Stelmag Pty Ltd v Long Paddock Pty Ltd - [2005] ACTSC 59

STELMAG PTY LTD v LONG PADDOCK PTY LTD & ORS
[2005] ACTSC 59 (19 July 2005)

CATCHWORDS

INTEREST - whether plaintiff to pay interest for full period until judgment - whether plaintiff caused six year delay in commencing proceedings - whether there was “inexplicable tardiness” - whether there was reasonable excuse for delay - whether “commencement date” is date on which statement of claim is filed or date of service - whether “lump sum” appropriate.

Supreme Court Rules, O42A r1(1)

Supreme Court Act 1933 (ACT), s 69

J S Hill & Associates Ltd v Dawn [2001] ACTSC 28

Metro Meat Pty Ltd v Werlick (1993) Aus Torts Reports 81-242

Re Hodby: Ex Parte Kenny (1987) 77 ALR 118

No. SC 25 of 1997

Judge: Higgins CJ
Supreme Court of the ACT
Date: 19 July 2005

IN THE SUPREME COURT OF THE       )
  )          No. SC 25 of 1997
AUSTRALIAN CAPITAL TERRITORY    )

BETWEEN: STELMAG PTY LTD
(ACN 008 571 159)

Plaintiff
AND:LONG PADDOCK PTY LTD
(ACN 008 662 968)

First Defendant

AND:ROBERT JOHN KING

Second Defendant

AND: SUSAN ROSALIE KING

Third Defendant

ORDER

Judge:  Higgins CJ
Date:  19 July 2005
Place:  Canberra

THE COURT ORDERS THAT:

A sum of $295,000.00 be added to the judgment sum as at, and from, 1 April 2005.

In this matter, a number of issues have been raised ancillary to my decision handed down on 1 April 2005 (ACTSC 20) and pursuant to leave reserved.

The first and second defendants contend that, insofar as a sum is awarded in favour of the plaintiff, interest should not be awarded for the full period from 1991 to judgment.

Order 42A rule 1(1) Supreme Court Rules provides:

In any proceedings for the recovery of any money (including any debt or damages or the value of any goods) the court shall, on application, unless good cause is shown to the contrary—
(a)order that there be included in the sum for which judgment is given interest at the rate the court considers appropriate 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 is entered; or
(b)without proceeding to calculate interest in accordance with paragraph (a), order that there be included in the sum for which judgment is given a lump sum instead of any such interest.

Miles CJ considered that rule, and its progenitor, s 69 Supreme Court Act 1933 (ACT), in J S Hill & Associates Ltd v Dawn [2001] ACTSC 28. His Honour pointed out that the purpose of the rule is to compensate the plaintiff for being kept out of funds which, according to the judgment, it was earlier entitled to receive. This is regardless of whether or not there was a contractual or other right to receive interest.

At [11], his Honour stated:

Although an award of interest under s 69 and similar legislation elsewhere has been described as…

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: [2005] ACTSC 59
Decision Date

CaseChat Overview and Summary

In the case of Stelmag Pty Ltd v Long Paddock Pty Ltd, the plaintiff, Stelmag Pty Ltd, sought compensation from the defendants, Long Paddock Pty Ltd, Robert John King, and Susan Rosalie King, for various breaches of contract and fiduciary duty. The dispute was heard in the Supreme Court of the Australian Capital Territory. The central issue before the court was whether the plaintiff was entitled to interest on the awarded sum for the entire period from when the cause of action arose until the judgment was rendered, or if a lump sum should be awarded instead of interest due to the plaintiff's delay in initiating proceedings.

The court examined the relevant legal principles, including those outlined in Order 42A rule 1(1) of the Supreme Court Rules, which allows for the inclusion of interest in the sum for which judgment is given, unless good cause is shown to the contrary. The court also referred to previous cases such as J S Hill & Associates Ltd v Dawn and Grincelis v House to understand the discretionary nature of awarding interest and the factors that could justify withholding it. The court found that while the plaintiff had a right to be compensated for being kept out of funds it was entitled to receive, the six-year delay in commencing proceedings needed to be considered. The court acknowledged the plaintiff's explanations for the delay, including the discovery of the defendants' receipt of significant funds and alleged intimidation by one of the defendants. However, the court concluded that these factors did not provide a reasonable excuse for the delay.

The court further examined whether the "commencement date" for calculating interest should be the date the statement of claim was filed or the date of service. The court decided that the relevant date was the date of service. Given the delays and the plaintiff's tardiness, the court decided that a lump sum was more appropriate than awarding interest for the full period. The court ordered that an additional sum of $295,000.00 be added to the judgment sum from 1 April 2005, striking a balance between compensating the plaintiff and addressing the consequences of the delay.

Orders