{"id":"penalty-interest-rates-act-1983","name":"Penalty Interest Rates Act 1983","slug":"penalty-interest-rates-act-1983","collection":"act","jurisdiction":"vic","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":173874,"registerId":"vic-penalty-interest-rates-act-1983-current","compilationNumber":null,"startDate":"2026-04-05","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Penalty Interest Rates Act 1983","content":"Version No. 014\n\n**Penalty Interest Rates Act 1983**\n\n**No. 9967 of 1983**\n\nVersion incorporating amendments as at  \n17 May 2012\n\n**table of provisions**\n\n*Section Page*\n\n1 Short title 1\n\n2 Penalty interest rate 1\n\n3 *Repealed* 2\n\n4 Interest on moneys etc. where no rate contracted 2\n\n5 Interest on debts or certain sums recovered 3\n\n6 Interest on actions for debt or damages 3\n\n7 Interest on solicitors' costs 3\n\n8 Interest on judgments 4\n\n9 Interest on judgments 4\n\n10 Interest on judgments 4\n\n11 Interest on purchase money in arrears 4\n\n12 Interest on purchase money in arrears 5\n\n13 Interest on judgments and orders 5\n\n14 Validation of certain orders for the payment of interest 5\n\n15 Re-opening of cases 6\n\n16 Reference to maximum rate deemed to be fixed rate 6\n\n17 Validity of certain calculations of penalty interest 7\n\nENDNOTES 8\n\n1. General Information 8\n\n2. Table of Amendments 9\n\n3. Explanatory Details 10\n\n**Version No.** **014**\n\n**Penalty Interest Rates Act 1983**\n\n**No. 9967 of 1983**\n\nVersion incorporating amendments as at  \n17 May 2012\n\nAn Act to amend the **Supreme Court Act 1958**, the **County Court Act 1958**, the **Property Law Act 1958**, the **Transfer of Land Act 1958** and the **Magistrates' Courts Act 1971** with respect to the Payment of Interest on certain unpaid Moneys, to make Provision for Rates of Interest payable under certain Instruments and for Purposes connected therewith.\n\n**BE IT ENACTED by the Queen's Most Excellent Majesty by and with the advice and consent of the Legislative Council and the Legislative Assembly of Victoria in this present Parliament assembled and by the authority of the same as follows (that is to say):**\n\n\t1 Short title\n\n(1) This Act may be cited as the **Penalty Interest Rates Act 1983**.\n\n(2) The **Supreme Court Act 1958** is in this Act referred to as the Principal Act.\n\n(3) This Act shall be deemed to have come into operation on 1 July 1983.\n\nS. 2 substituted by No. 58/1989 s. 3.\n\n\t2 Penalty interest rate\n\n(1) The penalty interest rate is the interest rate expressed as a percentage fixed by the Attorney-General from time to time by notice published in the Government Gazette.\n\n(2) The Attorney-General must determine the penalty interest rate to be fixed by—\n\n(a) obtaining from time to time a recommendation from the Treasurer as to an appropriate institutional rate of interest, which must be a rate—\n\n(i) which is charged for loans or paid for borrowings by a public or commercial institution; and\n\n(ii) which, in the opinion of the Treasurer, reflects prevailing commercial rates of interest; and\n\n(b) determining, after consultation with the Treasurer, whether the recommended institutional rate should be adjusted to include a penalty element, and, if so, the nature and size of the adjustment; and\n\n(c) adding or subtracting the adjustment (if any) to or from the institutional rate.\n\n(3) If there is any change to the percentage of the institutional rate, the Attorney-General may fix a new penalty interest rate to take account of the change and may do this without complying with subsection (2).\n\nS. 3  \nrepealed by No. 58/1989  \ns. 3.\n\n* * * * *\n\n\t4 Interest on moneys etc. where no rate contracted\n\ns. 4\n\nIn section 77 of the Principal Act for the words \"maximum rate approved by the Australian Loan Council at the time judgment is entered or an order made for long-term borrowing for new public securities issued by semi-government authorities\" there shall be substituted the expression \"rate for the time being fixed under section 2 of the **Penalty Interest Rates Act 1983**\".\n\n\t5 Interest on debts or certain sums recovered\n\ns. 5\n\nIn section 78(1) of the Principal Act for the words \"the maximum rate approved by the Australian Loan Council at the time the judgment is entered or the order made for long-term borrowing for new public securities issued by semi-government authorities\" there shall be substituted the expression \"the rate for the time being fixed under section 2 of the **Penalty Interest Rates Act 1983**\".\n\n\t6 Interest on actions for debt or damages\n\nIn section 79A(1) of the Principal Act for the words \"the maximum rate approved by the Australian Loan Council at the time the judgment is entered or the order made for long-term borrowing for new public securities issued by semi-government authorities\" there shall be substituted the expression \"the rate for the time being fixed under section 2 of the **Penalty Interest Rates Act 1983**\".\n\n\t7 Interest on solicitors' costs\n\nIn section 88 of the Principal Act for the words \"at the maximum rate then approved by the Australian Loan Council for long-term borrowing for new public securities issued by semi-government authorities\" there shall be substituted the expression \"at the rate for the time being fixed under section 2 of the **Penalty Interest Rates Act 1983**\".\n\n\t8 Interest on judgments\n\ns. 8\n\nIn section 161 of the Principal Act for the words \"maximum rate approved by the Australian Loan Council at the time the judgment is entered or the order made for long-term borrowing for new public securities issued by semi-government authorities\" there shall be substituted the expression \"rate for the time being fixed under section 2 of the **Penalty Interest Rates Act 1983**\".\n\n\t9 Interest on judgments\n\nIn section 73(4) of the **County Court Act 1958** for the words \"maximum rate approved by the Australian Loan Council at the time judgment is entered or the order made for long-term borrowing for new public securities issued by semi-government authorities\" there shall be substituted the expression \"rate for the time being fixed under section 2 of the **Penalty Interest Rates Act 1983**\".\n\n\t10 Interest on judgments\n\nIn section 86(4) of the **County Court Act 1958** for the words \"maximum rate approved by the Australian Loan Council at the time the judgment is entered for long-term borrowing for new public securities issued by semi-government authorities\" there shall be substituted the expression \"rate for the time being fixed under section 2 of the **Penalty Interest Rates Act 1983**\".\n\n\t11 Interest on purchase money in arrears\n\nIn the Third Schedule to the **Property Law Act 1958** in condition 4, for the words \"maximum rate approved by the Australian Loan Council at the time of the default for long-term borrowing for new public securities issued by semi-government authorities\" there shall be substituted the expression \"rate for the time being fixed under section 2 of the **Penalty Interest Rates Act 1983**\".\n\n\t12 Interest on purchase money in arrears\n\ns. 12\n\nIn the Seventh Schedule to the **Transfer of Land Act 1958** in condition 4, for the words \"maximum rate approved by the Australian Loan Council at the time of the default for long-term borrowing for new public securities issued by semi-government authorities\" there shall be substituted the expression \"rate for the time being fixed under section 2 of the **Penalty Interest Rates Act 1983**\".\n\n\t13 Interest on judgments and orders\n\nFor section 50(4) of the **Magistrates' Courts Act 1971** there shall be substituted the following subsection:\n\n\"(4) Every judgment debt shall carry interest at the rate for the time being fixed under section 2 of the **Penalty Interest Rates Act 1983** from the time the judgment is entered or order made and the amount of the interest shall be stated in the body of and may be levied under any warrant of distress or commitment issued for the enforcement of the judgment or order.\".\n\n\t14 Validation of certain orders for the payment of interest\n\nEvery order made under the provisions of any of the enactments referred to in the foregoing provisions of this Act on or after 1 July 1983 and before the day on which this Act is assented to for the payment of interest at a rate not exceeding the maximum rate last approved by the Australian Loan Council for long-term borrowing for new public securities issued by semi-government authorities shall be and be taken to be a valid order for the payment of interest notwithstanding the cessation by the Australian Loan Council of approval of a maximum rate of interest for long-term borrowing for new public securities issued by semi-government authorities.\n\n\t15 Re-opening of cases\n\ns. 15\n\nAny judgment creditor who is aggrieved at the refusal or failure of any Court to make an order for the payment of interest under the provisions of any of the enactments referred to in the foregoing provisions of this Act because of the cessation by the Australian Loan Council of the approval of a maximum rate of interest for long-term borrowing for new public securities issued by semi-government authorities may without any further or other authority than the provisions of this section at any time apply to the Court for the making of such an order and the Court on any such application may in accordance with the provisions of that enactment make an order for the payment of interest at a rate not exceeding the rate of 15⋅8 per centum per annum.\n\n\t16 Reference to maximum rate deemed to be fixed rate\n\nA reference in a contract, agreement, mortgage, lease or other instrument made or entered into before the date on which this Act receives the Royal Assent to the maximum rate approved by the Australian Loan Council for long-term borrowing for new public securities issued by semi-government authorities shall, unless the contrary intention appears, be deemed to be a reference to the rate for the time being fixed under section 2 of the **Penalty Interest Rates Act 1983**.\n\nS. 17 inserted by No. 34/2004 s. 8.\n\n\t17 Validity of certain calculations of penalty interest\n\ns. 17\n\nIf, before the commencement of the **Appeal Costs and Penalty Interest Rates Acts (Amendment) Act 2004**—\n\n(a) a notice published in the Government Gazette purported to fix the penalty interest rate commencing on a date preceding the date of publication of the notice; and\n\n(b) penalty interest at the rate purported to have been fixed has been calculated from the date referred to in the notice—\n\nthe calculation of interest from that date is not by that reason alone invalid.\n\n\n\nENDNOTES\n\nEndnotes\n\n1. General Information\n\n\nThe **Penalty Interest Rates Act 1983** was assented on 22 November 1983 and came into operation on 1 July 1983: section 1(3).\n\n1. Table of Amendments\n\n\nEndnotes\n\nThis Version incorporates amendments made to the **Penalty Interest Rates Act 1983** by Acts and subordinate instruments.\n\n–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––\n\n**Penalty Interest Rates (Amendment) Act 1989, No. 58/1989**\n\n| Assent Date: | 22.8.89 |\n| --- | --- |\n| Commencement Date: | 22.8.89 |\n| Current State: | All of Act in operation |\n\n\n**Appeal Costs and Penalty Interest Rates Acts (Amendment) Act 2004, No. 34/2004**\n\n| Assent Date: | 8.6.04 |\n| --- | --- |\n| Commencement Date: | S. 8 on 9.6.04: s. 2 |\n| Current State: | This information relates only to the provision/s amending the **Penalty Interest Rates Act 1983** |\n\n\n–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––\n\n1. Explanatory Details\n\n\nEndnotes\n\nNo entries at date of publication.","sortOrder":0}],"analysis":{"kimi_summary":{"_metrics":{"source":"grok-batch-everything"},"content_quality":"ok","complexity_score":4,"scope_assessment":{"changed":false,"description":"The legislation has not grown beyond its original purpose of replacing obsolete Australian Loan Council rate references with a modern, adjustable penalty interest rate in court judgments, debts, costs and certain property transactions. Subsequent amendments (1989 and 2004) refined the rate-setting mechanics and added validation for past calculations without altering the fundamental scope."},"complexity_factors":["Multiple substitution amendments across five separate Acts (Supreme Court Act 1958, County Court Act 1958, Property Law Act 1958, Transfer of Land Act 1958, Magistrates' Courts Act 1971)","Layered transitional and validation provisions (ss 14, 15, 17) that address historical cessation of Australian Loan Council rates","Three-step rate-setting formula in s 2(2) involving Treasurer recommendation, institutional rate, and discretionary penalty element","Deeming rules in s 16 that alter the meaning of references in pre-existing contracts and instruments"],"plain_english_summary":"**The Penalty Interest Rates Act 1983** creates a single, regularly updated interest rate (called the penalty interest rate) that Victorian courts and contracts must use when adding extra money for late payments.\n\nThe Attorney-General sets this rate after getting advice from the Treasurer on current commercial borrowing costs and then adding a penalty component. This rate replaces older, outdated formulas that once referred to a government body (the Australian Loan Council) that no longer sets such rates.\n\nIt applies to court judgments for debts or damages, solicitors' bills, certain property sales where purchase money is late, and interest on judgment debts. The Act also contains housekeeping rules that validate past court orders and protect calculations made using the rate even if the official notice was published slightly late.\n\nThis matters to anyone involved in a court case, a loan, a property purchase, or a legal dispute over unpaid money because it determines exactly how much extra a debtor must pay for every day of delay, creating consistency and predictability."},"issue_detection":{"absurdities":[],"contradictions":[]},"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":true,"description":"The Act changes the scope of how statutory interest rates are set and applied within the specified Victorian legislation. It replaces reliance on an external Australian Loan Council approval with a locally fixed statutory ‘penalty interest rate’ determined and published by the Attorney‑General (section 2) and applies that single rate across multiple court and property law provisions (sections 4–13). It also extends that new mechanism to pre‑existing contracts by deeming Loan Council references to mean the new rate (section 16) and validates and reopens certain historical orders and calculations (sections 14, 15, 17)."},"complexity_factors":["Multiple cross‑references and amendments across several principal Acts (Supreme Court Act, County Court Act, Property Law Act, Transfer of Land Act, Magistrates' Courts Act) (sections 4–13).","Discretionary rate‑setting process vested in executive officers: Attorney‑General fixes the rate after Treasurer's recommendation and consultation, with ability to add/subtract a penalty element (section 2(2)(a)–(c)).","Attorney‑General may vary the penalty rate to account for changes in the institutional rate without repeating the full consultative steps (section 2(3)).","Deeming clause altering the interpretation of pre‑existing contracts and instruments (section 16), which raises interpretive and litigation issues.","Validation and re‑opening provisions covering past orders and calculations, including an explicit 15.8% cap for reopened cases (sections 14, 15, 17), creating transitional complexity.","Reliance on publication timing in the Government Gazette as the formal notice mechanism and a provision validating certain retroactive Gazette notices (section 2(1), section 17)."],"plain_english_summary":"The law replaces references to the Australian Loan Council maximum with a single statutory “penalty interest rate” set and published by the Attorney‑General after a Treasurer recommendation of an institutional rate, with an added or subtracted penalty adjustment. It makes creditors entitled to interest at that published rate (and debtors liable), deems pre‑existing Loan Council references to mean the new rate, validates certain past calculations and orders, and permits limited re‑opening of cases where interest was previously refused."},"summary":{"complexity_score":2,"scope_assessment":{"changed":false,"description":"The Act appears to have maintained its original narrow purpose since 1983 — setting and updating the penalty interest rate in Victoria. There is no indication from the available information that its scope has broadened or shifted from its original intent."},"complexity_factors":["The legislation itself is extremely short and narrow in scope — it essentially exists to establish and update a single interest rate","The version history metadata provided is incomplete, making it difficult to assess amendments over time","The practical application requires cross-referencing with other Acts (such as the Supreme Court Act or various contract law instruments) to understand full context","Rate-setting mechanisms may involve delegated authority, adding a minor layer of administrative complexity"],"plain_english_summary":"## Penalty Interest Rates Act 1983 (Victoria)\n\nThis Act sets the official **penalty interest rate** in Victoria — the rate of interest that can be charged when someone fails to pay a debt on time, particularly in legal and commercial situations.\n\n**Who does this affect?**\n- Anyone who owes money under a court judgment or legal order\n- Businesses and individuals involved in contracts that reference the penalty interest rate\n- Lawyers calculating interest on unpaid legal costs or damages\n\n**Why does it matter?**\nWhen a court awards you money (for example, in a lawsuit), or when someone is late paying what they owe under a contract, the penalty interest rate determines how much *extra* they must pay for every day the debt remains unpaid. This rate is set and updated periodically by the relevant authority.\n\n**In plain terms:** If someone owes you money and doesn't pay on time, this Act determines the interest rate that \"punishes\" the delay — giving debtors a financial incentive to pay promptly."}},"importantCases":[],"_links":{"self":"/api/acts/penalty-interest-rates-act-1983","history":"/api/acts/penalty-interest-rates-act-1983/history","analysis":"/api/acts/penalty-interest-rates-act-1983/analysis","conflicts":"/api/acts/penalty-interest-rates-act-1983/conflicts","importantCases":"/api/acts/penalty-interest-rates-act-1983/important-cases","documents":"/api/acts/penalty-interest-rates-act-1983/documents"}}