Stubberfield v Whitman [No. 2][2003] QDC 8

DISTRICT COURT OF QUEENSLAND

1. [1]
   If a plaintiff obtains judgment for payment of money after a trial and in satisfaction of that judgment the money is paid, but the judgment is subsequently reversed on appeal, can the money that the plaintiff obtained be recovered by the defendant, and how? The answer to the first part of this question is obvious enough, although the basis of the recovery, and to the answer of the second part of the question, were not immediately familiar to me when this point arose, since in practice it is rarely necessary for a successful appellant in this situation to require the assistance of the court to obtain reimbursement.

2. [2]
   The successful defendant is entitled to recover the money paid by separate proceedings, having a cause of action for money had and received: Lee v Mallam (1910) 10 SR (NSW) 876. However it is not necessary for separate proceedings to be commenced, since the appeal court can make an order for repayment in the course of the appeal, that being incidental to the judgment which the court has pronounced: Government Insurance Office of NSW v Healy [No. 2] (1991) 22 NSWLR 380 at 385 per Kirby P. In the leading Australian authority on the point, the High Court has referred to the appellant’s position as one of entitlement. In Commonwealth of Australia v McCormack (1984) 155 CLR 273 at 276 the court said:

“An appellant who has satisfied a judgment for the payment of money is entitled, on the reversal of the judgment, to repayment of the money paid by him with interest.”

3. [3]
   The court went on to say that the High Court had jurisdiction, when it dismissed an appeal from the judgment of the Full Court of the Federal Court, to make an order for the repayment of money paid in satisfaction of a judgment of the Supreme Court which had been reversed by the Full Federal Court: p. 277. An order for repayment can be made at the time when judgment is delivered - Goode v Thompson [2002] QCA 138 – or subsequently, even after the order on appeal has been drawn up: Production Spray Painting and Panel Beating Pty Ltd v Newnham [No. 2] (1991) 27 NSWLR 659.

4. [4]
   The various authorities to which I have referred also say that there is an entitlement to interest. That entitlement is mentioned expressly in McCormack (supra), although in that case interest was not sought and the court did not deal with the basis upon which interest would be allowed. In Healy (supra) Kirby P. found the power to award interest in s. 95 of the Supreme Court Act 1970 (NSW), the equivalent of s. 48 of the Supreme Court Act 1995 of Queensland, a provision which applies in all courts. Sub-section 1 of that section provides:

“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.”

There are then exceptions in sub-section (2), neither of which would apply in the present case.

5. [5]
   Kirby P. said that the power to order otherwise was not limited to a power to order that this section did not apply, but permitted the court to vary the prima facie position established by the section so as to do justice in the particular circumstances of the case. Although on its face interest would run under this section only from the date when the order for repayment was made, Kirby P said that the effect of the power to order otherwise was that the court when making an order for repayment could order that the money paid carry interest from the date on which it had been recovered under the judgment which had been since been set aside, until the date on which it was repaid.

6. [6]
   The same approach was adopted in Queensland in Goode v Thompson (supra) where on appeal by the defendant the amount of the judgment in favour of the plaintiff was reduced after the defendant had satisfied the judgment. The Court of Appeal ordered, pursuant to s. 48, that the respondent repay to the appellant the amount of the reduction together with interest at a particular rate from the date on which the judgment was satisfied to the date of repayment: see para [43]. In that case the judgment had been satisfied by paying money to the Public Trustee to hold on behalf of the plaintiff, and there was evidence showing that the actual return to the plaintiff on the money so held was 5.2% per annum, so the court ordered that the interest be at that rate rather than the rate fixed by the regulation.

7. [7]
   In the present case the plaintiff obtained judgment in the Magistrates Court on 29 October 2001 for an amount of $19,951.24, comprising $12,401.74 by way of claim, $1,000 for interest and $6,449.50 for costs. There was an application to stay execution on that judgment pending an appeal to this court, which application was refused by another judge in November 2001. Subsequently the Official Receiver as trustee in bankruptcy of the first defendant, paid the plaintiff the sum of $20,795.91 in satisfaction of an enforcement warrant obtained by the plaintiff; presumably the difference between this amount and the judgment sum reflects costs of enforcement. The actual date of payment does not appear on the material before me, but it is clear from a letter on behalf of the Official Receiver on 30 November 2001 that payment had been made by then.

8. [8]
   On 3 December 2002 I allowed the appeal and set aside the judgment, and ordered in lieu that the plaintiff’s claim in the Magistrate’s Court be dismissed. Accordingly, in accordance with the authorities to which I have referred, the appellants are entitled to be repaid the amount recovered on execution, together with interest. An application was subsequently made to me by the appellants seeking such an order, and that application (and a cross application for a stay pending a further appeal to the Court of Appeal) came before me on 31 January 2003. The application for stay was heard first and the stay was refused. I then ordered that the amount obtained on execution, $20,795.91, be repaid by the plaintiff to the defendants by 7 February 2002. Once the stay application was refused, that order was not opposed by the respondent. Being unsure about the question of interest, I reserved consideration of that issue.

9. [9]
   In the light of the authorities referred to earlier it is apparent that I should order that the respondent pay interest to the appellants on the amount recovered from the date on which it was recovered until the date on which it was repaid. That involves ordering otherwise under s. 48 of the Supreme Court Act 1995. With regard to the rate of interest however there is no material before me which would justify my departing from the prima facie rate fixed by regulation pursuant to the section. The Supreme Court Regulation 1998 in s. 4 fixes a rate for the purpose of s. 48 at 10% per annum.

10. [10]
    I therefore order that the respondent pay to the appellants interest on the sum of $20,795.91 from 1 December 2001 until the date of repayment at 10% per annum.

11. [11]
    In a further affidavit the appellants have sought that the amount ordered to be repaid be varied, to include an amount of $2,000 paid by an appellant prior to the proceeding being commenced, and taken into account in quantifying the claim. But that sum was not paid under the judgment set aside, so I cannot order that it be repaid. The appellants had brought a counterclaim in the Magistrates Court, but that was dismissed. On appeal I held that it ought to have been struck out for want of jurisdiction. There is therefore no basis for granting any relief which might have been obtained by counterclaim, such as the recovery of that $2,000. This request therefore must be refused.