DISTRICT COURT OF QUEENSLAND

1. [1]
   On 12 May 2014 I delivered judgment and awarded judgment for the plaintiff in the sum of $115,000.00 and invited further submissions on the issue of interest.

2. [2]
   The parties made oral submissions and by leave subsequently filed written submissions. This judgment is the determination of the issue of interest on the judgment sum.

Interest

3. [3]
   Section 58 of the Civil Proceedings Act 2011 (“the Act”) provides for interest up to judgment, relevantly as follows:

“58Interest up to judgment

3. (3)
   The court may order that there be included in the amount for which judgment is given interest at the rate the court considers appropriate for all or part of the amount and for all or part of the period between the date when the cause of action arose and the date of judgment.”

Interest calculation

4. [4]
   The Queensland Courts website publishes an Interest Calculator using Reserve Bank of Australia pre-judgment rates.

Submissions

5. [5]
   By reference to the Interest Calculator Mr Horvath for the Plaintiff has calculated interest from 12 March 2006, the date the cause of action accrued, to the date of judgment, in the sum of $88,423.98. Mr Somers for the defendants has calculated interest from 08 March 2012, the date the Claim was filed, in the sum of $20,953.00.

Discussion

6. [6]
   An award of interest pursuant to section 58 of the Act is, of course, discretionary and is compensatory in character. It has been described in the High Court as “an essential element in the achievement of true compensation” for the damage (or loss) suffered by a claimant and allows a plaintiff “to be placed in or restored to the situation, in which he or she would have been” (in terms of this case), but for the sale of the property at an undervalue: Haines v Bendall (1991) 172 CLR 60, at 66-67.

7. [7]
   His Honour Justice Daubney in Cashmere Bay Pty Ltd v Hastings Deering (Australia) Ltd (No.2) [2011] QSC 134, wrote at [12]:

“The discretion to award interest under the statute must, of course, be exercised judicially and in accordance with legal principle. In Queensland, it was held by Andrews SPJ (Connolly and Thomas JJ concurring) in Hadzigeorgiou v O'Sullivan that “the proper approach to an exercise of discretion [under the statute] as to the granting of interest is that it ought to be granted unless there are proper reasons for withholding it”.”

Determination

8. [8]
   Mr Horvath submitted that given the findings in the judgment, interest ought to be allowed from the date of the accrual of the action.

9. [9]
   Mr Somers submitted that despite the failure of the defence of laches, the plaintiff ought not, in effect, be ‘rewarded’ for the delay in commencing his claim: that is, interest as sought on behalf of the Plaintiff would be inequitable. He also submitted that the Reserve bank of Australia default rate, which applies in the calculation of interest, is significantly more than the interest the Plaintiff might otherwise have earned on the money if he had invested it. Of course, the latter submission assumes that a lower interest rate would have applied and that may not necessarily have been so, depending on if, how and where the money was invested.

10. [10]
    I rejected the defence of laches in the judgment. I accepted the evidence of the Plaintiff as to why he deferred the commencement of the claim – he did not want to sue his father. I found that he was entitled to do that and that in so doing he had not been at all unreasonable: Judgment, at paragraphs [130] to [138].

11. [11]
    Despite the rejection of the defence of laches, should the calculation of interest be reduced from the sum calculated by Mr Horvath by reason of delay in filing the Claim? The amount of interest calculated by the Plaintiff is substantial when measured against the amount of the judgment. However, the integrity of my findings would in my view be challenged by my calculating interest on the basis submitted by Mr Somers, or indeed on any other basis – such as, by example, arbitrarily halving the interest awarded between the date of the accrual of the action and the date of filing the Claim – because to do so would conflict with my finding that the property had been sold at an undervalue.

Conclusion

12. [12]
    There is no proper reason for me to withhold interest for the period sought by Mr Horvath. The Plaintiff has been kept out of the money he could otherwise have received, on a sale of the property at true value, by reason solely of the conduct of Mrs Whittaker and the late Mr Leo Knezevic.

13. [13]
    I revoke Order 3 in the Judgment and in lieu thereof make the following Order:

“3.The plaintiff be entitled to interest in the sum of $88,423.98.”

ORDERS

14. [14]
    The Orders in the proceeding are in terms of the attached draft as amended.