McCarthy v McIntyre [1999] FCA 155

FEDERAL COURT OF AUSTRALIA

McCarthy v McIntyre [1999] FCA 155 INTEREST – pre-trial interest – date from which interest is to run. Federal Court of Australia Act 1976 (Cth), s 51A

Smallacombe v Lockyer (1993) 114 ALR 568 Ferrier v Civil Aviation Authority (1994) 55 FCR 28

RONALD IAN MCCARTHY v NEVILLE MCINTYRE

NG 672 OF 1996

JUDGE: BEAUMONT J.

DATE: 8 FEBRUARY 1999

PLACE: SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 672 OF 1996

BETWEEN: RONALD IAN MCCARTHY

First Applicant

MAXWELL MCCARTHY

Second Applicant

EDLAN NO. 54 PTY LIMITED

Third Applicant

AND: NEVILLE MCINTYRE

First Respondent

AURO ROMANO MCINTYRE

Second Respondent

NEVITORO INVESTMENTS PTY LIMITED

Third Respondent

AND BETWEEN: NEVILLE MCINTYRE

First Cross-Claimant

AURO ROMANO MCINTYRE

Second Cross-Claimant

NEVITORO INVESTMENTS PTY LIMITED

Third Cross-Claimant

AND: RONALD IAN MCCARTHY

First Cross-Respondent

MAXWELL MCCARTHY

Second Cross-Respondent

EDLAN NO. 54 PTY LIMITED

Third Cross-Respondent

JUDGE: BEAUMONT J.

DATE: 8 FEBRUARY 1999

PLACE: SYDNEY

REASONS FOR JUDGMENT (No. 3) (ON INTEREST AND COSTS)

BEAUMONT J: 1 I will now deal in principle with a number of further matters, most of which arise out of my reasons for judgment given on 11 September 1998. I will not make any formal final orders today pending calculations of interest to which I will refer shortly. I will merely stand the matter over to a date within the next 21 days to be agreed with my associate. I will stand the matter over so that short minutes may be submitted by the applicants recording the orders I propose to make. INTEREST ON THE RIVERVIEW LODGE CLAIM. 2 Edlan Pty Limited ("Edlan") submits that it should be awarded interest on the judgment sum of $505,476.43 against the respondent, Mr Auro McIntyre, on the Riverview Lodge claim from 4 September 1990 either as damages on the principle in Hungerfords v Walker (1989) 171 CLR 125 or pursuant to s 51A of the Federal Court of Australia Act ("the Act"). The respondent submits that no interest should be allowed or, alternatively, that interest should be allowed under s 51A of the Act for the period since 1 December 1997, being shortly after Edlan first demanded repayment of the sum in question. 3 In my view, interest should be allowed under s 51A of the Act from 1 December 1997 at the rate prescribed by the rules of the Supreme Court of New South Wales in accordance with the usual practice of this Court when sitting in this State (see Namol v A.W. Baulderstone Pty Limited (1993) 43 FCR 388). 4 In support of its contention that interest as damages under the general law should not be allowed, it is submitted on behalf of the respondent that this claim was not pleaded or pursued in any substantive sense in the course of the proceedings and that this is a condition precedent to the award of interest under the general law (see, eg, Hobartville Stud Pty Limited v Union Insurance Company Limited (1991) 25 NSWLR 358 at 361 - 366). 5 Although there appears to be some force in the submission, I have come to the conclusion that I need not pursue it because as is frankly acknowledged on behalf of Edlan, the measure of interest to be allowed under s 51A would not differ in any significant sense from the interest that might be awarded under the general law. Under the terms of s 51A interest will be awarded on application unless good cause is shown to the contrary. Although a submission was advanced on behalf of the respondent that such cause has been shown, I cannot accept the submission. 6 The contention was developed on behalf of the respondent at some length in his written submission. I will not attempt to summarise it. In essence, the argument advanced in this behalf really seeks to re-agitate the factual and other dimensions of the Riverview Lodge claim itself. I do not propose to re-enter into that debate nor is it appropriate that I do so. I merely re-state my opinion that nothing that has been put before me in the present connection has persuaded me that I should depart from the presumption exhibited in s 51A. 7 However, a contentious question arises as to the date from which interest to be ordered is to run. There was no demand for the amount in question until November 1997. The statement of claim was not amended relevantly until 3 December 1997 and the amendment was made over the respondent's objection. 8 In those circumstances it is a fair exercise of the judicial discretion conferred by s 51A to order that interest be allowed only from 1 December 1997 (cf. Smallacombe v Lockyer (1993) 114 ALR 568 (at 575); Ferrier v Civil Aviation Authority (1994) 55 FCR 28 at 92-3). 9 I propose then to order that the judgment of $505,476.43 in favour of Edlan on the Riverview Lodge claim carry interest from 1 December 1997 at the rates prescribed by the Supreme Court of New South Wales at the material time. 10 I direct that the solicitors for the parties confer as soon as practicable with a view to agreeing on that calculation, if possible, and agreeing further with the calculation of interest on the cross-claim which I will deal with below. 11 I further direct that in default of agreement between the solicitors within seven days, the matter is to be listed forthwith before a Registrar for this purpose.