Peter Vitek & Anor v Estate Homes Pty Ltd & Ors [2013] NSWSC 1867

Supreme Court New South Wales

Medium Neutral Citation: Peter Vitek & Anor v Estate Homes Pty Ltd & Ors [2013] NSWSC 1867 Hearing dates: 29 November 2013 Decision date: 29 November 2013 Jurisdiction: Equity Division Before: Rein J Decision: Orders the post judgment rate be used for calculating interest owing on the judgment sum. Catchwords: INTEREST - whether the post judgment rate should be used when calculating interest owing on the judgment sum Legislation Cited: Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Peter Vitek & Anor v Estate Homes Pty Ltd & Ors [2013] NSWSC 1764 Vitek & Anor v Taheri & Ors [2013] NSWSC 589 Category: Principal judgment Parties: Peter Vitek (first plaintiff) Shoshanna Vitek (second plaintiff) Veeda Taheri (third defendant) Representation: Counsel: Mr B. Zipser (first and second plaintiff) Mr Sneddon (third defendant) Solicitors: Farrar Lawyers (first and second plaintiff) McLaughlin & Riordan (third defendant) File Number(s): 2005/258339

EX TEMPORE Judgment 1REIN J: In this matter I gave reasons for judgment last week (see Peter Vitek & Anor v Estate Homes Pty Ltd & Ors [2013] NSWSC 1764) and stood the matter over to today for argument and consideration of several matters including the precise amount of interest which should be paid on the $881K for which Estate Homes was found liable in 2010 following a decision of Justice Barrett. 2Mr Zipser, junior counsel for the plaintiff, seeks a calculation of interest based upon the post judgment interest rate found in Uniform Civil Procedure Rules 2005 (NSW) 36.7 (i.e. Reserve Bank rate plus 6%) even though that judgment is to now be entered against Mrs Taheri. Section 100(1) of the Civil Procedure Act 2005 (NSW) provides: 100 Interest up to judgment (cf Act No 52 1970, section 94; Act No 9 1973, section 83A; Act No 11 1970, section 39A) (1) In proceedings for the recovery of money (including any debt or damages or the value of any goods), the court may include interest in the amount for which judgment is given, the interest to be calculated at such rate as the court thinks fit: (a) on the whole or any part of the money, and for the whole or any part of the period from the time the cause of action arose until the time the judgment takes effect. ... 3The dispute between the parties is therefore over whether or not the court should exercise its discretion to utilise the interest rates set out for post judgment interest or only interest up to judgment at the rates set out in the Practice Note SC Gen 16 (Reserve Bank rate plus 4%) which is the approach put forward by Mr Sneddon. 4Mr Sneddon emphasises that it is only today that judgment will crystallise against Mrs Taheri because it is today that judgment will be entered against her, and there is no reason why the court should prefer the higher rate rather than the lower rate indicated by Practice Note SC Gen 16. 5Mr Zipser's response to that is three-fold. Firstly he points out that the approach which he contends for is consistent with what I have said in [66] of my judgment which is as follows: The plaintiffs claim interest at the contractual sale of 10%. In my view the applicable rate is the court rate accruing on the amount for which Estate Homes was held liable. That is the debt which Mrs Taheri (and Mr Taheri) guaranteed and which crystallised when judgment was entered against Estate Homes. 6Secondly, Mr Zipser refers to clause 51 of the 2003 contract by which Mrs Taheri guaranteed to the plaintiff the liability of Estate Homes to the plaintiffs. Thirdly, he contends that in the unusual circumstances of this case it would be quite unfair for Mrs Taheri to have the benefit of a lower rate for 3 years since the judgment was entered against Estate Homes and Mr Taheri. He also refers to the fact that it has been found by Bergin CJ in Eq in Vitek & Anor v Taheri & Ors [2013] NSWSC 589 that Mrs Taheri's departure from the case in 2010 was arrived at as a result of her fraudulent misrepresentations to the plaintiffs. 7Mr Sneddon made reference to the fact that one of the issues which fell for determination, and with which I have dealt in the reasons for judgment, was a divergence of view expressed by various judges of this division about powers of attorney: see [17] and [34]. I do not see this as relevant to the interest issue but in any event, I rejected Mrs Taheri's defence based upon both the approach favoured by White J and that favoured by Hammerschlag J (see [31] and[34]). 8It seems to me that this is a case in which the discretion ought to be exercised on the basis that Mrs Taheri guaranteed the obligations of Estate Homes and the liability of Estate Homes was determined in 2010 by Barrett J. Whilst it is true that the liability of Mrs Taheri was established only this month her liability related to the liability of the debtor Estate Homes determined in 2010 and that liability to the Viteks has not been discharged. In my view the higher rate is appropriate in the circumstances. 9If I had taken a different view on the first point I would have regard to the fact that, as Mr Zipser pointed out, Mrs Taheri has had the advantage of not having a judgment entered against her in 2010 by reason of her fraudulent misrepresentations and that would be a separate reason to adopt the higher rate of interest imposed by the post judgment rate. 10Accordingly, it is appropriate for the post judgment rate to be used. The amount for which judgment should be entered is the amount of $1,191,518.90 and which includes $310,436.97 of interest calculated from the date of 14 May 2010 until today.