Supreme Court New South Wales Medium Neutral Citation: Noble Solutions Pty Limited v Young [2014] NSWSC 1419 Hearing dates: 12 September 2014 Decision date: 12 September 2014 Before: White J Decision: Refer to paras [14] and [16] of judgment. Catchwords: INTEREST - recoverability of interest - where judgment in respect of loan agreement entered in plaintiff's favour and interest awarded at "usurious" contractual rate - whether plaintiff entitled to post-judgment interest at contractual rate - whether plaintiff entitled to post-judgment interest pursuant to Civil Procedure Act 2005 (NSW) s 101 - held plaintiff entitled to interest at statutory rate and not contractual rate; COSTS - no issue of principle - no order as to costs Legislation Cited: Civil Procedure Act 2005 (NSW) Cases Cited: Noble Solutions Pty Ltd v Young [2013] NSWSC 1371 Category: Principal judgment Parties: Noble Solutions Pty Limited (Plaintiff) Brian Andrew Young (Defendant) Representation: Counsel: N Craven (sol'r) - Plaintiff Solicitors: Bransgroves Lawyers - Plaintiff File Number(s): 2013/84133 Judgment 1HIS HONOUR: On 2 April 2012 the plaintiff agreed to lend the first and second defendants $17,930 on terms that McDougall J aptly described as "usurious" (Noble Solutions Pty Ltd v Young [2013] NSWSC 1371). The defendants failed to repay the loan by the due date and have not paid interest. The plaintiff claimed interest pursuant to the loan agreement at the default rate of 2.5 per cent per week. Interest is capitalised weekly. By a further amended notice of motion filed on 9 August 2013 the plaintiff moved the Court for orders including that, "1. Pursuant to rule 16.3 of Uniform Civil Procedure Rules the plaintiff be awarded judgment against the second defendant", and that, "2. Pursuant to rule 13.1 of the Uniform Civil Procedure Rules the plaintiff be awarded judgment against the first defendant." Orders were also sought for possession and for judicial sale of a property the subject of a mortgage given by the defendants to secure the loan. 2On 6 September 2013 McDougall J found that the plaintiff was entitled to the relief sought subject to some adjustment in respect of costs which had been unnecessarily incurred (Noble Solutions Pty Ltd v Young [2013] NSWSC 1371). The first defendant had filed a defence but did not appear to oppose the plaintiff's claim for summary judgment. The second defendant did not appear. 3His Honour said that: "22 I have some considerable difficulty in seeing why a Court of Equity - as it used to be called, a court of conscience - should lend its aid to enforcing an usurious mortgage. However, with some reluctance, I conclude that the evidence makes good the proposition that the plaintiff and the first and second defendants have reached a short term agreement, enforceable at law, under which the defendants were not able to meet their commitment. In those circumstances, and as I have said with considerable reluctance, I do not think that I should enquire further into the conscionability of the interest rate." 4On 12 September 2013 judgment was given and orders were made on the plaintiff's notice of motion. Relevantly, for present purposes, orders were made as follows: "1. Pursuant to rule 16.3 of Uniform Civil Procedure Rules the plaintiff be awarded default judgment against the second defendant; 2. Pursuant to rule 13.1 of Uniform Civil Procedure Rules the plaintiff be awarded summary judgment against the first defendant." 5The judgment to which the plaintiff was entitled included an amount for costs of enforcing the mortgage. The amount of the debt, including costs allowed by McDougall J, as at 12 September 2013 was $118,415.68. 6The property, the subject of the mortgage, has been sold pursuant to the orders for judicial sale that were also made on 12 September 2013. After discharge of the registered mortgage and after deduction of a sum of $26,460.62 in respect of the expenses of sale, including the fees of the trustees appointed for sale, an amount of $153,238.72 was paid into Court. 7By an amended notice of motion filed on 10 September 2014 the plaintiff now seeks a judgment against the first and second defendants in a monetary sum. The judgments, the subject of the orders of 12 September 2013, did not specify an amount of the judgment debt. Judgment is now sought against both defendants in the amount of $430,324.53. The additional amount of over $300,000 represents additional interest to which the plaintiff claims to be entitled at the usurious rates provided for in the loan agreement. All this, in respect of an advance that put the defendants in pocket to the tune of about $15,000. 8The plaintiff also seeks an order that the amount of $153,238.72 held in Court be paid to it in part satisfaction of the judgment. 9McDougall J has determined, in circumstances where there was no appearance for the defendants, that the plaintiff was entitled to judgment at the contractual rates. His Honour "awarded" judgment on 12 September 2013. Although no judgment sum was stipulated when the orders of 12 September 2013 were made, the effect of his Honour's orders was that the plaintiff was entitled to judgment and it is clear from his Honour's reasons, that the plaintiff was then entitled to a judgment in the amount that was then owing under the contractual terms as determined in accordance with his Honour's reasons of 6 September 2013. 10That judgment took effect on the day on which it was made even though it omitted to specify the amount of the judgment debt. The plaintiff's cause of action merged in the judgment. Thereafter the plaintiff was entitled, subject to any order that might be made to the contrary, to interest on the judgment debt pursuant to s 101 of the Civil Procedure Act 2005 (NSW) if the judgment was not satisfied within 28 days. 11I think the judgment ought to have specified a monetary sum. But either pursuant to the slip rule (r 36.16) or pursuant to an implied liberty to specify an amount of the judgment "awarded" on 12 September 2013, the sum should now be fixed that was the amount for which judgment should then have been entered. The plaintiff is not entitled to further interest from 12 September 2013 at the contractual rates. 12I order that judgment be given for the plaintiff against the first defendant and the second defendant in the sum of $118,415.68 and that this judgment take effect as from 12 September 2013. 13As the Court has found that the plaintiff was entitled to judgment in that amount, I do not think that there is any sufficient reason to make a contrary order under s 101 of the Civil Procedure Act that would preclude interest in accordance with that section accruing from the date which was twenty-eight days after 12 September 2013. Distaste for the plaintiff's business practices is not a sufficient reason to deprive the plaintiff of statutory interest in respect of a judgment that was unpaid, to which it has been found to be entitled. No additional order is required for that interest to be payable. The additional interest as at today amounts to $9,238.05. Hence, as at today, the plaintiff is entitled to be paid from the moneys in court an amount of $127,653.73. It will be entitled to additional interest of $27.58 per day until payment out. 14I order that $127,653.73 plus $27.58 per day from 13 September 2014 to the date of payment be paid to the plaintiff out of the moneys held in court. 15The remaining question concerns costs. The plaintiff seeks an order that the defendants pay its costs incurred since the date of distribution of sale proceeds up to today, including the costs of the amended notice of motion. Because the plaintiff sought a judgment for an amount to which I consider it is not entitled, and because I do not think it is entitled to the whole of the moneys in Court, I do not consider that any order should be made in respect of the costs of the amended notice of motion. 16I order that there be no order as to costs of the plaintiff's amended notice of motion with the intent that the plaintiff bear its own costs of that 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: 16 October 2014