(re McDonald) Amaca Pty Ltd v CSR Ltd (No 2)

[2007] NSWDDT 31

Dust Diseases Tribunal

of New South Wales

CITATION:	(re McDonald) Amaca Pty Ltd v CSR Ltd (No 2) [2007] NSWDDT 31
PARTIES:	Amaca Pty Ltd (Cross-Claimant) CSR Ltd (Cross-Defendant)
MATTER NUMBER(S):	85/91/1; 90/91/1 of
JUDGMENT OF:	O'Meally P
CATCHWORDS:	Dust Diseases Tribunal :- Cross-Claim - Judgment for Cross-Claimant - Delay in prosecuting Cross-Claim - Claim for interest - Whether delay should reduce interest
CASES CITED:	Kalls Enterprises Pty Ltd (in liquidation) & Ors v Baloglow and Anor (No 3) [2007] NSWCA 298; John Fairfax and Sons Ltd v Kelly (31 March 1987, unreported, BC8701464)
DATES OF HEARING:	11 December 2007
DATE OF JUDGMENT:	11 December 2007
EX TEMPORE JUDGMENT DATE:	11 December 2007
LEGAL REPRESENTATIVES:	Mr J C Sheller instructed by Holman Webb appeared for the Cross-Claimant Mr F Corsaro, SC instructed by Toomey Pegg Drevikovsky appeared for the Cross-Defendant

JUDGMENT:

O'MEALLY P

1. On 14 September 2007 reasons were delivered in these cross-claims. It was declared that Amaca Pty Ltd (Amaca) was entitled to judgment and the parties were directed to bring in short minutes specifying the amount to be paid to Amaca, taking into account the opinion that the cost of bringing two witnesses from the United States to give evidence in the plaintiff’s action should not be allowed. The parties have not yet handed up short minutes, but today I am required to arbitrate upon a claim for interest. It has now been agreed, however, that in each of the two cross-claims the judgment amount is $129,554.08. What remains in dispute is the amount of interest claimed by Amaca on the judgment sum in each of the two cases.

2. CSR Ltd (CSR) argues that no interest should be payable after 7 May 2001, or perhaps a month or two after that date. The significance of that date is that it was the day upon which Bergin J delivered judgment in the Supreme Court of New South Wales in a cross-claim between CSR and Amaca in respect of an action brought by one Joseph Welch against Amaca. That cross-claim was also based on the same partnership deeds. As appears from her Honour's reasons in that case, there was a large number of cases between Amaca and CSR which arose out of the partnership. Following her Honour's decision, 98 cross-claims between Amaca and CSR were consolidated. They were settled in 2005. Now, approximately 40 cross-claims arising out of the partnership remain outstanding in this State.

3. Mr McDonald’s statement of claim was issued on 2 July 1991. He died on 15 July 1991. On 21 April 1997 the proceedings were reconstituted and Mr McDonald’s widow was substituted as his legal personal representative. In addition to the defendants initially named, by amended statement of claim, the plaintiff sued James Hardie and Coy Pty Ltd (James Hardie) and three other corporations. Her claims against all defendants other than James Hardie, were settled. On 10 June 1997 James Hardie (now Amaca) issued a cross-claim against CSR. Defences to that cross-claim were filed on 10 September 1997. It was thus more than ten years after the cross-claim that Amaca obtained judgment.

4. Relying upon the decision of the Court of Appeal in Kalls Enterprises Pty Ltd (in liquidation) & Ors v Baloglow and Anor (No 3) [2007] NSWCA 298 Amaca says it is entitled to interest for the whole period claimed. Here it should be observed the rate at which interest should be paid, has been agreed.

5. Whilst acknowledging there has been delay, Amaca says that that delay does not constitute a reason for reducing the period during which interest should be allowed. It says the delay was occasioned by this being but one of a large number of cross-claims arising out of the partnership and by the attempts to settle the others extra-curially. It might also be observed that the Tribunal always gives priority to plaintiffs’ claims and often vacates hearings of cross-claims to deal with urgent plaintiffs’ claims. The hearing of this cross-claim was not, however, vacated to allow a plaintiff’s claim to be heard.

6. In Kalls the Court constituted by Giles, Ipp and Basten JJA said:

10. Delay is ordinarily not a reason for refusing or reducing the inclusion of interest. The defendant has had the use of the money, and the plaintiff has been out of its use and should be compensated accordingly. The purpose is to compensate the plaintiff for being kept out of its money. ... Interest should be included unless good cause be shown, in order to fulfil the purpose. …
11. Delay can nonetheless be relevant to the exercise of the discretion. …

7. In that case their Honours did not accept that there was unreasonable delay of itself warranting reduction in interest. The delay had been from 1993 to 2006. In [12] of the judgment they said:

12. … Although the passage of time was greater than desirable, it was not so great that unreasonable failure to bring and prosecute the claim against Mr Baloglow in a timely manner should be inferred,…. Unreasonable failure needed to be positively demonstrated, and it was not.

8. Amaca says that CSR should have produced evidence to demonstrate that there was an injustice, and it failed to do so. CSR on the other hand, relying on the material beginning in the second sentence of [11] of the judgment in Kalls says that the award of interest for the whole period to it would constitute an injustice. Those words are:

11. … For example, unreasonable delay and a high interest rate may mean that the defendant is unjustly left as the source of the plaintiff's investment income. The question is one of injustice to the defendant. If the interest rates used by the plaintiff exceed commercial rates (although commercial interest rates are an imprecise criterion, ... ), the plaintiff's self inflicted loss of use of money may be unfairly made a burden on the defendant.

9. I think it should be emphasised that there is agreement between the parties on the rates of interest which should be allowed; the question here is whether interest should not be payable after a particular date.

10. Mr Corsaro SC has referred me to the observations of McHugh JA (as he then was) in John Fairfax and Sons Ltd v Kelly (31 March 1987, unreported, available at BC8701464). In the penultimate paragraph of his reasons McHugh JA said:

... I think that prima facie the plaintiff is entitled to interest on the basis that the verdict represents loss spread over the period from the date of publication to the trial. I say prima facie because the learned trial judge thought that, by reason of the plaintiff's delay in commencing and more importantly prosecuting the action, it would be prima facie unfair to award interest over the whole period. He said that he would not have awarded interest for more than three years. I see no reason to differ from his Honour's view on this point.

11. I do not find that observation of particular assistance in the circumstances of this case. The general rule is to award interest unless special circumstances exist. The fact is that CSR has had the use of the money and Amaca has been out of its use and, in the words of their Honours in Kalls, it should be compensated accordingly. With due respect to Mr Corsaro, I reject the argument of CSR.

12. I direct the parties to bring in short minutes after having calculated, if they have not already done so, the interest payable in accordance with these reasons.

13. In each case there will be judgment for the cross-claimant against the seventh cross-defendant in the sum of $129,554.08 together with interest of $148,511.30 in each case.

14. In each case I make orders 1 to 4 as in short minutes of order filed in court 11 December 2007.

Mr J C Sheller instructed by Holman Webb Appeared for the Cross-Claimant

Mr F Corsaro, SC instructed by Toomey Pegg Drevikovsky appeared for the Cross-Defendant