Supreme Court New South Wales Medium Neutral Citation: Lorebray Pty Ltd v Liddy (No 3) [2024] NSWSC 1257 Hearing dates: On the papers Decision date: 08 October 2024 Jurisdiction: Equity Before: Peden J Decision: See [28] Catchwords: JUDGMENTS AND ORDERS — Amending, varying and setting aside — Application under r 36.16 Uniform Civil procedure Act 2005 (NSW) — Whether jurisdiction enlivened — Whether power should be exercised to vary principal judgment to include order for pre-judgment interest Legislation Cited: Civil Procedure Act 2005 (NSW) s 100 Uniform Civil Procedure Rules rr 36.16, 36.17 Cases Cited: Bernley Corporation Pty Ltd v AFR Group Pty Ltd t/as Anytime Fitness Randwick (No 2) [2019] NSWDC 366 Consolidated Lawyers Ltd v Abu-Mahmoud [2016] NSWCA 4 Falkner v Bourke (1990) 19 NSWLR 574 Faraday v Rappaport [2007] NSWSC 34 Hashman v Australian Medico-Legal Group Pty Limited [2016] NSWSC 1773 Lorebray Pty Ltd v Liddy (No 2) [2024] NSWSC 1020 Majak v Rose (No 5) [2017] NSWCA 238 Mendonca v Tonna (No 3) [2020] NSWCA 332 Miller Heiman Pty Ltd v Sales Principles Pty Ltd [2017] NSWCA 106 Ogilvie v Adams [1981] VR 1041 Ottavio v Hayvio [2011] NSWSC 1125 Owlstara v State of New South Wales (No 2) [2020] NSWCA 335 Spotlight Pty Ltd v Fatseas Investments Pty Ltd [2020] NSWCA 132 Waterhouse v Independent Commission Against Corruption (No 2) [2015] NSWCA 362 Young v Queensland Trustees Ltd (1956) 99 CLR 560 Category: Consequential orders Parties: Lorebray Pty Ltd (First Plaintiff) Peter John McNamee (Second Plaintiff) Stephen John McNamee (Third Plaintiff) John Christopher McNamee (Fourth Plaintiff) Philippa Margaret Hardy (Fifth Plaintiff) Christine Liddy (First Defendant) William John McNamee (Second Defendant) Sally-Jane Margaret Collignon (Third Defendant) Representation: Counsel: M Condon SC and H Rogers (Plaintiffs) G O'Mahoney and A Flick (First Defendant) Solicitors: Garland Hawthorn Brahe (First Plaintiff) Swan Lawyers (Second to Fifth Plaintiffs) Gilbert + Tobin (First Defendant) Henry William Lawyers (Second and Third Defendants) File Number(s): 2019/00395533 Publication restriction: Nil JUDGMENT 1. On 15 August 2024, I handed down the principal judgment in this matter, which involved a dispute between the McNamee siblings as to whether two payments advanced by J & M McNamee Holdings to the first defendant, Ms Christine Liddy, were a gift or loan: Lorebray Pty Ltd v Liddy (No 2) [2024] NSWSC 1020. I found that both payments were loans repayable on demand, and ordered the first defendant pay the first plaintiff, Lorebray Pty Ltd, $1,250,000: at [75]-[76]. 2. By notice of motion, the plaintiffs seek an order pursuant to r 36.16 Uniform Civil Procedure Rules 2005 (NSW) (UCPR) that the first defendant pay pre-judgment interest on the loans from the dates of the advances or the commencement of the proceedings. The same order is sought, in the alternative, pursuant to the slip rule: r 36.17 UCPR. 3. For the reasons below, I am satisfied that the orders sought should be made under r 36.16(1) UCPR. As such, it is not necessary to consider whether the orders could alternatively be made under r 36.17 UCPR. Power under r 36.16 UCPR 1. There is no dispute that the notice of motion was filed within the timeframe specified by r 36.16(3A). Rule 36.16(1) therefore applies: The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order. 1. The relevant principles guiding the Court's power under r 36.16(1) were considered in Majak v Rose (No 5) [2017] NSWCA 238 (Majak No 5), where it was noted at [12] that the purpose of the rule is "to permit readily identifiable, readily rectifiable, inadvertent errors to be corrected without the complication and expense of an appeal" (Leeming, Simpson JJA and Emmett AJA). 2. It will ordinarily be appropriate to exercise the power under r 36.16(1) where a matter has not been addressed by the court "by accident and without fault" of the party seeking reopening: Owlstara v State of New South Wales (No 2) [2020] NSWCA 335 at [7] (Basten, Meagher JJA and Emmett AJA); see also Consolidated Lawyers Ltd v Abu-Mahmoud [2016] NSWCA 4 at [39] (Macfarlan JA, Bathurst CJ and Tobias AJA agreeing). 3. The first defendant rightly emphasises that use of r 36.16(1) should be "extremely rare" and that the Court must have regard to the public interest in maintaining the finality of litigation: see eg Majak No 5 at [16]. She also refers to the following distinction, drawn in Waterhouse v Independent Commission Against Corruption (No 2) [2015] NSWCA 362 at [17] (Basten JA, Sackville and Emmett AJJA) and cited with apparent approval in Majak No 5 at [18]: [T]here is a distinction to be drawn between the court acting upon a misapprehension as to the facts or the relevant law, on the one hand, and, on the other, the court reaching a conclusion which, in the view of the applicant for re-opening, involves a mistake. 1. In referring to this distinction, the first defendant apparently seeks to deny that the Court's power under r 36.16 UCPR is enlivened, on the basis that there has been no misapprehension by the Court of any applicable laws or relevant facts as such. That may be accepted. Nor is this a case where the applicant is seeking to challenge a conclusion reached by the Court, which it regards as a mistake. 2. Instead, as the plaintiffs submit, this is a case where the further amended statement of claim included a claim for pre-judgment interest, addressed in the plaintiffs' opening written submissions, but overlooked by the Court, which did not address the claim in the principal judgment. 3. Here, where the plaintiffs' claim for pre-judgment interest was raised in pleadings and submissions, but overlooked by the Court, I am satisfied that the claim was not addressed by accident and without any fault on the part of the plaintiffs, so as to enliven the Court's power under r 36.16(1) UCPR. Pre-judgment interest 1. Under s 100(1)(b) Civil Procedure Act 2005 (NSW), interest may be awarded on a money judgment from the time when the relevant cause of action arose. Although s 100 confers a discretion, interest is "almost invariably to be allowed" when a money judgment is obtained: Miller Heiman Pty Ltd v Sales Principles Pty Ltd [2017] NSWCA 106 at [84] (Macfarlan JA, McColl JA and Sackville AJA agreeing), citing Falkner v Bourke (1990) 19 NSWLR 574 at 576. 2. As noted above, both advances were loans repayable on demand: at [76]. A cause of action for the repayment of money advanced pursuant to a loan repayable on demand arises from the date of the advance and not the date on which demand for repayment is made: see eg Young v Queensland Trustees Ltd (1956) 99 CLR 560 at 566–567 (Dixon CJ, McTiernan and Taylor JJ); Ogilvie v Adams [1981] VR 1041 at 1043 (Fullagar J); Faraday v Rappaport [2007] NSWSC 34 at [102] (White J, as his Honour then was). 3. It follows that the Court may award pre-judgment interest under s 100(1)(b) from the dates on which the advances were made. 4. I accept that pre-judgment interest should be awarded, but reject the plaintiffs' primary submission that it should be awarded from the dates the advances were made, being the dates on which the causes of action accrued. As Gleeson JA observed in Spotlight Pty Ltd v Fatseas Investments Pty Ltd [2020] NSWCA 132 at [103]–[104] (White JA and Emmett AJA agreeing) (citations omitted): … Interest is compensatory; it is not to be withheld to punish delay. It has been said that interest should generally be awarded on the "neutral" basis that the defendant "ought to have paid" the plaintiff money at a particular time, but did not and since that time the plaintiff has been out-of-pocket of that money and the defendant has had the benefit of it. Delay is a relevant factor which the Court should take into account when determining whether or not to award interest or to reduce interest… Generally where delay is treated as relevant it is used to reduce the period over which interest is awarded. 1. Gleeson JA went on at [110] to consider (but did not need to decide) that the claimant's delay of 8 years from investigating before commencing the claim was "prima facie productive of unfairness" to the defendant, where there was no evidence that the defendant had "notice or early notice" that such a claim would be brought until it was commenced. 2. Here, the Court was not asked to find that repayment was demanded, or that a claim for repayment had been foreshadowed, prior to the commencement of the proceedings. Nor was there any indication that the first plaintiff needed time to investigate the loans that it had advanced before commencing proceedings. 3. In these circumstances, I am not satisfied that the first defendant "ought to have paid" the first plaintiff on the dates of the advances or at some other date prior to the commencement of the proceedings. Further, I consider that the first plaintiff's delay in commencing the proceedings was such that it would be "prima facie productive of unfairness" to order pre-judgment interest to run from those dates, and no case to the contrary was run at the trial. 4. Instead, I accept the plaintiffs' alternative submission that pre-judgment interest should run from the date these proceedings were commenced. 5. This result is consistent with other decisions of this Court, in which pre-judgment interest has been ordered from the date repayment was demanded under a loan repayable on demand, and not from the date the loan amount was advanced: see eg Ottavio v Hayvio [2011] NSWSC 1125 at [15]-[16] (Ward J, as the President then was); Hashman v Australian Medico-Legal Group Pty Limited [2016] NSWSC 1773 at [35] (Brereton J). 6. At the trial, the first defendant did not make any written or oral submission that the Court should refrain from exercising discretion under s 100(1)(b) Civil Procedure Act or should exercise that discretion in a particular way. However, the first defendant now submits that the Court should refraining from exercising that discretion for three reasons: 1. The first plaintiff has not been kept out of its money, since the loans were made with no term as to interest and there was no suggestion that the moneys were to be recalled on any date. 2. It is not clear that the first plaintiff would have had the benefit of the funds advanced, since if they had been repaid, they would simply have reduced the balance of an inter-entity debt which did not attract interest. 3. The plaintiffs are guilty of delay, which resulted in the hearing occurring over four and a half years after commencement of the proceedings. 1. I do not consider the first defendant can raise these arguments now. As the Court of Appeal emphasised in Mendonca v Tonna (No 3) [2020] NSWCA 332 at [7], r 36.16 UCPR "is not to be exercised … for raising new arguments that could have been but were not made during the hearing" (Bell P, Meagher and Payne JJA). 2. However, even if it were appropriate to consider these new arguments, they do not, as submitted by the plaintiffs, displace the prima facie position in favour of an award of pre-judgment interest. 3. In respect of the first defendant's first point, the finding was that the loans were repayable on demand and nothing more. Therefore, while there was no agreed contractual interest rate, it cannot be said the loans were made with no intention to call for repayment. 4. In respect of the first defendant's second point, the plaintiffs rightly point out that they have succeeded on their case that the first defendant was liable to repay $1,250,000 to the first plaintiff. No finding was made concerning the use to which the first plaintiff would have put that money, had it been called on and received at an earlier date. 5. In respect of the third point, the first defendant seeks to rely on affidavit evidence which was filed and served in relation to an earlier notice of motion for leave to amend. As the plaintiffs note, this material was not in evidence at trial and therefore ought not be considered now. Orders 1. For these reasons, I am satisfied that the principal judgment should be varied pursuant to r 36.16(1) UCPR, to award pre-judgment interest from the date the proceedings were commenced. 2. Because the first defendant resisted the variation application, the plaintiffs incurred costs, for which she ought be responsible. 3. The appropriate orders are: 1. Principal judgment (Lorebray Pty Ltd v Liddy (No 2) [2024] NSWSC 1020) varied pursuant to r 36.16(1) Uniform Civil Procedure Rules 2005 (NSW) to include an order that the first defendant pay the first plaintiff interest pursuant to s 100 Civil Procedure Act 2005 (NSW) on the sums of $250,000 and $1,000,000 from 16 December 2019. 2. First defendant to pay the plaintiffs' costs of the notice of motion. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 08 October 2024