Strikis v Liepins [1999] NSWSC 279

New South Wales Supreme Court CITATION : Strikis v Liepins [1999] NSWSC 279 CURRENT JURISDICTION : Common Law FILE NUMBER(S) : 10451/99 HEARING DATE(S) : 29 March 1999 JUDGMENT DATE : 1 April 1999

PARTIES : Mikelis Strikis (Appellant) Juris Liepins as the executor of the Estate of Anite Elvira Prieditis (Respondent) JUDGMENT OF : Studdert J

LOWER COURT JURISDICTION : Local Court LOWER COURT FILE NUMBER(S) : No 2420 of 1996 LOWER COURT JUDICIAL OFFICER : Mr L.W. Gould

COUNSEL : B. Guest (Appellant) K. Morrissey (Respondent) SOLICITORS : Mikelis Strikis (Appellant) No appearance filed CATCHWORDS : Appeal by stated case; magistrate awards interest; whether such award involved error of law; Local Courts (Civil Claims) Act, 1970. ACTS CITED : Wills, Probate and Administration Act, 1898 Local Courts (Civil Claims) Act, 1970 CASES CITED : House v The King (1936) 55 CLR 499 DECISION : See para 23

- 5 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

STUDDERT J

Thursday 1 April 1999

10451/99 MIKELIS STRIKIS v JURIS LIEPINS - AS THE EXECUTOR OF THE ESTATE OF ANITA ELVIRA PRIEDITIS

JUDGMENT 1 HIS HONOUR: This is an appeal by way of stated case from a decision of the Local Court. 2 Mikelis Strikis, to whom I shall refer as "the appellant", was the defendant in proceedings in the Local Court. Those proceedings were instituted by Juris Liepins, to whom I shall refer as "the respondent". The respondent succeeded in the court below, judgment being entered in his favour for $11,500. The learned magistrate awarded interest from 28 February 1995 in an amount to be assessed by the registrar, and he also ordered the appellant to pay the respondent's costs. The challenge on the stated case is limited to the award of interest. 3 It is contended by the appellant that the magistrate's decision to award interest involved error of law. 4 I draw on the findings of the magistrate as expressed in the stated case for the following outline of facts. 5 The appellant is a solicitor who was practising alone when Anita Prieditis (the deceased) deposited $11,500 with him on 17 June 1991. The magistrate found that the appellant received the money in trust pending further instructions, which were not forthcoming during the lifetime of the deceased. 6 The deceased died on 18 July 1994 and probate in her estate was granted to the respondent on 20 December 1994. On 28 February 1995 the respondent, who like the appellant is a solicitor, wrote to the appellant purporting to enclose a copy of probate granted, and requesting within seven days a cheque for the amount held on behalf of the deceased. It was not however until on or shortly after 21 October 1996 that the respondent provided the appellant with a complete copy of the grant of probate in respect of the estate of the deceased. 7 The inventory forming part of the grant of probate, as identified in the stated case, described the relevant deposit as follows: "Money deposited with Strikis and Trayer, Solicitors, Level 8, Market Street, Sydney: $11.500.00" 8 The appellant's contention before the magistrate, unsuccessfully advanced, was that having regard to the above description in the inventory, which remained unaltered to the date of the decision of the Local Court, the appellant would not have obtained an indemnity if he paid over the sum of $11,500. As I understand the submission, this was because money had not been deposited with the partnership of Strikis and Trayer because that firm had not existed as at 17 June 1991. 9 The magistrate rejected that submission, as paragraph 21 of the stated case makes plain, and he described it as "a pedantic nonsense". 10 I observed earlier that the stated case limits the appeal to the award of interest. There is no challenge to the judgment for the principal sum, although Mr Guest submitted that absent an appropriate description in the inventory the principal was not strictly recoverable. 11 Mr Guest relied upon the provisions of s 81A, s 81B and s 91 of the Wills, Probate and Administration Act, 1898. Section 81A requires the applicant for a grant of probate to disclose to the court the assets and liabilities of the deceased. Section 81B concerns the disposition of the property of the deceased: "(1) Nothing in this Part enables an executor, administrator or trustee of the estate of a person who dies on or after 31st December, 1981, to complete the disposition of, and such an executor, administrator or trustee shall not complete the disposition of, any property of the deceased vested in the deceased which has not been disclosed to the Court pursuant to section 81A(1) or (2)…" 12 Section 91 on which Mr Guest's submission focussed in particular provides: "(1) All persons making or permitting to be made any payment or transfer, bona fide, upon any probate or administration or order granted in respect of the estate of any deceased person under the authority of this Part shall be indemnified and protected in so doing, notwithstanding any defect or circumstance whatsoever affecting the validity of such probate or administration or order not then known to such persons. (2) In respect of the estate of a person who dies on or after 31st December, 1981 the indemnity and protection conferred by subsection (1) shall apply only in relation to property of the estate of the deceased which is listed in a document issued by the Court in relation to the probate, administration or order." 13 The magistrate plainly rejected the submission expressed in reliance upon s 91. He considered the description in the inventory would not have prevented the indemnity and protection contemplated by that section. I am not persuaded that the decision of the learned magistrate to that effect involved error of law, and no appeal lies to this Court in respect of factual error. 14 Mr Guest submitted however that in any event the discretion to award interest miscarried. 15 The power of the Local Court to award interest is conferred by s 39A of the Local Courts (Civil Claims) Act, 1970. That section provides in sub-s (1) as follows: "(1) In any proceedings for the recovery of any money (including any debt, demand or damages or the value of any goods), the court may order that there shall be included, in the amount for which judgment is given, interest, at such rate as it thinks fit on the whole or any part of that amount 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." 16 The decision to award interest, being discretionary, can only be disturbed by this Court in well settled circumstances. In the much cited passage from the joint judgment of Dixon , Evatt and McTiernan JJ in House v The King (1936) 55 CLR 499 at 504-505, their Honours said: "The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellant court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred." 17 Interest is ordinarily awarded in favour of a successful plaintiff to compensate the plaintiff for having been deprived of the use of money to which the court has found the plaintiff to have been entitled. 18 Here however Mr Guest has submitted that given the unsatisfactory description in the inventory interest should not have been awarded at all. In my opinion the magistrate's rejection of that submission involved no appealable error. 19 Mr Guest further submitted that even if it was appropriate to award interest it should only have been awarded at the earliest from 21 May 1997 when the respondent first gave notice that interest would be claimed. 20 When notice of the claim for interest was given, the appellant was notified that the claim was being made from 28 February 1995, which was the date of the letter requesting payment of the principal sum. In my opinion it was open to the magistrate to award interest from the date he fixed and no error in the exercise of discretion has been established. 21 The questions alternatively posed in paragraph 24 of the stated case are to be answered in the negative. 22 The amount at issue by way of interest is $3600, so the costs of the proceedings in this Court may well be disproportionate to the amount involved. Nevertheless, the respondent did not bring the case to this Court and he has succeeded here. In these circumstances it seems to me justice requires that he should recover appropriate costs. Formal decision and order 23 1. The questions alternatively posed in paragraph 24 of the stated case are answered in the negative. 2. I order the appellant to pay the respondent's costs of the proceedings in this Court. **********