C.[2][2] Duke Group Ltd (In Liq) v Pilmer & Ors (1998) 144 FLR 1. The appropriate rate for the calculating of interest on pre-judgment economic losses is a matter for determination by the Court. Rule 208 of the Supreme Court Civil Supplementary Rules 2014 (SA) provides that, as a guide only, the Court may calculate interest as follows:(a)in respect of the period from 1 January to 30 June or part of that period in a year, the cash rate of interest last set by the Reserve Bank of Australia before that 1 January, plus 4%. The published rate as at 1 January 2018 was 1.5 per cent. Adding four per cent to this rate results in a pre-judgment interest rate of 5.5 per cent. The Public Trustee seeks only five per cent. Accordingly, in the case of the CBA, I order that interest is payable on the sum of $55,432.26 at the rate of five per cent per annum from 19 August 2009 to the date judgment is entered. In the case of Bank SA, I order interest is payable on the sum of $43,384.67 at the rate of five per cent per annum from 23 July 2009 to the date of judgment. I enter judgment for the Public Trustee against the CBA in the sum of $79,416.66. I enter judgment for the Public Trustee against Bank SA in the sum of $62,325.35Costs of the action The Public Trustee in its pleadings sought its costs of the action on an indemnity basis or alternatively on a solicitor/client basis. During the costs argument the Public Trustee submitted that the starting point is that costs follow the event and prepared draft minutes seeking its costs on a party/party basis. The CBA and Bank SA submitted that the starting point is that general costs are not to be awarded in accordance with r 263(2)(g) of the Supreme Court Civil Rules 2006 (SA) (“the Rules”) which provides that in an action founded on a claim for damages or any other monetary sum, general costs of action are not to be awarded in favour of the successful plaintiff unless the amount awarded exceeds $120,000.

Ratio Decidendi

Legal Principle Established

Established by: BAMPTON J

Full text does not contain this section.