On 19 November 2024, I delivered my reasons for judgment in this matter: In the matter of Shire Lind Developments (NSW) Pty Ltd [2024] NSWSC 1454 (Primary Judgment). This judgment assumes familiarity with the Primary Judgment, and adopts defined terms used in that judgment.
In short, I determined that:
1. the Plaintiffs' insolvent trading claims against Mr Gribble and Quantum Management were established, and the Liquidator was entitled to recover the sum of $1,532,291.06 against each of them in respect of those claims;
2. the Plaintiffs' unfair preference claim against Quantum Development was established, and the Liquidator was entitled to an order under s 588FF(1) that Quantum Development pay the Company the amount of $82,500;
3. in respect of the amount in paragraph (1) above, the Plaintiffs were entitled to interest under s 100 of the Civil Procedure Act 2005 (NSW) from 21 April 2020 (being the date of the appointment of the Liquidator) to the date of judgment; and
4. in respect of the amount in paragraph (2) above, the Plaintiffs were entitled to interest from 10 February 2023 (being the date of the Liquidator's demand) to the date of judgment.
I directed the parties to bring in short minutes of order to give effect to my findings in the Primary Judgment, including dealing with the calculation of interest.
The parties have agreed on proposed orders to give effect to the Primary Judgment, other than in one respect. The matter in issue is the amount of pre-judgment interest in respect of the sum awarded for the insolvent trading claims.
The Plaintiffs have, in accordance with the Primary Judgment, calculated interest on that sum from 21 April 2020 to the date of judgment, arriving at a figure of $412,625.14 for the period up to and including 2 December 2024, increasing at a daily rate of $349.58 until the date that orders are made.
The Defendants do not dispute that calculation. However, the Defendants contend that interest on the insolvent trading claim should not run from the date on which the Liquidator was appointed (21 April 2020) but from the date of the demand made by the Liquidator (10 February 2023).
The Defendants are, in effect, asking the Court to reconsider a matter that has already been heard and determined, in circumstances where they were directed to provide orders to give effect to the determinations made in the Primary Judgment.
The Defendants sought that this issue be revisited pursuant to r 36.16(3B) of the Uniform Civil Procedure Rules 2005 (NSW). That rule applies where a judgment or order has been entered. In the present case, judgment has not been entered. However, orders have been entered for the parties to bring in orders to give effect to the reasons for judgment, which include the determination as to the date from which interest should run.
Whatever the precise basis on which the Defendants' application is advanced, any power of the Court to reconsider a matter which has already been heard and determined is to be sparingly exercised. In Autodesk v Dyason (No 2) (1993) 176 CLR 300 at 302-303; [1993] HCA 6, Mason CJ observed that:
1. the exercise of the jurisdiction to reopen a judgment and to grant a rehearing should be "exercised with great caution, having regard to the importance of the public interest in the finality of litigation";
2. generally speaking, "it will not be exercised unless the applicant can show that by accident without fault on his part he has not been heard";
3. "the jurisdiction is not to be exercised for the purpose of re-agitating arguments already considered by the Court; nor is it to be exercised simply because the party seeking a rehearing has failed to present the argument in all its aspects or as well as it might have been put";
4. "What must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing"; and
5. "The purpose of the jurisdiction is not to provide a backdoor method by which unsuccessful litigants can seek to re-argue their cases".
I made the determination regarding the date from which interest should run in respect of the insolvent trading claim in circumstances where:
1. in the Amended Statement of Claim, the Plaintiffs specifically claimed interest on the sums awarded in respect of the insolvent trading claim "from 21 April 2020 to the date of judgment" (prior to the amendment of the pleading, interest had instead been claimed from the date of the Liquidator's demand);
2. in opening written submissions dated 18 October 2024, the Plaintiffs:
1. advanced submissions in support of the award of interest in respect of the insolvent trading claim from the date of the Liquidator's appointment, by reference to authority (Powell v Fryer [2001] SASC 59 at [115] per Olsson J (Duggan and Williams JJ agreeing); Smith v Bone (No 2) (2015) 233 FCR 568; [2015] FCA 389 at [17] (Gleeson J)); and
2. in contrast, sought interest in respect of the unfair preference claim from the date of the Liquidator's demand (with reference to authority);
1. in opening oral address, the Plaintiffs expressly drew attention to their claim for interest in respect of the insolvent trading claim from the date of the Liquidator's appointment, and the basis on which it was advanced;
2. in closing oral address, the Plaintiffs again referred to this claim for interest in respect of the insolvent trading claims, the authority upon which they relied, and to the difference between the dates from which interest was claimed in respect of the insolvent trading claims and the unfair preference claim; and
3. the Defendants did not advance any submission at the hearing, in writing or orally, disputing the Plaintiffs' entitlement to interest from the date of the Liquidator's appointment in the event that the insolvent trading claim was established and, in particular, did not refer to any authority in response to those upon which the Plaintiffs relied or propose any alternative date from which interest should run.
Having regard to those matters, the Defendant had ample opportunity to advance submissions regarding the issue of the date from which interest should run on the insolvent trading claim, and did not to do so. I do not consider that the Defendant should be permitted, after that issue has been determined based on the submissions advanced at hearing, now to use the occasion of making orders to give effect to that determination as an avenue to reopen this issue.
The position might be different if the Defendants were contending that, as a matter of power, the Court cannot make an order for interest of the type which I have determined should be made, or that such an order was contrary to binding authority.
The Defendants do not advance any such submission. Instead, they acknowledge that, in an insolvent trading claim, the award of interest "is usually taken to run from the date of the appointment of the liquidator". In conceding this point, the Defendants referred to the authorities upon which the Plaintiffs relied at trial, and which were referred to in the Primary Judgment at [454]. In particular, the Defendants acknowledged that the submission advanced by the Plaintiffs, which I accepted in the Primary Judgment, is supported by the intermediate appellate court authority of Powell v Fryer at [115], which was applied by Gleeson J in Smith v Bone at [14]-[17] and by McElawine J in Aquisite Pty Ltd v Moss (No 2) [2023] FCA 727 at [4].
However, the Defendants submit that this is not "an inflexible rule" and refer to a recent decision where Halley J determined to award interest on an insolvent trading claim from the date of the liquidator's demand, rather than from the date of the liquidator's appointment: Stone (liquidator), in the matter of Ironbark Blacksmithing Pty Ltd (in liq) v Mizzi (No 2) [2024] FCA 927.
The decision in Stone was handed down around two months before the hearing in this matter. It referred to the authorities on which the Plaintiffs relied. It expressly considered the issue whether the date from which interest ran in respect of an insolvent trading claim should be the same as the date from which interest ran in respect of an unfair preference claim. There was no explanation by the Defendants as to why they did not refer to this decision at the hearing, in circumstances where the issue was squarely raised by the Plaintiffs' pleading, written submissions, opening address and closing address.
In those circumstances, I decline to revisit the determination I have already made which, as the Defendants acknowledge, is consistent with the course that is usually taken in such claims, and is supported by intermediate appellate court authority.
Accordingly, I will make orders in the form of the orders proposed by the Plaintiffs, which provide calculations (which are not disputed) of interest running from the dates specified in the Primary Judgment to the date of these orders.
[2]
Orders
For those reasons, I make the following orders. The Court:
1. Declares that the First Defendant contravened s 588G(2) of the Corporations Act 2001 (Cth) (Act) in relation to the debts incurred by the Second Plaintiff to Lords Property Group Pty Ltd, BT Projects Marketing Pty Ltd, Stornoway Capital Partners Pty Ltd and RUK Australia ABN 15 698 438 139 in the period from 13 June 2018.
2. Declares that the Second Defendant contravened s 588V(1) of the Act in relation to the debts incurred by the Second Plaintiff to Lords Property Group Pty Ltd, BT Projects Marketing Pty Ltd, Stornoway Capital Partners Pty Ltd and RUK Australia ABN 15 698 438 139 in the period from 13 June 2018.
3. Orders that the First Defendant and Second Defendant pay compensation to the Second Plaintiff in the sum of $1,532,291.06 pursuant to ss 588M(2) and 588W(1), respectively, of the Act.
4. Orders that the First and Second Defendants pay to the Second Plaintiff interest in the sum of $412,625.14 for the period up to and including 2 December 2024, increasing at a daily rate of $349.58 until the date of these orders.
5. Orders that the Third Defendant pay to the Second Plaintiff the sum of $82,500.00 pursuant to s 588FF(1) of the Act.
6. Orders that the Third Defendant pay the Second Plaintiff interest in the sum of $11,958.34 for the period up to and including 2 December 2024, increasing at a daily rate of $18.82 until the date of these orders.
7. Orders that the Defendants pay the Plaintiffs' costs of the proceedings, as assessed or agreed.
[3]
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Decision last updated: 06 December 2024