Checchia v Insurance Australia Ltd t/as NRMA Insurance

Plaintiff's Further Submissions on Interest 15Mr Steven Dixon of counsel relied upon further written submissions dated 22 August 2014. In those submissions it was noted that I had determined that the plaintiff was entitled to interest at the rate of 5%: at [3]. In paragraph [4] it was stated: "... at paragraph 16 of the judgment His Honour appears to have inadvertently construed the claim for interest as being made on the amount of $191,981.00. The Plaintiff had claimed interest on the judgment sum of $1,031,981.00 from the date of the settlement agreement, less costs, or alternatively from 17 November 2006 (being 28 days after the date of the settlement agreement). The figure of $191,981 is calculated from the judgment sum of $1,031,981 less part payment of $800,000, less the sum of $40,000 for costs which is the interest claimed for the period from 26 March 2010 to 6 June 2014. It is unclear from the judgment when the claim for interest is to commence." 16In paragraph [5] of the further written submissions for the plaintiff it was noted that it was common ground that the plaintiff's claim for interest commenced from 17 November 2006 to date at the rate of 10% per annum. 17It was further submitted: "The Plaintiff submits that it is appropriate for His Honour to vary his judgment to give effect to his decision and orders for the payment of pre-judgment interest at the rate of 5%, which was not restricted by any time period, so that interest is to be paid on the judgment sum from either 20 October 2006 or 17 November 2006 to the date of judgment."

Defendant's Further Submissions as to Interest 18Mr Rewell SC on behalf of the defendant relied upon his further written submissions dated 27 August 2014. The relevant facts were conveniently summarised and set out in paragraphs [1]-[10] of those submissions. 19In paragraphs [11] and [13] of the further submissions for NRMA, the basis upon which NRMA had submitted that the court would decline to award any interest on any part of the judgment were set out. 20In paragraph [15] NRMA noted that it had submitted that if the plaintiff had been held out of his settlement in whole or in part since 17 November 2006 (when the settlement would otherwise have been payable by NRMA), that was entirely a matter of the plaintiff's own making. 21It was noted that the plaintiff's "gross dishonesty" which persisted up to and including the trial in this Court obliged NRMA to take the action it did and that it had a duty under s 116 of the MAC Act to defer fraudulent claims. 22It was noted at [21] that the Court, in the exercise of its discretion, awarded interest but only in respect of the period after the date of the part-payment of $800,000 by NRMA on 27 March 2010 at the rate of 5% for reasons stated in the judgment. The submissions noted that the plaintiff appeared now to assert in his submissions that the Court had overlooked the claim for interest prior to the date of the part-payment by NRMA. 23In relation to that submission, the position of NRMA was set out in paragraphs [23]-[25] of its further submissions. In paragraph [23] it was stated: "NRMA takes the judgment to mean that this Court rejected the claim for interest up to the date of the part-payment on 27 March 2010, which was made after the first trial as a condition of a stay of the judgment of Rothman J." (emphasis in original) 24NRMA has submitted that the Court's order as to interest was just and equitable for the reasons referred to in the submissions including, in particular, paragraphs [24] and [25]. NRMA accordingly opposed the orders sought by the plaintiff in his Notice of Motion filed 20 June 2014. It was submitted that the judgment delivered on 6 June 2014 should stand and that there was no occasion for amendment of the judgment under UCPR 36.16.

Conclusion 25Under the provisions of s 100(1) of the Civil Procedure Act 2005, the Court is empowered to award interest calculated at such rate as the Court thinks fit (sub-s (a)) for the whole or any part of the period from the time the cause of action arose until the time the judgment takes effect (sub-s (b)). 26As noted above, one matter that the defendant insurer relies upon in the present proceedings in relation to the plaintiff's pre-judgment interest claim is that the delay that occurred before the plaintiff's entitlement was established may be attributable to his own fraudulent or deceptive conduct. 27Whilst that is a matter that is to be borne in mind, a fundamental matter not to be overlooked is the nature of the function of an award of interest as stated in the judgment of the High Court in MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657 at 663: "The function of an award of interest is to compensate a plaintiff for the loss or detriment which he or she has suffered by being kept out of his or her money during the relevant period". 28The joint judgment then continued: "There is no doubt that this is a very important purpose of statutory provisions providing for the award of interest on the amount of a debt or damages in respect of the period between the cause of action accruing (or, in some statutory provisions, the commencement of proceedings) and the date of judgment." 29There have been a number of decisions that have emphasised that the essential nature of an award of interest is to compensate a successful plaintiff by reason of delay in the payment of monies. The ultimate determination involves the exercise of discretion as to what is a just and appropriate award of interest in terms of the rate, the sum to bear interest, and the period for which it is to accrue. See, for example, Pheeney v Doolan (No 2) [1977] 1 NSWLR 601. 30As the High Court also noted in Haines v Bendall (1991) 172 CLR 60 at 63 (a personal injury case), an award of interest up to the date of judgment is an award of interest in the nature of damages. This fact acknowledges that the award of interest is an integral element in the attainment of the object of damages, namely, to compensate a plaintiff. In that regard, the High Court expressed that an award of interest is compensatory in character. 31In Screenco Pty Ltd v R L Dew Pty Ltd (2003) 58 NSWLR 720, Tobias JA, after referring to a number of decisions bearing upon the basis for and function of an award of interest, observed at 740: "In my opinion, it follows from the foregoing considerations that pre-judgment interest is only to be awarded to a plaintiff where, as a consequence of being deprived of the use of the judgment money during the relevant period, it has suffered a real and practical loss or detriment for which it should be compensated in order to ensure that it is restored fully to the position in which it would have been but for the defendant's wrongdoing." 32Having considered the relevant legislation and caselaw authorities, I am satisfied that the plaintiff is entitled to pre-judgment interest for a period commencing prior to 26 March 2010. 33As noted earlier, the power to award pre-judgment interest is exercisable at the discretion of the Court pursuant to s 100 of the Civil Procedure Act. 34In determining the plaintiff's entitlement to pre-judgment interest prior to 26 March 2010, I have had regard to the matters I considered in the judgment of 6 June 2014 at [24] in respect of awarding interest at a reduced rate of 5%. These matters include the plaintiff's failure to disclose the 1993 injury and the adverse findings made against him in respect of his pre-injury earnings, which conduct contributed to the delay resulting from the proceedings brought under s 118 of the MAC Act. 35The allowance of interest in the judgment on interest and costs delivered on 6 June 2014 at half the rate that the parties had agreed upon in the settlement agreement made on 20 October 2006 (5% in lieu of the agreed rate of 10%) represented a significant reduction. The reduced rate of interest was determined having regard to the plaintiff's conduct referred to in para [34] above and the delay resulting from such conduct. 36In determining the plaintiff's entitlement to interest in respect of the period between 17 November 2006 and 26 March 2010, I do not consider that the plaintiff should be further penalised by awarding interest for only part of that period. As I have stated, the reduced rate of 5% was struck as one which I considered would appropriately reduce the plaintiff's entitlement to interest taking into account his conduct and the delay associated with the proceedings. 37I have accordingly determined that, in addition to the interest awarded by the judgment and order delivered and made on 6 June 2014, the plaintiff is entitled to interest at the rate of 5% per annum for the period commencing on 17 November 2006 and concluding up to payment of the amount of $800,000 on 26 March 2010. 38The plaintiff sought an order that the defendant pay the plaintiff's costs of the motion. The defendant, however, submitted that each party should pay its own costs of the motion. 39Upon consideration of the evidence on the motion and the submissions of the parties, I have determined that the appropriate order is that each party should pay their own costs of the motion and I so order.

Orders 40I make the following findings and orders: (1)The plaintiff is entitled to interest from 17 November 2006 to 26 March 2010 at the rate of 5% per annum. (2)I note that the parties have calculated that interest at 5% for the period 17 November 2006 to 26 March 2010, taking into account workers compensation payments, is the amount of $114,840. (3)I accordingly determine and order that the plaintiff is entitled on the motion to an order for interest in that amount in respect of the period specified in (2) above by way of variation of the judgment delivered on 6 June 2014. (4)Each party is to pay its own costs in respect of the Notice of Motion filed 20 June 2014.

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: 09 September 2014