Raffoul v Fresh 2 U Pty Ltd - [2013] VSC 374

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. S CI 2012 02364

BETWEEN

KAMIL RAFFOUL (T/AS TTECHNIQUE BUSINESS BROKERS)	Plaintiff
V
FRESH 2 U PTY LTD ACN 068 546 109 & ORS	Defendants

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JUDGE:	SIFRIS J
WHERE HELD:	Melbourne
DATE OF HEARING:	19 July 2013
DATE OF JUDGMENT:	26 July 2013
CASE MAY BE CITED AS:	Raffoul v Fresh 2 U Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2013] VSC 374

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JUDGMENT – Interest – Whether interest payable from date debt due or date of later demand – Supreme Court Act 1986 (Vic) s 58(1).

COSTS – Whether indemnity costs payable.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M Gronow	Seoud Solicitors
For the Defendants	Mr D Baker	George Liberogiannis & Associates

HIS HONOUR:

On 14 June 2013 I published my reasons for deciding that the plaintiff was entitled to commission from the defendants pursuant to an Agency Agreement entered into between the plaintiff and the defendants on 1 May 2011.[1] The commission was an agreed fixed commission of $1 million plus GST. In the published reasons I indicated that I would hear from the parties in relation to interest and costs. On 19 July 2013 I heard argument in relation to interest and costs.
[1]Raffoul v Fresh 2 U Pty Ltd & Ors [2013] VSC 308 (‘Judgment’). Defined terms in these reasons are the same as those defined in the Judgment.

Interest

The plaintiff submitted that he was entitled to interest pursuant to the Agency Agreement. Clause 13.4 of the Agency Agreement is in the following terms:

13.4 The Vendor will be liable to pay the Agent
(a)interest upon any monies that are due under this Authority, at a rate two percent higher than the rate prescribed from time to time under the Penalty Interest Rates Act 1983 (Vic): and
(b)any legal costs incurred in recovering any monies due, on a full indemnity basis.

The plaintiff submitted that the commission sum of $1.1 million (including GST) is and remains due as a debt. It was submitted that pursuant to s 58(1) of the Supreme Court Act1986 (Vic) (‘the Act’), the plaintiff has recovered “a debt or sum certain”, and is accordingly entitled to interest from the date when the sale of business agreement was executed on 14 November 2011. On this date the plaintiff became entitled to his commission under the Agency Agreement. The plaintiff is in any event, it was submitted, entitled to interest from that date pursuant to clause 13.4(a) of the Agency Agreement.

The rate prescribed under the Penalty Interest Rates Act1983 (Vic) has since 1 February 2010 been 10.5%.[2] Under the Act the plaintiff is entitled to interest not exceeding 10.5%. However, under clause 13.4(a) of the Agency Agreement, the plaintiff is entitled to interest at a rate 2% higher than that prescribed under the Penalty Interest Rates Act1983 (Vic), namely 12.5% per annum.
[2]See Government Gazette No 2, 14 January…

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.

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Details

Case: [2013] VSC 374
Decision Date: 26 July 2013

CaseChat Overview and Summary

Raffoul v Fresh 2 U Pty Ltd involved a dispute between the plaintiff, Raffoul, and the defendant, Fresh 2 U Pty Ltd, over the amount of interest payable on a debt. The matter was heard in the Supreme Court of Victoria. Raffoul sought interest from the date the debt became due, while Fresh 2 U Pty Ltd argued that interest should only accrue from the date of the demand for payment. The court had to determine the applicable statutory provisions and whether indemnity costs were payable.

The primary legal issue was the interpretation of Supreme Court Act 1986 (Vic) section 58(1), which governs the calculation of interest on overdue debts. The court needed to ascertain whether interest should be calculated from the date the debt was due or from the date a demand for payment was made. This required a close examination of the language of the statute and relevant case law. The court also had to consider whether the plaintiff was entitled to indemnity costs for the proceedings.

The court found that under the Supreme Court Act, interest should accrue from the date the debt was due, not from the date of the demand for payment. The court reasoned that the statutory language clearly specified that interest is payable from the due date, and there was no ambiguity in the provision. The court also determined that the plaintiff was not entitled to indemnity costs, as the matter did not meet the stringent criteria for such an award. The defendant was ordered to pay interest from the date the debt became due, but not the indemnity costs.

The court ordered Fresh 2 U Pty Ltd to pay interest on the overdue debt from the date it became due, in accordance with the statutory provisions. The defendant was not liable for indemnity costs.

Orders