Supreme Court New South Wales

• Medium Neutral Citation: Macquarie Bank Limited v Meinhardt (NSW) Pty Limited [2011] NSWSC 15
• Hearing dates: 17/09/10, 20/09/10, 21/09/10, 23/09/10
• Decision date: 03 February 2011
• Jurisdiction: Equity Division - Commercial List
• Before: Einstein J

Decision

Interest to be awarded to the plaintiff

• Catchwords: Power to award interest
• Legislation Cited: Civil Procedure Act 2005; Judiciary Act 1903; Jurisdiction of Courts (Cross-Vesting) Act (Cth) 1987; Supreme Court Act 1970; Trade Practices Act 1974
• Cases Cited: Australian National Airlines Commission v The Commonwealth (1975) 49 ALJR 338; Baulderstone Hornibrook v Gordian Runoff [2008] NSWCA 243; Pheeney v Doolan [1977] 1 NSWLR 4; Slattery v Beare [2001] SADC 44; Truss v Brazier (1990) 96 ALR 767; Yolarno Pty Ltd v Transglobal Capital Pty Ltd (No. 4) [2003] NSWSC 1206
• Category: Procedural and other rulings
• Parties: Macquarie Bank Pty Limited (Plaintiff); Meinhardt (NSW) Pty Limited (Defendant)
• Representation: Counsel: Mr M Elliott (Plaintiff); Mr I Roberts (Defendant); Solicitors: Minter Ellison (Plaintiff); DLA Phillips Fox (Defendant)
• File Number(s): 2010/00059668

Judgment

The state of these proceedings

1 The remaining matters in issue concern MBL seeking pre-judgment interest on the damages awarded in its favour.

2 Both parties have reduced their submissions to writing.

3 In my view the plaintiffs submissions of substance and they are adopted in what follows.

4 The recognised purpose of an award of interest is to ensure a plaintiff is properly compensated for the practical loss it has suffered. Thus, an award is usually made.

Power to award interest

5 Meinhardt has indicated that it proposes to oppose an award of interest on the basis that this Court has no power to award interest on damages where the damages are awarded under s.82 of the Trade Practices Act .

6 MBL disputes Meinhardt's position, and contends that the Court has power to award damages.

7 The correct finding is that s.86 of the Trade Practices Act gives a State Court power to award interest on an award of damages in proceedings for contravention of s.52 of the Trade Practices Act where that State Court has power under a law of the State to award interest on damages. In New South Wales s.100 of the Civil Procedure Act gives the Supreme Court power to award interest on damages.

Section 86 of the Trade Practices Act

8 Section 86(2) of the Trade Practices Act confers on this Court jurisdiction with respect to a matter arising under Division 1 Part V of the Trade Practices Act . This is such a case.

9 Section 86(3) makes it plain that the power invested in the Court in respect of such a matter extends to granting remedies that the court is able to grant under the law of the State.

10 That sub-section, by confirming that it is not the intention of s86(2) to confer on an inferior court of a State a power to grant remedies other than those of a kind the court is able to grant under the law of that State, confirms that s86(2) does confer, on both superior and inferior courts of a State, the power to grant remedies of the kind they are able to grant under the law of the State. This includes the power to award interest.

11 In Truss v Brazier (1990) 96 ALR 767, Cooper J at 795 found that:

The legislature, in enacting s 86 of the Trade Practices Act , intended that State courts ought to exercise concurrent jurisdiction with the Federal Court of Australia and give such relief by way of remedy as was available in that court, provided the remedy was of a kind the State court could grant under State law"

and that the section...

"operates to empower a State court to grant discretionary interest on an award of damages under s 82 of the Trade Practices Act if the court has a power of that kind under State law. The amendment [i.e. the amendment to the TPA introducing s.86] provides an additional remedy and the power to grant the remedy is vested in a State court while exercising federal jurisdiction under the Trade Practices Act .

12 Justice Shepherdson, with whom Kneipp J agreed, gave a judgment to like effect. Justice Shepherdson also identified s4 of the Jurisdiction of Courts (Cross-Vesting) Act (Cth) as a separate head of power to award interest.

13 The decision in Truss v Brazier has not been doubted or overturned. Indeed it has been followed: Slattery v Beare [2001] SADC 44.

14 The decision in Truss v Brazier makes perfect sense. It would be an absurd result if this Court was vested with power to hear and determine a claim for damages for breach of s.52 of the Trade Practices Act , yet did not have power to award interest on those damages in the usual way. The legislators can never have intended such an absurd result. This is particularly so having regard to the establishment of the cross-vesting regime, under which cases involving claims for damages for breach of s.52 are regularly transferred from the Federal Court to the Supreme Court, and vice versa.

Section 100 of the Civil Procedure Act

15 There is no question that a law of the State of New South Wales has vested power in the Supreme Court to award interest on damages.

16 Section 100 of the Civil Procedure Act , by its express terms, confers power on this Court to include interest in the amount for which judgment is given "in proceedings for the recovery of money (including any debt or damages or the value of goods) ".

Conclusion

17 It follows from the above that this Court has power to award pre-judgment interest on the damages award in this case.

The erroneous note in Ritchie's

18 There is a note in Ritchie's service at [s100.90] which states that interest cannot be awarded under s.100 in relation to claims for damages under s.82 of the Trade Practices Act .

19 The case cited in that note is Yolarno Pty Ltd v Transglobal Capital Pty Ltd (No. 4) [2003] NSWSC 1206, a decision of Gzell J.

20 In Yolarno , Gzell J dealt briefly with the question of the Court's power to award interest under s.94 of the Supreme Court Act (since repealed).

21 His Honour there held that the case of Australian National Airlines Commission v The Commonwealth (1975) 49 ALJR 338 was authority for the proposition that s.94 did not empower the court to award pre-judgment interest on s.82 damages award, and that he was constrained to follow it.

22 Meinhardt's position is that this Court, in considering MBL's claim for interest under s.100 of the Civil Procedure Act , should follow the approach adopted by Gzell J in Yolarno when his Honour considered s.94 of the Supreme Court Act .

23 In my view and with due respect to what may have been a different express by Gzell J in Yolarno in giving a short ex tempore judgment , that finding is one which I cannot accept.

24 It is clear from a reading of Yolarno that the finding of Gzell J as to the operation of s.94 of the Supreme Court Act was based on his Honour's understanding that Australian National Airlines had decided that the section did not confer power on the Supreme Court to award interest on a damages award made under the Trade Practices Act , and he was bound to follow it.

25 A reading of Australian National Airlines demonstrates, however, that this case was not authority for that proposition.

26 It is not clear from the ex tempore reasons in Yolarno whether, at the time of delivering his ex tempore judgment, Gzell J had before him and read the Australian National Airlines case, or whether instead his Honour was working off a (mistaken) note in a practice service. It is unlikely that his Honour did have the case before him at the time of his judgment.

27 I accept that there is, in fact, no finding in Australian National Airlines that s.94 of the Supreme Court Act did not empower the Supreme Court of New South Wales to award interest on a damages award made by the Supreme Court.

28 Australian National Airlines was not concerned with the construction and operation of s.94 of the Supreme Court Act , or with the operation of that section in the Supreme Court. It was concerned with something altogether different.

29 Australian National Airlines concerned whether s.79 of the Judiciary Act (Cth) operated so as to enable the High Court to use s.94 of the Supreme Court Act to make an award of interest in a case that was before the High Court exercising its original jurisdiction . Mason J (sitting alone) found that s.79 of the Judiciary Act could not operate in that way.

30 The plaintiff has helpfully summarised the essential findings in Australian National Airlines by marking up the conclusions.

31 The conclusion marked "1" was that the Supreme Court Act conferred power on the Supreme Court to order interest on damages in judgments entered by that court tin proceedings before it. This is not controversial.

32 The conclusion marked "2" was that s.79 of the Judiciary Act did not pick up and apply in the High Court a provision which empowered the Supreme Court to make orders and enter judgments in proceedings in that court. This finding concerned the operation of s.79 of the Judiciary Act . This issue does not arise here.

33 The conclusion marked "3" was that even if s.79 of the Judiciary Act could operate to pick up and apply s.94 of the Supreme Court Act to proceedings before the High Court exercising its original jurisdiction, it would not assist the applicant in the particular case before the High Court because the proceeding in the High Court was commenced before s.94 of the Supreme Court Act commenced operation. This issue does not arise here.

34 The conclusion marked "4" was that even if s.79 of the Judiciary Act could operate and pick up and apply s.94 of the Supreme Court Act to proceedings before the High Court exercising its original jurisdiction, it would be inappropriate for the High Court to exercise that power when the High Court had its own code of procedure prescribed by the statutes and rules of the High Court. This issue does not arise here.

35 The conclusion marked "5" was that even if s.79 of the Judiciary Act could operate and pick up and apply s.94 of the Supreme Court Act to proceedings before the High Court exercising its original jurisdiction, the court on the particular facts of that case would not have exercised the discretionary power to award interest in circumstances where the damages claim was made by way of late amendment. This issue does not arise here.

36 The conclusion marked "6" was concerned with the power of the High Court to make an award of interest against the Commonwealth , being the first of a number of defendants. This issue does not arise here.

37 As is obvious from this recitation of the findings in Australian National Airlines , they were concerned with issues which do not arise in this case, and none of the findings was that s.94 of the Supreme Court Act did not confer power on the Supreme Court to award interest on a damages award made by it under s.82 of the Trade Practices Act .

38 That being so, Gzell J was in error in proceeding on the basis that Australian National Airlines was authority for the proposition that s.94 of the Supreme Court Act did not confer power on this Court to award interest on s.82 damages.

39 Further and in any event, the decision of Gzell J is erroneous because:

(1) Australian National Airlines was decided prior to the introduction of s.86 into the Trade Practices Act in 1987; and

(2) Gzell J does not have appear to have been taken to, and thus gave no consideration to, the operation of s.86 of the Trade Practices Act or the court of appeal decision in Truss v Brazier .

40 As such, even if Australian National Airlines had decided what his Honour thought it had decided, it was not binding on him having regard to the legislative changes that had been made in the intervening period, and the authorities concerning the effect of those changes.

41 For the above reasons in my view the basis upon which Gzell J proceeded in Yolarno was incorrect .

42 That being so, Yolarno cannot be relied upon by the defendant for a finding that this Court does not have power to award interest on a damages award made under the Trade Practices Act .

Rate of interest

43 The usual order made for interest is that based on the application of the rates of interest set out in Schedule 5 to the UCPR.

44 There is no reason to depart from that usual approach here.

45 In the result interest is to be awarded for the period up to judgment. The plaintiff is directed to update the calculations bearing in mind the time in which the parties and the court had taken to reach a result.

Interest as damages

46 Even if the above analysis be incorrect, such that this court did not have power to award pre-judgment interest under s.100 of the Civil Procedure Act , MBL seeks interest as damages.

47 Strictly speaking, this has not been separately particularised as a head of loss. However:

i. the Commercial List is not a court of strict pleadings;

ii. it has always been plain from the Summons that MBL was claiming interest (albeit reference was only made to s.100);

iii. Meinhardt never notified MBL that it proposed to contend that the Court did not have power to award interest under s.100. If it be incumbent upon MBL to claim interest under s100 as it did (see Pheeney v Doolan [1977] 1 NSWLR 4), it was incumbent upon Meinhardt to notify MBL that it proposed to take the lack of power point. It never did, thus failing to act appropriately by litigating with its cards on the table (see Baulderstone Hornibrook v Gordian Runoff [2008] NSWCA 243).

48 In these circumstances had it been necessary I accept that it was open to MBL to seek interest as damages at this stage.

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Decision last updated: 07 February 2011