Supreme Court New South Wales Medium Neutral Citation: Gladys Hargraves v Susan Eveston (No 2­) [2018] NSWSC 1922 Hearing dates: 03 December 2018 Decision date: 03 December 2018 Jurisdiction: Common Law Before: Hamill J Decision: (1) Interest on the judgment debt entered on 8 May 2018 in the sum of $2,420,761.05 will be at the rate of 10%, in accordance with the provision of s 101(2) Civil Procedure Act 2005. (2) Costs to be paid by the defendant. Catchwords: CIVIL LAW – contract dispute – where loans formalised by deeds – interest on judgment debt – appropriate interest rate after judgment – where deeds specified interest rate – where parties co-operate for the first and only time – whether failure to make submission at hearing disentitled plaintiff from subsequently seeking interest in accordance with contract – presumptuous and precipitous Legislation Cited: Civil Procedure Act 2005, s 101 Cases Cited: MIS Funding No 1 Pty Limited v Beefeater Sales International Pty Limited [2015] NSWSC 1109 Category: Costs Parties: Gladys Hargraves (Plaintiff) Susan Eveston (Defendant) Representation: Counsel: T Rogers (Plaintiff) I Chatterjee (Defendant) Solicitors: Peter Prior & Co (Plaintiff) Coleman Greig Lawyers (Defendant) File Number(s): 2017/00165097 Publication restriction: No ex tempore Judgment (revised) 1. His Honour: On 24 April 2018 I made the following orders: 1. Judgment for the plaintiff in the sum of $1,681,516 plus interest in accordance with the deeds of loan agreement. 2. The defendant is to pay the plaintiff's costs. 3. Direct the parties to provide the Court with the final judgment figure on or before 8 May 2018 to facilitate judgment being entered in a certain sum on that date. 1. The reference in order (1) to "interest in accordance with the deeds of loan agreement" plainly related to interest up until the date of judgment. There had been no argument made in the course of the hearing as to the interest rate that might apply after judgment was entered. 2. In accordance with the direction in order (3), the parties, seemingly for the first and only time, cooperated to agree upon a figure. However, and more typically of the conduct of these proceedings, they could not agree on the appropriate order with respect to post-judgment interest. 3. There is correspondence between the parties in exhibits 5 and 6 which demonstrates or shows the nature of their disagreement. 4. Accordingly, on 8 May 2018 I made the following orders: 1. Judgment in the sum of $2,420,761.05 plus costs. 2. The matter is to be listed on a date to be fixed in regard to post-judgment interest. 1. For reasons beyond the control of the parties, the matter could not be listed until today, that is 3 December 2018. 2. Ordinarily, interest on a judgment debt is to be paid in accordance with the rate provided for in s 101 of the Civil Procedure Act 2005, which provides: 101 Interest after judgment (1) Unless the court orders otherwise, interest is payable on so much of the amount of a judgment (exclusive of any order for costs) as is from time to time unpaid. (2) Interest under subsection (1) is to be calculated, at the prescribed rate or at such other rate as the court may order, as from: (a) the date on which the judgment takes effect, or (b) such later date as the court may order. 1. However, in the present case, the deeds of loan upon which the original claim was based made specific reference to "post-judgment interest". Clause 3 of each deed provided: "The borrower will pay interest on the Principal Sum or on so much thereof as for the time being shall remain unpaid, and upon any judgment or order in which this or the preceding covenant may become merged, at the interest rate specified at Item 7 and calculated on a daily basis until the Principal Sum shall be fully paid and satisfied." 1. The same deed provided for an interest rate of 10% per annum. 2. Since judgment was entered back in May, the parties agree that the defendant has not paid the judgment debt and, on the hearing of the application this morning, no explanation was provided for this. 3. Counsel for the defendant submitted, in essence, that I was being asked to vary the orders made on 8 May 2018. I am unable to accept that submission. Part of the orders made on 8 May 2018 specifically allowed for this argument to occur. 4. The issue gives rise to a classic exercise of discretion. On the one hand, generally, a successful litigant receives interest in accordance with the Act. However, s 101 specifically provides a discretion for interest to be paid at such other rate as the Court may order. As Ball J said in a slightly different context - and that is the context where the parties' agreement allowed for, or required, the defendant to pay costs on an indemnity basis rather than on the ordinary basis: [1] "Normally … the court would exercise its costs discretion consistently with the parties' contractual obligations." 1. The defendant also argued that the fact that the matter was not raised in the course of the hearing in February and April of 2018 militated against making an order in the exercise of discretion for a higher interest rate than that provided by s 101. 2. Again, I am unable to accept that submission, whilst I do accept that it is relevant to the exercise of the discretion. The reason is that the conduct of this litigation, as was set out frankly and plainly in the judgment delivered on 24 April 2018, was such that the plaintiff was being put to proof on the terms of the contract itself. It is hardly surprising in those circumstances that the legal representatives of the plaintiff did not address this residual question of post-judgment interest. In some respects, to have done so would have been presumptuous and precipitous. 3. I am satisfied in the exercise of the discretion that the defendant should be bound by the deeds of loan agreement which she entered and, thus, be required to pay interest at the rate of 10% per annum in relation to the judgment debt. 4. Accordingly, the orders I make are that: 1. Interest on the judgment debt entered on 8 May 2018 in the sum of $2,420,761.05 will be at the rate of 10%, in accordance with the provision of s 101(2). 2. The costs of today are to be paid by the defendant. ********** Endnote 1. MIS Funding No 1 Pty Limited v Beefeater Sales International Pty Limited [2015] NSWSC 1109 at [62]. 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: 14 December 2018