Testel Aust P/L v Rickard (No 2)

In the matter of Testel Aust P/L v Rickard (No 2), the primary legal issue was the recoverability of interest on pre-judgment economic loss, specifically the appropriate interest rate to apply. The case was heard in the South Australian District Court. The plaintiff, Testel Aust P/L, sought compensation for losses incurred due to the defendant, Rickard, breaching a restraint of trade covenant. The plaintiff argued for a conservative interest rate of 5%, while the defendant contended that the rate should be lower, taking into account the prevailing economic climate and relevant legal precedents.

The court had to determine whether the interest rate proposed by the plaintiff was reasonable and whether it complied with the guidelines set out in the District Court Supplementary Rules 2014 (SA). The District Court Supplementary Rules provide a formula for calculating interest on pre-judgment economic loss, which suggests adding 4% to the cash rate of interest set by the Reserve Bank of Australia. The plaintiff's counsel submitted that this formula justified an interest rate ranging from 8.75% to 5.5% for the relevant period. However, the defendant argued that the rules were merely a guide and that the commercial interest rate should be adjusted for inflation, referencing established authorities such as Grincelis v House and Wheeler v Page.

The court considered the defendant's submission that the rules were only a guide and that the prevailing economic conditions warranted a lower interest rate. Despite the guidelines, the court acknowledged a practice of applying an interest rate between 5% and 6% on pre-judgment losses. Ultimately, the court ruled that a 5% interest rate was conservative and reasonable, upholding the plaintiff's calculations for interest on the awarded damages. The final orders of the court are not detailed in the provided text.