Westpac Banking Corporation v “Stone Gemini” - [1999] FCA 917

FEDERAL COURT OF AUSTRALIA
Westpac Banking Corp v “Stone Gemini” [1999] FCA 917
PRACTICE AND PROCEDURE – currency of prejudgment interest – purpose of prejudgment interest to compensate plaintiff for detriment suffered in being kept out of his money – whether to follow general rule that interest be in the same currency as the principal judgment amount – consideration of all the circumstances – where judgment in US dollars – where plaintiff an Australian bank but involved in significant US dollar transactions – whether double counting of interest
Federal Court of Australia Act 1977 (Cth) s 51A
Batchelor v Burke (1981) 148 CLR 448, applied
State Bank of New South Wales Ltd v Swiss Bank Corporation (1995) 39 NSWLR 350, followed
Helmsing Schiffahrts GMBH & Co KG v Malta DryDocksCorporation [1977] 2 Lloyd’s Rep 444, cited
Miliangos v George Frank (Textiles) Ltd (No 2), [1976] 2 Lloyd’s Rep 434, cited
Owners of MV Despina R (“The Despina R”)v Owners of MV Eleftherotria [1979] AC 685, cited
State Bank of New South Wales Ltd v Swiss Bank Corporation (1995) 39 NSWLR 350, cited
WESTPAC BANKING CORPORATION v
THE SHIP MV “STONE GEMINI”
NG 557 OF 1996
TAMBERLIN J
SYDNEY
9 JULY 1999

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

IN ADMIRALTY
NG 557 OF 1996

BETWEEN:

WESTPAC BANKING CORPORATION
Plaintiff

AND:

THE SHIP MV "STONE GEMINI"
Defendant

BY FIRST CROSS-CLAIM

NAVALGALAXY SHIPPING LTD,
THE OWNERS OF THE SHIP MV “STONE GEMINI”
Cross-Claimant

JINDALEE TRADING CO PTY LTD
First Cross-Defendant

ROSIE ROSALIND WANG
Second Cross-Defendant

BY SECOND CROSS-CLAIM:

JINDALEE TRADING CO PTY LTD
Second Cross-Claimant

NAVALGALAXY SHIPPING LTD
Third Cross-Defendant

BY THIRD CROSS-CLAIM:

JINDALEE TRADING CO PTY LTD
Third Cross-Claimant

WESTPAC BANKING CORPORATION
Fourth Cross-Defendant

BY FOURTH CROSS-CLAIM:

WESTPAC BANKING CORPORATION
Fourth Cross-Claimant

JINDALEE TRADING CO PTY LTD
Fifth Cross-Defendant

JUDGE:

TAMBERLIN J

DATE:

9 JULY 1999

PLACE:

SYDNEY

REASONS FOR JUDGMENT

Judgment was delivered in this matter on 14 April 1999, with further reasons handed down on 7 May 1999. On those dates I made no orders. The issue for present consideration concerns the appropriate orders to be made in respect of interest arising from a dispute between the plaintiff, Westpac Banking Corporation (“Westpac”), and Navalgalaxy Shipping Ltd (“Navalgalaxy”), the owner of the defendant ship MV “Stone Gemini”.
The judgment requires that the currency of the principal sum awarded be in United States dollars (“USD”). That was the currency of the sale and the contract of carriage, which were the underlying transactions. However, Navalgalaxy contends that if the Court determines that Australian dollar (“AUD”) interest rates should apply, then judgment for the principal amount should also be entered in AUD.
The dispute arises from Westpac’s contention that pre-judgment interest should be calculated in AUD by reference to rates of interest applicable in Australia over the period from the date of conversion of the cargo, which occurred on the days preceding and including 14 July 1995, to the date of judgment.

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: [1999] FCA 917
Decision Date: 9 JULY 1999

CaseChat Overview and Summary

The Federal Court of Australia, in the case of Westpac Banking Corporation v The Ship MV "Stone Gemini," addressed a dispute concerning the currency and rate of prejudgment interest to be applied on a judgment amount denominated in US dollars. The primary issue was whether the interest should be calculated in Australian dollars, considering Westpac's significant involvement in USD transactions, or in US dollars, in line with the currency of the underlying transactions.

The court evaluated the arguments presented by both Westpac and Navalgalaxy, the owner of the ship. Westpac argued for the application of Australian interest rates to compensate for the loss of funds in Australian dollars, while Navalgalaxy contended that interest should be calculated in US dollars, in accordance with the currency of the transaction and contract. The court considered the general principle that interest should be calculated in the currency of the judgment unless there is good cause to deviate from this rule. It also examined relevant precedents, including State Bank of New South Wales Ltd v Swiss Bank Corporation, which held that interest rates should be calculated by reference to the currency of the judgment.

In this case, the court found that the currency of the transaction and contract was USD, and thus, the usual rule should apply. It held that interest should be calculated in USD by reference to the US Federal Reserve Bank Rate. The court determined that Westpac's argument for applying Australian interest rates was not sufficiently substantiated, as it could not conclusively demonstrate that the loss of interest was suffered in Australian dollars. Consequently, the court concluded that the appropriate rate for calculating prejudgment interest was the US Federal Reserve Base Rate plus any costs and expenses incurred by Westpac in borrowing the amount of the judgment.

The court also noted the need to adjust the interest amount to account for any double counting. It stood the matter over to allow the parties to recalculate the appropriate amount of interest in USD and to finalise the matter with Short Minutes reflecting these reasons.

Orders