Ali v Hartley Poynton Ltd

The plaintiff seeks interest under s.60 Supreme Court Act 1958. There is a dispute between the parties as to the approach to be taken.

(a) at the time when judgment was entered, the estate of the deceased could not recover damages which included exemplary damages as a result of the operation of s 29 (2)(a) Administration and Probate Act 1958 (the Act);

(b) in those circumstances an error was made in entering the judgment for the benefit of the estate which included exemplary damages and the slip rule applies;[1] and

(c) the order should be vacated or varied.

The parties are in dispute however, as to the precise course that should be followed.

18. Section 29 of the Act provides

(1) "Subject to the provisions of this section, on the death of any person, all causes of action subsisting against or vested in him shall survive against or (as the case may be) for the benefit of his estate:

Provided that this sub-section shall not apply to causes of action for defamation or seduction or for inducing one spouse to leave or remain apart from the other.

(2) Where a cause of action survives as aforesaid for the benefit of the estate of a deceased person the damages recoverable for the benefit of the estate of that person -

(a) shall not include any exemplary damages;

(b) in the case of a breach of promise of marriage shall be limited to such damage (if any) to the estate of that person as flows from the breach of the promise to marry;

(c) where the death of that person has been caused by the act or omission which gives rise to the cause of the action -

(i) shall be calculated without reference to any loss or gain to his estate consequent on his death, except that a sum in respect of funeral expenses may be included;

(ii) shall not, except as provided in sub-section (2A), include any damages for his pain or suffering or for any bodily or mental harm suffered by him or for the curtailment of his expectation of his life;

(iii) shall be calculated without reference to the future probable earnings of the deceased had he survived and without any allowance for the loss of his earning capacity that relates to any period after his death."

The effect of the section in this case, if applied, appears to be that the causes of action relied on by the plaintiff subsisted after Rahmat Ali's death but the damages recoverable ceased to include exemplary damages.

27. The plaintiff, however, relies upon a line of authority which recognises the Court's power to order that a judgment take effect on an earlier date that precedes the death of the deceased. The plaintiff submits that such an order should be made in the present case. In particular, he submits that it should be ordered that the judgment have legal force and effect nunc pro tunc as at the last day of the actual hearing in the trial, being 16 October 2001.

30. The principle relied upon appears to be of long standing. I was referred to a long line of authority.[2] The first case relied upon by the plaintiff is the case of Evans v Rees.[3] Reliance is placed in particular on the statement of law of Lord Denman CJ referring to the power to enter judgment nunc pro tunc

"It is a power at common law, and by the ancient practice of the Court, to prevent an unjust prejudice to the suitor by the delay unavoidably arising from the act of Court, and has been universally exercised, unless the delay is imputable to the laches of the party applying." [4]

I was referred also to the statement of "the rule at law" in Chitty's Archibold's Practice, Queen's Bench[5] which stated that

"The court will in general permit a judgment to be entered nunc pro tunc, where the signing of it has been delayed by the act of the Court. Therefore, if a party died.... whilst the Court are considering their judgment, the Court will allow judgment to be entered after the death nunc pro tunc in order that the party may not be prejudiced by a delay arising from an act of the Court."

36. The quoted passage was cited and relied upon in Turner's case[6] (the "Turner principle") where it was noted that the normal application of what was described as the "rule at law" involved dating the judgment on the day on which argument was concluded. Sir Charles Hall, V.C. stated[7]

"Suffice it to say that the object is to put the party on the one side or the other, plaintiff or defendant, exactly in the same position as if judgment had not been delayed by the Court."

The plaintiff also referred to and attempted to distinguish three decisions, Foppoli v Public Trustee[8], I_n the Marriage of Sims[9] and Kalejs v Minister for Justice and Customs[10]._ In the latter case, Kenny, J analysed the earlier decisions and noted that a distinction had been drawn in Foppoli and Sims between cases where the cause of action survived at common law to the benefit of the estate and cases where the cause of action did not. Kenny, J held that the power to enter judgment nunc pro tunc was not available where the cause of action did not survive for the benefit of the estate. I question that distinction[11] but, as I have already noted, in the present case s.29 has the effect that the relevant causes of action survived. On the basis of Kenny, J's analysis, the power to enter judgment nunc pro tunc remained available. The defendant does not seek to rely on the above three decisions and does not argue in the present case that the relevant causes of action did not survive. Rather the issue is whether, the causes of action having survived, the power may be used to enter judgment for exemplary damages which s.29 states are not recoverable for the benefit of the estate.

41. For the defendant it is submitted that s.29(2) should be applied in its terms. Thus it would have the effect that while the causes of action survive for the benefit of the estate, the damages recoverable in respect of that cause of action had been affected by the death of the deceased. Counsel submits that in none of the situations identified in s.29(2) could the Turner principle be applied. Counsel further submits that to backdate any judgment would secure for the estate a benefit taken away by the section. Counsel argues that it would be unjust to apply the Turner principle in view of the fact that s.29 would deny the recovery of damages in circumstances where the plaintiff had died prior to the hearing or during the hearing. Counsel submits that delay from the conclusion of hearing to judgment is part of the normal court processes particularly in a case as complex and lengthy as the present one. He submits that s.29(2) of the Act is clear and unequivocal and should be applied.

44. Counsel referred to the decision of the House of the Lords in Gammell v Wilson[12]. But that decision does not address the issue before me which is the much narrower question of whether s.29 of the Administration and Probate Act overrides the long established common law principle referred to in Turner's case above.

47. Both counsel accepted that the arguments they were advancing on the Turner principle would apply to cases concerned with each of the heads of damages referred to in s.29(2) of the Act.

50. The Turner principle is one that has been recognised for a very long time.[13] It can be applied in situations where s 29 applies. The Act is silent as to the application of that principle. The question to be determined, therefore, is whether s.29(2) impliedly overrides the long established common law principle. I can see no basis for such implication. It should, therefore, be concluded that Parliament did not intend to abrogate that principle.[14]

53. This conclusion is supported by the legislative history. The provision was first enacted in Victoria in 1942 and was based on English legislation enacted in 1934[15]. That legislation in turn was the result of a Report of the Law Revision Committee. In the discussion of the law, the proposals and the legislation, consideration does not appear to have been given to excluding the Turner principle.

56. For the foregoing reasons, I am of the view that the Act does not abrogate the principle.

59. In applying the principle, it must be remembered that what is conferred is a discretionary power to be used to avoid prejudice to the parties resulting from delay by the court. Counsel for the defendant has submitted that the estate suffered no harm at the hands of the defendant. But that may be said in most, if not all, of such cases and the above statements of principle do not appear to require such harm to the estate.

62. It may be that the power would not be exercised in respect of a claim for damages, for example, for future pain and suffering which are purely personal to the deceased and will not occur.[16] There is a limited personal element in awarding exemplary damages to the plaintiff - assuaging the plaintiff. But there are other more significant purposes, namely, punishment and deterrence, which may still be served notwithstanding the death of Rahmat Ali. Further, the events giving rise to the damages occurred prior to Rahmat Ali's death.

65. In my view, the power should be exercised in this case in favour of the plaintiff. To fail to do so would cause prejudice to result from the actions of the Court.

68. The question arises as to the appropriate form of the orders to be made and I will invite submissions from counsel on that aspect.

72. The plaintiff claims interest pursuant to s.60 of the Supreme Court Act 1958.

75. It is common ground that interest is prohibited in respect of an award of exemplary damages.[17] As to the balance of the damages awarded, the defendant submits that good cause is shown in the present case for not awarding interest from the date of the commencement of the proceedings.

78. The defendant submits that the damages awarded to the plaintiff include damages for the lost opportunity to utilise the money lost. Damages for lost opportunity were awarded in respect of the original investment of $101,818.54 in the sum of $50,000. This reflected the lost investment opportunity in respect of the relevant period of nearly three years concluding in November 2000. The defendant also refers to the fact that $500,000 was awarded for the lost investment opportunity arising from the Telstra shares. It is submitted that a further award of statutory interest would be the equivalent of awarding interest on interest which is not authorised by the Act. In conclusion, the defendant submits that it follows that interest should not run from the commencement of the writ but from the date of the judgment.

81. Plaintiff's counsel submits that the defendant's arguments assume that there is no distinction between the award of statutory interest on the award of damages and the award of damages for the lost commercial opportunity. Counsel submits that the purpose of the award of statutory interest is to place the successful plaintiff

"in the position in which he would have been had the amount of the verdict been paid to him at the date of the commencement of the action".[18]

85. The plaintiff's analysis appears to me to be correct. The award of statutory interest is to compensate the plaintiff for the fact that he was, at the time proceedings commenced, entitled to the damages subsequently found and awarded to him. In those circumstances there is no doubling up of compensation as the defendant seeks to argue.

88. The defendant did not advance other reasons for denying interest from the commencement of the writ and accordingly I will order that statutory interest be paid from that date. I will invite the parties to attempt to reach an agreement on the quantum of that amount.

I certify that this and the 7 preceding pages are a true copy of the reasons for Judgment of Smith J of the Supreme Court of Victoria delivered on 21 June 2002.

[1] L. Shaddock and Another v City of Parramatta, [1982] HCA 59; [1983] 151 CLR 590; Commonwealth v McCormack [1984] HCA 57; [1984], 155 CLR 273

[2] Cumber v Wane 1 Strange 426; Collinson v Lister, 20Beav.354; Evans v Rees, 12 AD. and E.168; Turner v London and South Western Railway Company, [1874], LR 17 Eq 561; Eckroyd v Coulthard, [1897], 2 Ch 554; Hoskins and Another v Thompson and Another, [1894], WN (NSW) 121; Bonsor v Musician Union, [1954], All ER 822

[8] [1970] WAR 73

[9] [1980] 50 FLR 286

[10] [2001] FCA 1769; [2001] 111 FCR 442

[11] The decisions in Sims and Kalejs rely on a view of Foppoli that is in my view debatable. In Foppoli, Hale, J. did not cite Turner's case. Burt, J. did, but held that the Tribunal did not possess the requisite power. He drew attention to the distinction between cases where the cause of action survived and those where it did not but reserved his opinion on whether it should be drawn. It should be noted also that the principle has been applied in circumstances where the cause of action at common law did not survive, eg, trespass whether to goods or land - see, for example Craven v Hanley, Barnes 255; Winfield, "Death as affecting liability in tort", 29 COL L Rev 239. The case of Craven was decided in 1738. Legislation was not enacted until 1833 (3 & 4 William IV C42) to enable executors or administrators of an estate to maintain proceedings in trespass.

[12] [1981] 2 WLR 248, at 260

[13] Cumber v Vane, above, reported in the 5th year of the reign of George I, 1719

[14] Pearce and Geddes, Statutory Interpretation Australia, 5th Ed. [5.22] ff., citing Potter v Minahan [1908] HCA 63; [1908], 7 CLR 277 and subsequent authorities

[15] Law Reform (Miscellaneous Provisions) Act; see discussion Victorian Parliament, Legislative Assembly, Hansard 21.7.42, 278

[16] c.f. Monahan v Nelson [2000] 186 Dlr 4th (193).

[17] Supreme Court Act 1958 s.60(3)(c).

[18] Barwick C.J. in Ruby v Marsh, [1975], 132CLR 642,65219.