Flinn v The Maryborough Sugar Factory Limited
[2003] QDC 446
To print this judgment please return to the case and click on the PDF icon
next to the
case name. For court use, a full PDF copy is required or preferred.
Exit Distraction Free Reading Mode
Please Note: You are about to print a copy of the onscreen
version of
this judgment. For court use, a full PDF copy of the judgment is required or preferred. Please
return to
the case for PDF printing options.
- Unreported Judgment
- Flinn v The Maryborough Sugar Factory Limited[2003] QDC 446
- Add to List
Flinn v The Maryborough Sugar Factory Limited[2003] QDC 446
Flinn v The Maryborough Sugar Factory Limited[2003] QDC 446
DISTRICT COURT OF QUEENSLAND
CITATION: | Flinn v The Maryborough Sugar Factory Limited [2003] QDC 446 |
PARTIES: | NEVILLE KEITH FLINN Plaintiff v THE MARYBOROUGH SUGAR FACTORY LIMITED Defendant |
FILE NO/S: | D88/2001 |
DIVISION: |
|
PROCEEDING: | Applications |
ORIGINATING COURT: | District Court, Maryborough |
DELIVERED ON: | 8 December 2003 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 10 November 2003 |
JUDGE: | McGill DCJ |
ORDER: |
|
CATCHWORDS: | JUDGMENTS AND ORDERS – Interest on Judgments – payment delayed pending clearances from Commonwealth agencies – whether obligation excluded under Commonwealth law – discretionary relief refused. CONSTITUTIONAL LAW – Inconsistency of laws – obligation to pay interest on judgments not inconsistent with Commonwealth statutes to recover payments. Supreme Court Act 1995 s 48. Health and Other Services (Compensation) Act 1995 s 24, s 28, s 33. Social Security Act 1991 s 1174, 1174A. Disability Services Act 1986 s 23. Callinan v Borovina [1977] Qd R 366 – applied. Commonwealth of Australia v Western Australia, the Mining Act case (1999) 196 CLR 392 – considered. Gould v Vaggelas (1985) 157 CLR 215 – applied. Jorgensen v Olive [1985] 2 Qd R 168 – followed. Re Macks; ex parte Saint (2000) 204 CLR 158 – considered. Mercantile Credit Ltd v Buckeridge [1986] WAR 149 – applied. Radford v M F & P M Sed Pty Ltd (Writ 130/97, 13.08.99, unreported, BC 9906622) – followed. Telstra Corporation Ltd v Worthing (1999) 197 CLR 61 – considered. Tonkin v Johnson [1999] 2 Qd R 318 – applied. |
COUNSEL: | P J Goodwin for the plaintiff K F Holyoak for the defendant |
SOLICITORS: | Carswell & Co for the plaintiff Bell Dixon Butler for the defendant |
- [1]These applications raise a point which is of considerable practical significance, not because of the amount involved in this particular case, but because the point arises frequently with personal injury litigation. Where a plaintiff claims damages for personal injury, there may be a charge on the damages under a Commonwealth statute, and a provision in that statute that the judgment may not be satisfied until the Commonwealth has been paid. When this occurs, does interest accrue on the judgment under s 48 of the Supreme Court Act 1995 prior to the time when the defendant has obtained clearances under the relevant Commonwealth statutes?
- [2]In this action the plaintiff claimed from the defendant damages for personal injury suffered by him in the course of his employment on or about 8 December 1997, when the plaintiff suffered a fracture of the right radial head, a fracture of the left talus, and right carpal tunnel syndrome. The plaintiff’s claim was defended and the matter proceeded to trial, as a result of which another judge gave judgment that the defendant pay the plaintiff the sum of $217,086.24. The judgment was dated 19 February 2002 and filed on 11 March 2002.
- [3]Soon after the judgment the Health Insurance Commission issued on 25 February 2002 a notice of charge in respect of Medicare benefits in the sum of $416.75.[1] Hence that amount became payable within 28 days of the judgment. On 21 March 2002 Centrelink advised the plaintiff’s solicitors in effect that there was no amount claimed by way of refund. A copy of this letter was provided to the solicitors for the defendant on 26 March 2002.[2] On 3 April 2002 the Commonwealth Rehabilitation Service advised the plaintiff’s solicitors by email that it had no claim in relation to the judgment; a copy of that email was sent by fax to the defendant’s solicitors on 3 April 2002.[3] The judgment sum, after deducting the amount payable to the Health Insurance Commission, was paid to the plaintiff’s solicitors on 15 April 2002.[4]
State legislation
- [4]The Supreme Court Act 1995 provides in s 48:
- “(1)Where judgment is given or an order is made by a court of record for the payment of money in a cause of action that arose after the commencement of the Common Law Practice Act Amendment Act 1972, interest shall, unless the court otherwise orders, be payable at the rate prescribed under a regulation from the date of the judgment or order on so much of the money as is from time to time unpaid.
- (2)Notwithstanding anything contained in subsection (1) –
- (a)where the court directs the entry of judgment for damages and the damages are paid within 21 days after the date of the direction – interest on the damages shall not be payable unless the court otherwise orders;
- (b)where the court makes an order for the payment of costs and the costs are paid within 21 days after the ascertainment thereof by taxation or otherwise – interest on the costs shall not be payable unless the court otherwise orders.”
- [5]This section was formerly s 73 of the Common Law Practice Act 1867. It was inserted into that Act by the Common Law Practice Act Amendment Act 1972 (No 34 of 1972) s 5; s 4 of that Act inserted a new s 72 which provided for interest up to judgment, a provision which now appears in s 47 of the Supreme Court Act 1995. The sections obviously compliment each other; s 47 applies up to the date of the judgment, and s 48 runs from the date of the judgment.
- [6]Section 72 was taken from the English Law Reform (Miscellaneous Provisions) Act, and in Callinan v Borovina [1977] Qd R 366 the Full Court at p. 369 adopted what was said by Denning MR in Jefford v Gee [1972] QB 130, the leading English authority on the English equivalent, at p. 144: “The basis of an award of interest is that the defendant has kept the plaintiff out of his money; and the defendant has had the use of it himself. So he ought to compensate the plaintiff accordingly.” The decision of the Full Court was confirmed on appeal to the High Court: Fire & All Risks Insurance Co Ltd v Callinan (1978) 140 CLR 427.
- [7]The operation of the then s 73 was considered to some extent by the High Court in Gould v Vaggelas (1985) 157 CLR 215, from 271. The Court said at p. 275: “Clearly, an award of interest is necessary to preserve to the appellants the full benefit of their judgment. Where interest is allowed, it should be allowed at ordinary commercial rates: Cullen v Trappell (1980) 146 CLR 1 at 21, per Gibbs J.” In that case it was held that the Court had a discretion under the section, which would be preserved by the wording of s 48(1), to vary the rate of interest, and ordered that interest be paid at 12 percent rather than the statutory rate. Reference to Cullen was to a passage where his Honour was discussing the correct approach to the award of interest under the equivalent of s 47, and the applicability of that authority in the context of an exercise of discretion under the equivalent of s 48 is consistent with the Court’s regarding the two sections as being complementary.
- [8]Unless interest or something like it is payable in respect of a judgment sum, the plaintiff will not receive proper compensation. Almost invariably a money judgment reflects a pre-existing obligation to pay the judgment sum at an earlier date, or is the crystallisation of an obligation which arose at an earlier time. Section 47 is directed to remedying the injustice which would otherwise occur to the plaintiff because the amount payable was not paid at the time when the cause of action arose.[5] Between that time and the time when judgment is given, to the extent that the plaintiff has been kept out of his money he will have suffered loss, and conversely the defendant will have had the benefit of retaining the money. The statute assumes, reasonably enough, that this benefit may be reflected in the value of the interest which such amount could earn.
- [9]Presumably once an appropriate order has been made under s 47 justice has been done between the plaintiff and defendant, but necessarily on the assumption that the judgment is satisfied on the date of judgment. Commonly that will not occur, if only because of practical considerations. Section 48 was therefore intended to remedy the similar injustice which would otherwise arise after the date of judgment. It operates from the date of judgment, although there are two concessions in subsection (2), in paragraph (a) in respect of a judgment for damages, and in paragraph (b) in respect of an order for costs. Note that in each case if the party liable for the damages or costs does not take advantage of the concession interest runs under subsection (1) from the date of judgment or order. The concession period in paragraph (a) also runs from that date.
- [10]At common law a judgment did not carry interest, but from 1838 by statute in England interest at an amount stated in the statute ran from the time of entering up the judgment until satisfaction.[6] This was referred to in the judgment of Griffith CJ in Reis v Carling (1908) 5 CLR 673, where his Honour traced the subsequent development of the law in relation to interest in England and in Queensland. For a long time, therefore, it has been recognised that ordinarily a judgment will carry interest from the date of the judgment.
Commonwealth legislation
- [11]The Health and Other Services (Compensation) Act 1995 deals with the recovery of Medicare benefits, paid in respect of a professional service rendered to a plaintiff as a result of an injury, from a judgment or settlement made in respect of a claim by that plaintiff for compensation in respect of the injury. The Act also deals with nursing home benefits and residential care subsidies: Part 2 Division 2. Part 3 deals with enforcement of the obligation to repay, and s 23 provides that if a judgment or settlement has been made in respect of the claim there is an obligation on the insurer (if the defendant is insured in respect of the liability), or the defendant, to notify the Commission in writing within 28 days after the judgment or settlement. It is an offence not to give the notice required by s 23: s 26(1). By s 24, the Commission must then advise the insurer or defendant of the amount if any that is payable to the Commonwealth in respect of the amount of compensation: s 24(1).
- [12]There is also a mechanism for advance notice in s 21, which may also operate as a notice of a charge under s 24: s 21(6), s 24(6). This applies so long as the judgment or settlement is made within six months after the notice under s 21. If notice is given under s 24, the defendant must pay to the Commonwealth the amount specified in the notice within 28 days: s 28(1). If the notice is given to an insurer under s 24 the insurer must pay the amount within 28 days: s 28(2). A breach of this section is made an offence for which a substantial penalty is imposed. In addition the amount payable is made a debt due to and recoverable by the Commonwealth: s 29(1). Payment of the amount payable under s 28 discharges pro tanto the liability on the judgment: s 31.
- [13]When s 28 applies, the liability to pay compensation, that is, to satisfy the judgment, is suspended by s 30 which provides:
- “(1)If an amount is recoverable under s 28 from a compensation payer in respect of an amount of compensation, the compensation payer is not liable to pay to the compensable person any amount of the compensation until the amount is paid to the Commonwealth, or until the end of the 28 day period for complying with s 28, whichever happens first.
- (2)If an amount is recoverable under s 28 from an insurer in respect of an amount of compensation:
- (a)the insurer is not liable to indemnify the compensation payer in respect of the compensation payer’s liability to pay to the compensable person any amount of the compensation; and
- (b)the compensation payer is not liable to pay to the compensable person any amount of the compensation;
until the amount is paid to the Commonwealth, or until the end of the 28 day period for complying with s 28, whichever happens first.”
- [14]By s 32 it is made an offence to pay any part of the compensation before a notice under s 24 has been issued unless the time for issuing the notice has expired or unless, if there is a current notice under s 21, the insurer or defendant withholds the amount set out in that notice. Section 32(6) shows that if payment is made in contravention of that section, it is not recoverable from the plaintiff.
- [15]The question of interest is dealt with expressly to some extent by s 33, which provides:
“If:
- (a)a judgment or settlement has been made in respect of an amount of compensation; and
- (b)a compensation payer or insurer has paid to the compensable person a part of the compensation, but withheld an amount referred to in paragraph 32(1)(b); and
- (c)an Australian law would, apart from this section, make the compensation payer or insurer liable to pay interest on the sum withheld, because the sum is withheld after the judgment or settlement has been made;
despite that law, the compensation payer or insurer is not liable to pay that interest.”
Paragraph 32(1)(b) refers to the situation where there is a notice under s 21 which is current, and the amount stated in that notice is withheld. I think it is of some significance that s 33 excludes interest only on the sum withheld.
- [16]Reference was also made to relevant provisions of the Social Security Act 1991. In certain circumstances the Secretary may give a written notice to a compensation payer of an intention to recover an amount specified in the notice, whereupon the compensation payer is liable to pay that amount to the Commonwealth: s 1174(1), (2). It is unnecessary to explain the statutory provisions dealing with the way in which that amount is determined. If a compensation payer has been given such notice, or a preliminary notice under s 1172 which may be given to a potential compensation payer but is otherwise similar, by s 1174A the compensation payer’s liability to pay that compensation is suspended while the notice has effect. The payment by the compensation payer of the amount claimed under s 1174 operates pro tanto as a discharge of the liability of the plaintiff: s 1175.
- [17]A substantial criminal sanction is imposed for making a payment to the plaintiff without first paying the amount specified in the notice, in the absence of written permission: s 1176(1). Furthermore, the payment to the plaintiff does not discharge the liability to the Commonwealth: subsection (2). There are also similar provisions imposing a regime for recovering from an insurer of the defendant: s 1177-1182. There is no specific provision in the Social Security Act dealing with the effect the Act has on the obligation under a state act to pay interest. There is no provision restricting satisfaction of a judgment in the absence of a notice or preliminary notice.
- [18]The Disability Services Act 1986 provides in s 23 for recovery of costs incurred by the Commonwealth on rehabilitation programs. By subsection (5) the Secretary may send a notice in writing to the person liable to pay compensation to a plaintiff who is undertaking or has undertaken a rehabilitation program, informing the person liable to pay compensation of an intention to recover the cost of the rehabilitation program. If the Secretary then or later specifies the cost of the rehabilitation program and an amount payment of which is claimed by the Secretary, the person liable to pay compensation is liable to pay to the Commonwealth the amount so specified, or the amount of the compensation, whichever is the lesser: subsection (6). A payment to the Commonwealth under that subsection is a discharge to the person liable to pay compensation against the plaintiff: subsection (8).
- [19]Subsection (7) provides:
“After the service on a person of the notice under subsection (5), the person shall not, except with the approval of the Secretary and in accordance with an approval, pay an amount of compensation to or on behalf of the person entitled to receive compensation until:
- (a)the secretary has specified under subsection (6) the amount that the person liable to pay compensation is liable to pay to the Commonwealth; and
- (b)the person liable to pay compensation has paid that amount to the Commonwealth.”
There is no restriction in the absence of a notice under subsection (5).
- [20]One of the features of each of these statutes is that it contains a restriction on the payment of an amount payable under a judgment which is not confined to the amount required to discharge any liability to the Commonwealth. Section 30 suspends the liability to pay “any amount of the compensation” while it operates and, except where there is a current advance notice under s 21, s 32 makes it an offence to pay any part of the compensation prior to the issue of a notice under s 24. It is the notice under s 24 that gives rise to the liability under s 28. Where there is a current notice under s 21 it is only the amount claimed in the notice which must be retained, and the Act will not interfere with the capacity of a defendant or insurer to pay the balance of the judgment amount. But if there is no such notice the defendant or insurer can pay no part of the judgment sum, at least for some time. In the case of the Social Security Act, s 1176 makes it an offence to pay the compensation payment unless the amount specified in a recovery notice has first been paid. The position is similar under s 23(7) of the Disability Services Act 1986. Presumably both apply to the whole amount.
Jurisdiction
- [21]There was some issue about whether it was open to me to entertain either the plaintiff’s application, which was for an order for payment of interest, or the defendant’s application which was for an order under s 48(1) for interest not to accrue until the requirements of the Commonwealth legislation had been satisfied, or other similar relief. The plaintiff’s application was similar to the one entertained by Demack J in Jorgensen v Olive [1985] 2 Qd R 168. His Honour did not specifically discuss the basis of any jurisdiction to make that order, and the application was dismissed on its merits, but I think it fair to say that his Honour regarded the application as one properly made because it related to the enforcement of a judgment of the court.
- [22]Plainly from the terms of s 48 there must be jurisdiction in the court to entertain an application for the court to order otherwise in a way contemplated by that section, and there is no reason to confine that jurisdiction to an order made when or before a judgment is given. The High Court entertained and allowed an application for an order varying the rate of interest under the then equivalent of s 48 after judgment had been given in Gould v Vaggelas (supra).
- [23]The parties were concerned about the question of jurisdiction, and indeed the plaintiff has sought to file a claim and statement of claim for the amount the plaintiff claims as payable pursuant to s 73. Neither party submitted that I did not have jurisdiction to entertain the applications.
- [24]Section 48 permits an order to be made, but will operate automatically in the absence of an order. However where there is a dispute between parties as to how s 48 operates in respect of a particular judgment, in my opinion the court retains jurisdiction to entertain and resolve that dispute, as a derivative jurisdiction from its original jurisdiction in the proceeding which gave rise to that judgment. That jurisdiction would not result in a separate judgment for a particular amount, though it may well lead to a determination that the amount payable under s 48 is in a particular amount, and in my opinion there is no reason why a court in such circumstances should not be able to go on to order payment of the amount so found to be payable in the circumstances, notwithstanding that the basis of the obligation is s 48.[7] In my opinion the derivative jurisdiction of the court in respect of its own judgments would extend that far.
Defendant’s argument
- [25]The defendant submitted that there was operational inconsistency between the provisions of s 48 and the Commonwealth legislation to which I have referred, so that s 48 was invalid to that extent, pursuant to s 109 of the Constitution.[8] In the alternative it was submitted that the discretion under s 48 should be exercised so as to relieve the defendant of the obligation to pay interest in circumstances where the judgment was satisfied promptly once the clearances required under the Commonwealth legislation had all been obtained. If the former argument is correct there would be no need for me to consider the latter argument.
Section 109 – the authorities
- [26]This section will only operate to render a state law invalid if there is inconsistency with the law of the Commonwealth, and to the extent of that inconsistency. There may be direct inconsistency, for example where a state law purports to require what Commonwealth law forbids.[9] However the section is not confined to such direct inconsistency. “Where a state law, if valid, would alter, impair or detract from the operation of a law of the Commonwealth Parliament, then to that extent it is invalid. Moreover, if it appears from the terms, the nature or the subject matter of a Federal enactment that it was intended as a complete statement of the law governing a particular matter or set of rights and duties, then for a State law to regulate or apply to the same matter or relation is regarded as a detraction from the full operation of the Commonwealth law and so as inconsistent.”[10] It follows that inconsistency may arise even if it is possible to obey both State and Commonwealth law.
- [27]These principles may be illustrated by three recent decisions of the High Court. In Commonwealth of Australia v Western Australia, the Mining Act case (1999) 196 CLR 392 it was held by majority that, relevantly, there was no inconsistency between the provisions of the State Mining Act and the Defence Regulations, in circumstances where freehold and leasehold land acquired by the Commonwealth for the purposes of a defence practice area were the subject of an application for grant of exploration licences under the State Act. Gleeson CJ and Gaudron J in a joint judgment said at pp. 416-7 that the Commonwealth Regulations did not constitute an exhaustive statement of the rights and obligations of persons other than the Commonwealth in respect of the relevant land, so that they did not cover the field with respect to such rights and obligations, nor did the provisions of the Mining Act alter, impair or detract from the operation of the Defence Regulations. There was no operational inconsistency unless some particular step had been taken under the Defence Regulations which had the effect of preventing entry or activity on the perimeter area. As that step had not been taken, no operational inconsistency had arisen so there was no inconsistency for the purposes of s 109.
- [28]In Telstra Corporation Ltd v Worthing (1999) 197 CLR 61 it was held that an employee of Telstra was not entitled to seek compensation for injuries suffered in the course of his employment pursuant to the Workers Compensation Act 1987 of New South Wales, because of certain provisions of Commonwealth legislation which meant that any compensation claim was to be dealt with only under Commonwealth law. The court held at p. 78 that the State law purported to deny or vary rights, powers or privileges conferred by the federal law so that there was direct inconsistency. For these reasons it was unnecessary to consider whether the Commonwealth legislation sought to cover the field, but in any event the conclusion of the New South Wales Court of Appeal, that it did not, involved misconstruction of some of the provisions of the Commonwealth legislation.
- [29]In Re Macks; ex parte Saint (2000) 204 CLR 158 the High Court considered State legislation passed in the wake of Re Wakim[11] to validate decisions of federal courts which had been held in that decision not to be capable of exercising State jurisdiction. Among the issues considered was whether the State Acts were inconsistent with provisions of the Federal Court of Australia Act. As a result of the Wakim decision some decisions of the Federal Court were liable to be set aside, although they remain valid and binding unless and until that occurred. The State Acts operated by conferring statutory rights and imposing statutory liabilities which corresponded precisely to those embodied in existing Federal Court orders. Accordingly they operated with respect to the same rights and obligations as were embodied in those orders.[12] But there was no exhaustive statement in the relevant provisions of the Federal Court Act of the law as to those rights and liabilities, and therefore the federal legislation did not cover the field. Obviously the approach in that case was influenced by the circumstance that ultimately the Commonwealth Parliament did not have the capacity to legislate in respect of the subject matter of the judgments, and the conferral of jurisdiction on the Federal Court had been invalid. There was operational inconsistency if it was sought to vary or modify the rights under the State Act in a way in which would make them inconsistent with a subsisting Federal Court order, but at worst that would require the Federal Court order to be quashed or set aside first, which would produce only a temporary suspension of the rights under the State Act.[13]
Analysis
- [30]Section 48 is not the provision which imposes an obligation to pay money in accordance with a judgment of a state court. There is State law to that effect, and to the extent that the Commonwealth legislation prevents the judgment from being satisfied by a defendant in certain circumstances, there is a direct inconsistency and the Commonwealth Act prevails. Section 48 assumes that there is such an obligation, but also assumes that it will not be instantly satisfied. Far from requiring the judgment of the court to be complied with, the statute assumes that, for one reason or another, time, perhaps some considerable time, will pass before the judgment is complied with. It is intended to accommodate a situation where some time passes between when judgment is given and when payment is made, and reflects a statutory recognition that, unless interest is payable during that period, justice will not be done to the person with the benefit of the judgment. That person will be deprived of the benefit of the judgment money, from which that person might be able to earn interest, and conversely the party liable to pay will retain the benefit of the money, and hence the opportunity to earn interest on it.
- [31]If s 48(1) stood alone, in my opinion there would be obviously no question of inconsistency, except in relation to the specific provisions of s 33 of the Health and Other Services (Compensation) Act 1995. There would be nothing prohibited or required by the State Act which was required or prohibited by the Commonwealth Act, nor would the operation of the State Act alter, impair or detract from the operation of the Commonwealth Act. The Commonwealth Act can operate in exactly the same way whether or not the defendant is required to pay interest under the State Act, and I cannot detect any aspect of the operation of the Commonwealth legislation which would be affected in any way by the imposition of that obligation. There is no operational inconsistency with s 48(1).
- [32]There is nothing to suggest that there was any intention on the part of the Commonwealth Parliament, in enacting the Social Security Act 1991 or the Disability Services Act 1986, to cover a field which would extend to include any obligation to pay interest on judgments which were otherwise subject to the relevant provisions of that legislation.[14] The only field which that legislation covers is the field of the rights of the relevant Commonwealth authorities in relation to such judgments, and the compensation payable pursuant to those judgments. The position with the Health and Other Services (Compensation) Act 1995 is similar, and if anything made clearer in my opinion by the enactment of s 33, which suggests by implication that there was no intention to have any wider effect on “an Australian law [which] would, apart from this section, make the compensation payer or insurer liable to pay interest …”
- [33]The defendant’s argument however emphasised the concession in s 48(2)(a), and the circumstance that obedience to the Commonwealth legislation may well have the effect of depriving the defendant of the opportunity to take advantage of that concession. It was submitted that the defendant had a choice, to pay within the 21 day period, or to pay interest, and the operation of the Commonwealth legislation prevented the defendant from taking advantage of that choice That meant that there was operational inconsistency with s 48 as a whole, in circumstances where a defendant or insurer could not satisfy the judgment within 21 days without breaching Commonwealth law.
- [34]No doubt the reason for the concessions in subsection (2) was that, in circumstances where the court is assessing damages (or costs), the particular amount payable in respect of the cause of action (or costs order) will not be known until the judgment is given (or assessment completed). In these circumstances, it is reasonable to allow some period of time for the defendant to arrange payment of the specific amount required to be paid after it has become known, and before the complication of some additional amount by way of interest is introduced. That I think does not mean that there is any operational inconsistency between the state and federal legislation. The position is simply that the Commonwealth Act may by its operation prevent the defendant from taking advantage of the concession available under the State Act, but in those circumstances the effect of s 109 is that the defendant is effectively prevented from taking advantage of that concession. That is a necessary consequence of the priority of Commonwealth law.
- [35]There is no direct inconsistency; there is no difficulty in principle and in practice in complying with the Commonwealth Act and s 48, even if the Commonwealth Act prevents the defendant from taking advantage of the concession in s 48(2)(a).
- [36]Far from the State Act being in some way inconsistent with the Commonwealth Act, it could be said to compliment it. Because of the limited time within which the concession in s 48(2)(a) is available, there is a particular incentive on defendants promptly to pay any amounts payable under the Commonwealth legislation so that they will be free to satisfy the judgment before the concession under the State Act expires. In this way the concession can be seen to be consistent with the provisions of the Commonwealth Acts, and their objectives. It is certainly not inconsistent with them.
- [37]The analysis in relation to the question of whether the Commonwealth legislation covers the field is not changed by the consideration as well of s 48(2). The matters dealt with by the Commonwealth and State legislation are really different; the Commonwealth legislation is concerned to protect the Commonwealth’s rights to recover money which the Commonwealth Parliament has determined is to be repayable in circumstances where the person for whose benefit it was paid has recovered a judgment against someone else. The concern of the State Act is to remedy the injustice which arises if for any reason judgment is not satisfied promptly.
- [38]Whether the Commonwealth Act “covers the field” is essentially a matter of intention of the legislature to be deduced from the terms of the Act in the circumstances in which it operates: the Mining Act case, at pp. 415-6 per Gleeson CJ and Gaudron J.
- [39]The question comes down to one of interpretation; does the Commonwealth Act on its true interpretation impliedly prevent interest from running under a State Act when satisfaction of a judgment is held up while the Commonwealth enforces its right of reimbursement. There is no reason why the purpose of the Commonwealth Act should require such an interpretation, and no reason why the Commonwealth legislature should be assumed to be impliedly interfering in this way with this beneficial state legislation. The express provision in s 33 of the Health and Other Services (Compensation) Act, which prevents interest from running only on the amount which has to be withheld under a preliminary notice under s 21, is consistent with this, because that amount is presumably to be paid to the Commonwealth (in part satisfaction of the judgment), so the plaintiff is not being kept out of this money. Whether the defendant is liable to pay interest then depends on when the Commonwealth’s cause of action accrues.
- [40]If the arguments of the defendant were correct, it would be possible for a defendant to postpone payment of a judgment, and potentially earn a significant amount of interest on the judgment sum, simply by delaying satisfaction of one of the statutory obligations to the Commonwealth. For example, if there was judgment in favour of the plaintiff for $1 million and there was a claim under the Disability Services Act 1986 to reimburse the Commonwealth $500, where notices under s 23(5) and (6) had been given, the judgment cannot be satisfied until the $500 has been paid. If the defendant’s argument were correct, the defendant in that situation could sit on the money and pocket the interest it earned for as long as it took the Commonwealth to get around to enforcing the obligation to recover the $500. I cannot accept that the Commonwealth Parliament would have intended that that result should have followed from this Act.
- [41]There is also the consideration that s 48 is of general application. If it operated only with respect to judgments which were not satisfied promptly because the defendant was complying with some requirement of some Commonwealth law which prevented the defendant from satisfying the judgment, different considerations would arise. But that is not the situation here.
- [42]It was submitted for the defendant that the accrual of interest can only be consistent with a present obligation to pay, and that the obligation to pay interest would necessarily be suspended in circumstances where the obligation to pay was suspended by operation of the Commonwealth Act.
- [43]There is however authority that interest will continue to run under s 48 notwithstanding that the judgment is not enforceable. In Tonkin v Johnson [1999] 2 Qd R 318 a judgment was outstanding for so long that execution on it could no longer issue without leave of the court, because of O. 47 r. 24, more than six years having elapsed since the date of judgment. It was held that it was open to the judge to give leave to execute for the amount of the judgment and interest under s 48 for the whole period, although as a matter of discretion it would have been open when giving leave to limit the amount of interest recoverable on execution of the judgment. It seems to me to follow from this decision that, so far as s 48 is concerned, in the absence of some orders to the contrary, interest will continue to accrue whether or not the judgment is enforceable. Furthermore, the considerations which justify a judgment carrying interest continue to apply in the case of a mere suspension of the obligation; the defendant is still able to profit from the delay in payment, and the plaintiff is still deprived of the benefit of the money.[15]
- [44]I accept that it would not be open for a State Act to impose a penalty on a person for doing something in compliance with a Commonwealth Act. If the imposition of interest were seen as a penalty, there would be operational inconsistency if a situation arose where the penalty under the State Act came to be imposed because of the defendant’s compliance with the Commonwealth Act. As it happens however that situation does not arise in the present case. There was no notice under the Social Security Act or under the Disability Services Act which prevented the defendant from satisfying the judgment, and the notice given under the Health and Other Services (Compensation) Act 1995 was given at such a time that the defendant could have paid the amount claimed and been free to pay the balance to the plaintiff within the 21 day concession period provided in s 48(2)(a). Accordingly this is not a case where any interest came to be payable under s 48 because the defendant was prevented from making a payment by a Commonwealth Act. Accordingly the defendant cannot rely on operational inconsistency as the basis on which to escape the liability to pay interest under s 48(1).
- [45]But in my opinion there is a more fundamental reason why that is the case. This analysis depends on the proposition that the State Act operates by imposing a penalty on the defendant for non-payment of the judgment. In my opinion that is not the function of s 48 at all. Rather its function is to recognise that delay in satisfaction of a judgment will work an injustice unless something is done to transfer from the defendant the benefit of being able to retain the money for that much longer, to the plaintiff who has lost the equivalent benefit because of the delay in satisfaction of the judgment. If the Commonwealth legislation requires the defendant to retain the money, the defendant gets the benefit of the interest it earns. The plaintiff is just as much deprived of that benefit whether satisfaction is delayed because of Commonwealth legislation or mere obduracy on the part of the defendant. Section 48 has nothing to do with punishment of the defendant; it is simply a matter of doing justice between the parties, by transferring to the plaintiff what would otherwise be a windfall gain to the defendant.
- [46]This approach is also supported by decisions that, where a judgment at trial is varied on appeal to increase the amount payable, interest on the new amount is payable from the date of the original judgment, unless the appeal court sets aside the original judgment and substitutes its own judgment, in which case interest will run from the date of the judgment on appeal: Jorgensen v Olive [1985] 2 Qd R 168; Mercantile Credit Ltd v Buckeridge [1986] WAR 149. In Gould (supra) the judgment after the trial was varied by the Full Court but restored by the High Court, which regarded interest under s 73 as running from the date of the judgment at trial on the full amount of the judgment as restored by the High Court. That must not have been seen as some sort of penalty on the defendant for failing to pay that amount between the judgment of the Full Court and the judgment of the High Court. It was the amount needed to be paid in order to do justice between the parties once the High Court had determined that the judgment sum ought to be the higher amount. So interest will run even under a judgment which is set aside or reduced, provided that it is later restored.
- [47]Once it is appreciated that the function of the State Act is not to impose a penalty, but to prevent a defendant from receiving a benefit from delaying in satisfying a judgment, whether or not by complying with the Commonwealth Act, in my opinion it necessarily follows that there is no operational inconsistency.
- [48]Counsel for the defendant sought to support this argument, and the characterisation of the obligation to pay interest as some form of penalty, by evidence[16] that commercial interest rates are significantly lower than the rate prescribed under the Regulation, which is currently ten percent per annum. That is true, although that does not I think affect the general proposition that the purpose of a statutory provision for interest is to transfer the benefit of holding the money from the defendant to the plaintiff. This simply reflects the fact that the statutory rate may well not coincide with commercial rates. At the moment the statutory rate is higher; but when Gould (supra) was decided, the then current statutory rate had to be increased to make it a commercial rate. I do not think however that the fact that at the present time there happens to be a rate prescribed by the regulation which is different, even significantly different, from what happens at the moment to be a commercial rate of interest affects the proper characterisation in principle of this legislation. I do not regard this legislation is imposing a penalty simply because at the moment the prescribed rate is out of line with commercial rates.
- [49]It follows that, unless some order is made under s 48, the defendant, not having satisfied the judgment within the 21 day concessional period, is required to pay interest under s 48. It is therefore necessary to consider whether relief should be granted on discretionary grounds.
Discretionary considerations
- [50]With regard to the exercise of the discretion, it was submitted that in this case the final clearance was not made available until 3 April 2002, well after the 21 day period, and that it was thereafter paid promptly, well within 21 days after that date. However, the clearances from the Commonwealth Rehabilitation Service and Centrelink were really precautionary only. As pointed out earlier, in the circumstances of this case there was no Commonwealth legislation the operation of which prevented this judgment being satisfied (except for a permissible deduction under the Commonwealth Act) within the 21 day period.
- [51]It may well be an appropriate precaution to wait until there is some specific notice that no moneys are sought by some or all of these authorities before satisfying the judgment. But there is no reason to use this caution as a justification for the defendant’s enriching itself at the expense of the plaintiff.
- [52]Counsel for the defendant properly drew to my attention the decision of Douglas J in Radford v M F & P M Sed Pty Ltd (Writ 130/97, 13.08.99, unreported, BC 9906622). In that case a judgment on 9 December 1998 was satisfied on 7 January 1999. Apparently the final clearance was received on 22 December, but a cheque was not forthcoming until 7 January. No doubt part of the delay arose from the intervention of the holidays at the end of the year. In that case it was submitted that the discretion should be exercised so that the 21 day period ran from the date on which the final clearance was obtained. However that approach was rejected. His Honour noted that during the period of the delay WorkCover had the benefit of the money it retained, and the plaintiff was further held out of his money, and that all the clearances had been obtained eight days prior to the expiration of the 21 day period. Notwithstanding the intervention of the holidays, his Honour thought there had been ample time to have provided a cheque before the 21 day period expired. He declined to modify the operation of s 48. He did note however that the position might be different if the delay in payment had been caused by delay on the part of the Commonwealth authorities.
- [53]I would not wish to differ from the approach adopted by his Honour, particularly in the circumstances of this case, where all of the relevant matters could have been dealt with and the judgment paid within the 21 day period. I regard it as a fairly serious step to deprive a plaintiff of interest on a judgment, given the essential function of the statutory provision that interest be payable, as explained earlier. There is certainly nothing in the conduct of the plaintiff to justify depriving him of the interest in this case.[17] I would not exercise my discretion to relieve the defendant from the operation of s 48. The defendant’s application is therefore dismissed.
- [54]Accordingly interest is payable at the statutory rate of ten percent per annum from the date of judgment, 19 February 2002, until the date of payment, 15 April 2002, a period of 55 days. Interest on the balance of the judgment of $216,669.49[18] at ten percent per annum for 55 days is $3,264.88.
- [55]I therefore order that the defendant pay the plaintiff $3,264.88 in satisfaction of its obligation under s 48 of the Supreme Court Act 1995. I order that the defendant pay the plaintiff’s costs of and incidental to each of the applications to be assessed.
Footnotes
[1]Affidavit of Hinton filed 15 July 2003 Exhibit DJH 19.
[2]Affidavit of Hinton filed 15 July 2003 para 5, and see Exhibit DJH 20.
[3]Affidavit of Hinton filed 15 July 2003 para 6, and see Exhibit DJH 21.
[4]Affidavit of Ponti filed 18 June 2003 Exhibit C.
[5]The position is more complicated where the loss suffered relates to the future as well as to the past, as discussed in Callinan (supra).
[6]1 and 2 Vict. c1 10, s. 17.
[7]The position is analogous to the jurisdiction of an appeal court to order the repayment of money paid under a judgment set aside on appeal, with interest: see the authorities discussed in Stubberfield v Whitman [No 2] [2003] QDC 8.
[8]Notices under s 78B of the Judiciary Act were given to the Attorneys, but none of them participated in the argument: Affidavit of Hinton filed 11 July 2003.
[9]Wallis v Downard-Pickford (North Queensland) Pty Ltd (1994) 179 CLR 388 at 398.
[10]Victoria v The Commonwealth (1937) 58 CLR 618 at 630, cited as authoritative in Telstra Corporation Ltd v Worthing (1999) 197 CLR 61 at 76.
[11]Re Wakim ex parte McNally (1999) 198 CLR 511.
[12]Gaudron J at p. 188.
[13]Per Hayne and Callinan JJ at p. 285.
[14]For an example of a Commonwealth Act which does deal with interest on a judgment, to the exclusion of state law, see Fruehauf Finance Corp Pty Ltd v Zurich Australian Insurance Ltd (1993) 32 NSWLR 735 concerning the Insurance Contracts Act.
[15]The reasoning in [46] below also supports the applicability of s. 48 notwithstanding that a judgment has been suspended.
[16]Affidavit of Nielsen sworn 10 November 2003, and filed by leave.
[17]The defendant did not seek a discretionary variation in the prescribed rate to substitute a commercial rate, so that is not in issue.
[18]The judgment amount, less the charge of $416.75.