Trade Practices - whether interest may be included in damages under 5.32 of Trade Practices Act. Practice and FPracedure - judgment defence - claims under whether s.51A of Federal Court Act be ciaimed on actions under statute of Judiciary Act upon provision allowing awards of interest 'in Trade Practices Act entered in default of filing and at common law - applies - whether interest can and/or at law - effect of s.79 in State Supreme Court Act all courts' - observations concerning appropriate order in circumstances. Trade Practices Act 1974+ s.52, sub-ss.53(aa), 53A(1), ss.82 & &7 Federal Court of Australia Act 1976 Judiciary Act 1903 5.79 Supreme Court Act 1935 (W.A.) s.32 =.51A Supreme Court Act 1958 (Vic.) ss60 and 79A NELLA, BROWN & ORS v. KINGIA PTY. LTD & ORS No. WA G18 of 1983 TOOHEY J. PERTH 6 AUGUST 1985 WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION JUDGE MAKING ORDER DATE OF ORDER Pa ia n han a a Fh H the) o tad JOHN BAPTIST NELLA, CLIFFORD SYDNEY BROWN, BARBARA SYBIL BROWN and IAN WILLIAN BROWN Applicants and KRINGIA PIY. LTD. First Respondent TAN DAVED ASPHAR, PETER ANTHONY McCOMISH and ROBERT WILLIAM WATERS Second Respondents HILLDODD PITY. LTD. Third Respondent MINUTE OF ORDER Toohey J. 6 August 1985 WHERE MADE : Perth THE COURT ORDERS THAT: 1. Judgment be entered for the applicants against the third respondent for damages to be assessed 2. ra The third respondent pay ta the applicants their costs of the application including one-half of the casts of the applicants' motion for judagment. Note: Settlement and entry of orders is dealt witn in Order 36 of the Federal Court Rules IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION No. WA G18 of 1983 ~~ BETWEEW: JOHN BAPTIST NELLA, CLIFFORD SYDNEY BROWN, BARBARA SYBIL BROWN and IAN WILLIAN BROWN Applicants and KINGIA PTY. LTD. First Respondent IAN DAVID ASPHAR, PETER ANTHONY McCOMISH and RORERT WILLIAM WATERS Second Respondents HILLDODD PTY. LTD. Third Respondent CORAM: TOOHEY J. 6 August 1985 REASONS FOR JUDGMENT In these proceedings the applicants claim damages against all respondents. So far as the third respondent is concerned, the applicants seek damages "pursuant to section 82 of the Trade Practices Act in relation to the ... Third Respondents' breaches of Section 52 of the Act and damages at common law". The applicants have moved for judgment against the third respondent by reason of that respondent's failure to comply with an order directing it to file and serve its defence to the stacement of claim. Counzel appeared for rhe third respondent on rt ni tu the hearing of motion but did not appose the relief sought. What would otherwis2 he a straight forward matter has become complicated because of a claim by the applicants that they should Qo have judgment, not only for damages to be assessed, but also for interest on such sum as may be assessed. They have asked the Court to direct, as part of the default judgment, that the third respondent pay interest at the rate of 13% per annum from 3 March 1981 (the date when tne causes of action arose} until the assessment of damages. The causes of action arose before s.51A of the Federal Court of Australia Act 1976 came into operation and the applicants therefore rely upon the proposition that 5.32 of the Supreme Court Act 1935 of Western Australia is available to them. Section 32, which came into operation on 20 June 1983, reads: "32.(1) In any proceedings for the recovery of any money (including any debt or damages or the value of any gocds), the Court may order that there shall be included, in the sum for which judgment is given, interest at such rate as 1t thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date when the judgment takes effect. (2) an, (3) This section applies to proceedings ina Local Court, except where the sum for which judgment is qiven does not exceed $750." aBichougdh the applicants motien far judament was unopposca, the claim for interest gives rise to several questions concerning the power ot this Court. In support of the submission that s.32 of the Supreme Court Act was available toa the applicants, their counsel relied on the recent decision of a Full Court of this Court in Centrepoint Freeholds Pty. Ltd. v. T.N. Lucas Pty. Ltd. (1985) A.T.P.R. 40-564, In that case Sweeney and Woodward dJJ., Neaves J. dissenting, held that the primary judge in proceedings against Centrepoint for damages for breaches of 55.52, 53(aa) and 53A(1) of the Trade Fractices Act 1974 and fraudulent misrepresentations, should have given effect to s.79A of the Supreme Court Act 1958 of Victoria. Subsection 79Ai1) reads: "79R(1L) The Judge upon application shall in all actions for the recovery of debt or damages give damages ain the nature of interest at such rate not exceeding the rate for the time being fixed under section 2 of the Penalty Interest Rates Act 1983 as he thinks fit from the commencement of the action until the entry of the judgment unless good cause is shown to the contrary over and above the debt or damages awarded by the court or jury." The yeasoning which lead the majority to their conclusion may be summed up in this way: lL. Section 79 of the Judiczary Act 1902 provides: "The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the taws be oinding an ali Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable". oF, tne Commonwealth, Section 79A of the Supreme Court Acct (Vic.) is in Part VII of thac Act, 5.60 of which reads: "The several rules of law enacted by Part VIL of this Act shall unless express provision 15 otherwise made be in force and receive effect in all caurts whatsoever so far as the matters to which such rules relate shall he respectably coqnizable by such courts." The award of damages in favour of T.N. Lucas Pty. Ltd. was based upon findings in its favour on the cause of action arising under sub-s.52(1) of the Trade Practices Act and causes or action arising under the common law in the exercise of the Court's accrued jurisdiction. The latter causes of action could have bean tried in the courts of Victoria in which case judgments upon them could have included damages by way of interest pursuant to s.79A. Section 79 of the Judiciary Act is not limited to laws relating to procedure, evidence and the competency of witnesses. The section includes those matters in the laws of the state which, subject to the exceptions set out therein, are binding on all courts exercising federal jurisdiction in that state. The policy of the section is that, unless otherwise provided by the Constitution or the laws of the Commonwealth, there should he uniformity in the law applicable ta the resolution of a matter whether it is tried Lrnoa 6ofederai courk an a state or cr 2 coure of that state. "On principle, ait seems that this policy should apply ina case sttch as the present to a judgment based upon the law of the State" 'at pp.46,553-46,554). Re Section 79A is not so much concerned with the definition and regulation of the powers and procedures of the Supreme Court of Victoria as it is with conferring upon a party, entitled ta recovery of a debt or damages, an additional right to receive damages by way of interest. "The command to the judge is merely the means chosen to effect the desired end" (at p.46,555). The language of 5.60 of the Supreme Court Act (Vic.), in speaking of "all courts whatsoever", is wide enough to apply to the Federal Court. The Court remitted the application to the primary judge "for the purpose of his determining all questions relating to damages by way of interest" (at p.46,556). Tt should he noted that the Court found it umnecessary to express an opinion on an alternative submission by T.N. Lucas Pty. Ltd. that the power to award damages under 55.82 and 87 of the Trade Practices Act itself included a power to award interest. Neaves J. agreed with the primary judge that the language of 55.82 and 87 of the Trade Practices Act was not apt to require or authorise an award af damages by way of interest to recoup loss due entirely to delay in payment of a sum ultimately Pn held ta se aue. "Such ioss 2s nor, in mv view, croneriy described as icss surfered by reason of conduct in contravention of a provision or Part IV or Vo af che Act" (at p.46,560), He was of the opinion that 5.79A could mot he adequately described as a law fl ""yelating to procedure" within s.79 of the Judiciary Act. "Tt partakes of the character of a substantive provision which will, in the cases to which it applies, operate to increase the amount awarded by way of damages to a successful plaintiff" (at p.46,962). The basis ror his Honour's dissent may be found in the following passage from his reasons for judgment: "In my opinion, to conclude that sec.79A was, by virtue of sec.79 of the Judiciary Act 1903, made binding on the learned primary Judge when determining the amount for which judgment was to be entered in this case would not simply be giving to that provision an Operation which its language is wide enough ta encompass but would be qiving it a different meaning from that which it bears as an enactment of the State of Victoria. It would involve converting it into a provision requiring a judge of this Court to carry out the function which by its terms it confers on a judge of the Supreme Court of Victoria when hearing and determining an action of the kind to which it refers. This, in my view, it is not permissible to do" (at p.46,562). However persuasive the reasons of Neaves J. may be, I am bound by the views of the majority. But it is cf some importance to determine the ratio decidendi of the majority decision. Certainly Sweeney and Woodward JJ. left open the question whether the power to award damages under ss.82 and 87 of the Trade Practices Act itself includes a power to award interest. Because their Honours spoke of the Federal Court exercising federal jurisdiction in Victoria and, in the course of doing so, enforcing sal gbients which derive rrom the law of that State and because they spoke of a policy oF uniformity in the law applicable to a matter, whether tried in a federal court ina state or by a court of that state, I take their Honours to be holding that s.79A is applicable where a federal court has, in the exercise of its accrued jurisdiction, awarded damages on a common law cause of action. In other words, I do not understand Sweeney and Woodward JJ. to have heid that in the case of judgment for damages for breach of a section of the Trade Practices Act, a similar conclusion necessarily operates. Counsel for the applicants submitted that, in the event of a judgment in default of the filing of a defence, the judgment need not, indeed should not, identify a particular cause of action. It should simply be a judgment for damages to he assessed. The basis of this submission was that, in the absence of a defence, all the allegations in the statement of claim should be taken to be admitted. If, therefore, a statement of claim asserts contraventions of the Trade Practices Act and conduct giving rise toa cause of action at common law, a judgment by default contains an implied recognition of the applicants' entitlement to damages both by statute and at law. Although the submission was not taken further, I assume that counsel would submit that on an assessment of damages, where one cause of action may produce a different monetary result from another, the applicant may opt for one or other measure of damages or may ask the court to assess damages under both heads and then opt for the higher amount. mm tb uh Gn nme nearing ar ryas morinn T asked coun 21 for the it applicants whether iudgment was being sought for breach of the Trade Practices Act or at common law. The question was asked in relation to the claim for interest. Counsel replied that damages were sought for breach of the Act. But I do not think that counsel can be held to that statement in the sense that the form of judgment to he entered against the third respondent must identify the cause of action in respect of which damages are claimed. I agree with counsel that judqment should be for damages to be assessed and that, in the absence of a defence, the matter will come before the Court for assessment on the basis that all the allegations in the statement of claim, at any rate all relevant allegations, must be taken to have been established. See Young v. Thomas £18921 2 Ch. 134. The customary form of judgment provided For in rules of court in this country does no more than adjudgde an applicant ar plaintiff to be entitled to damages to be assessed. The question here is not one of the extent to which a judgment by default may cperate as an estoppel, as to which see Kok Hoong v. Leong Cheong Kweng Mines Ltd. £19643 A.C. 993. Holding, as Ido, that the applicants are entitled to judgment for damages to be assessed, the majority decision in Centrepoint Freehoids Pty. Ltd. v. T.N. Lucas Pty. Ltd. compels the conclusion that the applicants are entitled to invoke 5.32 of the Supreme Court Act (W.A.)?} and to ask the Court for an award of interest, at any rate in respect of damages assessed on a common law cause of action. Although the applicants' causes of action arose hefore 5.32 tock effect, the section has been held retrospective in its operation. Brassey v. Graham (unreported There is however a question whether s.32 may be invoked at this staqe of the proceedings, and if so to what extent, or whether a determination of the rate of interest, the period for which it is awarded and of the amount involved 15 a matter for the Court when damages have been assessed. In the present case judqment will be entered by direction of the Court and not by reason of same administrative step. In consequence the decision in City Mutual Life Assurance Society Ltd. v. Giannarelli £19772 V.R. 463, ain which McInerney J. held that 5.79A of the Supreme Court Act (Vic.) did not permit the Prothonatory or an officer on his staff ta add an amount hy way of interest toa judgment entered in default of appearance, has no application. However sub-s.32(1) of the Supreme Court Act (W.A.) empowers the Court, in proceedings for the recovery of damages, to order "that there shall be included, in the sum for which judgment is given, interest at such rate as it thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date when the judgment takes effect". Counsel for the applicants has sought no more than that the judgment for damages to be assessed shall include interest on the sum assessed at the rate of 13% per annum from 3 March 1981 to the date of assessment. The amount on which interest is payable, Lo. 2fo at ail, muec ac courze depend upan the assessment of damages In my view sub-s.32(1) contemplates that interest shall be included in the sum for which judgment is given, tnat is that + damages must first be assessed before the Court decides whether, in the circumstances, interest shail be payable and if so at what rate and for what period. I do not accept that it is appropriate if andeed it is within power for the Court, at this stage of the proceedings, ta determine a rate of interest and the period in respect of which it shall be paid when there is, in the language of the subsection, no "sum for which judgment is given". The applicants do nat face the problem that met the plaintiff in Aro-Allan Veneer Ftv. Ltd. v. Public Trustee (1978) 18 S.A.5.R. 428 where it entered judgment in default of defence for a liquidated amount and then sought an award of interest on the judgment debt for a period before judgment was entered. Jacobs d. held that the relevant provision of the legislation of South Australia did not empower the making of an award of interest after final judgment had been entered. In the present case 5.32 of the Supreme Court Act (W.A.) requires, in my opinion, that damages be assessed; thereafter, in respect of the judgment then given, interest may be included. In any event the determination of questions relating to interest is more appropriately dealt with by the Court when assessing damages. For these reasons I hold that the applicants are entitled, at this stage, only to judgment against the third respondent for damages to be assessed and for costs to be taxed. Li. beacause most of the time occupied an the motion tor iudyqment was taken up with submissicans on che question of interest, a matter an which the applicants have not succeeded, Chey should, on taxation, al fa have only one-half of the costs of their motion for judgment. I certify that this and the ten preceding pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Toohey. Associate Dated: 6 August 1985