State of Victoria v McIver (No 2)

[2005] VSCA 126

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 3772 of 2003

STATE OF VICTORIA
	Appellant
v.
GARY McIVER & ORS (NO. 2)	Respondents

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JUDGES:	ORMISTON, CALLAWAY and BATT, JJ.A.
WHERE HELD:	MELBOURNE
DATES OF HEARING:	1, 2 & 3 February 2005
DATE OF JUDGMENT:	17 March 2005
DATE OF FURTHER ORDERS:	19 May 2005
MEDIUM NEUTRAL CITATION:	[2005] VSCA 126

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Judgment – Damages in the nature of interest – Whether to be calculated from date of judgment below or date of judgment in Court of Appeal – Successful respondent deprived of fruits of judgment by stay as of right – Rate of  interest – Offers of compromise by respondent, in County Court and on appeal, to settle litigation for less than he ultimately received – Whether costs in Court of Appeal should be on solicitor and client basis – County Court Act 1958, s.74(4) – Supreme Court (General Civil Procedure) Rules 1996, Rule 26.12(4).

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr J. Ruskin, Q.C. with Mr P.C. Golombek	James Syme, Victorian Government Solicitor
For the 1st Respondent	Mr P.G. Priest, Q.C. with Mr J.C. Simpson	Woodhams O’Keeffe & Co.
For the 2nd and 3rd Respondents	Mr D. Masel	Deacons

ORMISTON, J.A.:
CALLAWAY, J.A.:
BATT, J.A.:

1. This appeal and two cross-appeals were heard on 1^st, 2^nd and 3^rd February 2005.  We published our reasons on 17^th March 2005 and, on that date, we made an  order.  Paragraph 5 of the order provided that paragraphs 1 and 2 of the order made by the County Court on 8^th December 2003 be set aside and in lieu thereof there be judgment for the plaintiff against the third defendant, the State of Victoria, for "damages in the sum of $295,760 together with damages in the nature of interest calculated down to the date of judgment in the Court of Appeal" (emphasis added).  We reserved only "[t]he question of interest calculations and the question of costs of the appeal and the two cross-appeals."[1]  The parties were invited to make written submissions.

   [1]Transcript of 17^th March 2005 at [12].

1. We have considered those submissions and are of the view that the Court should make the following additional orders:

1.The damages in the nature of interest referred to in paragraph 5 of the order made by the Court of Appeal on 17^th March 2005 are to be awarded only on the sum of $95,000 for aggravated compensatory damages for pain and suffering and loss of enjoyment of life.

2.They are to be calculated on one half of that sum at the rate of 4 per cent per annum from 21^st December 2001 to 8^th December 2003 and at the rate of 8 per cent per annum from 8^th December 2003 to 17^th March 2005.

3.The appellant, the State of Victoria, is to pay 50 per cent of the first respondent's costs of the appeal, taxed on a solicitor and client basis.

4.The first cross-respondent, the State of Victoria, is to pay the whole of the cross-appellant's costs of the cross-appeal brought by the first respondent to the appeal , taxed on a solicitor and client basis.

5.The second cross-respondent, on the cross-appeal brought by the second and third respondents to the appeal, is to pay the whole of the cross-appellants' costs of that cross-appeal, except the costs of the cross-appellants' application for an extension of time.

6.The said cross-appellants are to pay the second cross-respondent's costs of that application.

1. It will be apparent from the foregoing that we have, in large measure, accepted the State's submissions in relation to interest, in particular paragraphs 9 and 10 of those submissions.  We consider, however, that Mr McIver should receive interest at a higher rate, equivalent to interest on the whole  $95,000 at 4 per cent per annum, for the period after judgment in the County Court during which he was deprived of the fruits of that judgment by a stay as of right.[2]   It is too late to consider backdating the judgment.  The usual practice of the Court is to calculate interest down to the date of judgment in the Court of Appeal.[3]  As the words we have italicized in [1] above show, we followed that practice in the order we made on 17^th March 2005.  The order was authenticated on 24^th March 2005, before Mr McIver’s submissions were received.

   [2]County Court Act 1958, s.74(4). Observations on the hardship and injustice that can be caused by that provision were made by this Court in Connell-McDowell v. Bleechmore [1999] 2 V.R. 395.

   [3]G.E.F. Packaging Services Pty. Ltd. v. Turner (unreported, Court of Appeal, 5^th September 1995).  In Edmonds v. Donovan [2005] VSCA 97, to which counsel drew our attention, the Court had impliedly directed that the judgment it substituted should take effect from the date of the judgment below: see [9]. French v. Smith (No. 2) [2005] VSCA 114 is a similar case, in which it had been decided by implication that the date of judgment remain the date of judgment below: see [32] – [33]. Far from that being implied here, the contrary was expressly provided in paragraph 5 of the order made on 17^th March 2005. 

1. So far as the costs of the State's appeal and Mr McIver's cross-appeal are concerned, we accept his submission that the whole of those costs should be taxed on a solicitor and client basis. In our judgment, in the circumstances of this case, that is the appropriate exercise of the discretion conferred by Rule 26.12(4). Mr McIver twice offered to settle this litigation, on each occasion for less than he ultimately received. The State should bear the consequences of refusing both offers to the full extent expressly contemplated by that Rule.[4] 

   [4]We express no opinion as to whether indemnity costs could be awarded.  Counsel’s application in the present case was appropriate.

1. Neither the transcript of 17^th March 2005 nor the authenticated order records that, on that date, we granted Mr McIver indemnity certificates in respect of both the State's appeal and the police members' cross-appeal.  We did so, and that should now be recorded in the "other matters" part of the further orders that we shall make in conformity with these reasons.

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