Supreme Court Civil Procedure Act 1932 (Tas), s 201(1).

Turner v London & South-Western Railway Co (1874) LR 17 Eq 561, followed.

Procedure - Judgments and orders - Interest on judgments - Time from which interest runs - Trial of outstanding issue after first trial and successful appeal.

Supreme Court Civil Procedure Act 1932 (Tas), s 165.

Judgment Number: [2015] TASSC 2

IVAN MERCER v ALLIANZ AUSTRALIA INSURANCE LIMITED (No 4)

1. These reasons relate to an application by the plaintiff, Ivan Mercer, for a judgment against the defendant, Allianz Australia Insurance Limited, to be "restored". The background can be summarised as follows:
   • On 11 March 2008 the plaintiff was catastrophically injured in the course of his employment. His employer was a company named Windsor Agencies Pty Ltd. That company was subsequently deregistered.
   • In February 2012 the plaintiff commenced this action against Allianz, which was the insurer of Windsor Agencies. He claimed an amount in the nature of damages pursuant to s 601AG of the Corporations Act 2001 (Cth).
   • Allianz pleaded a limitation defence based on s 5A(3)(a) of the Limitation Act 1974, contending that the plaintiff had brought his action more than three years after the "date of discoverability".
   • I dealt with the limitation issue as a preliminary point, and determined that s 5A(3)(a) did not apply to an action based on s 601AG of the Corporations Act: Mercer v Allianz Australia Insurance Limited [2013] TASSC 11; (2013) 273 FLR 459. I was wrong.
   • I proceeded to try nearly all of the other issues in the action in April 2013. I concluded that Windsor Agencies had been liable for damages for negligence; that there was contributory negligence on the plaintiff's part; and that he was entitled to recover substantial damages: Mercer v Allianz Australia Insurance Limited (No 2) [2013] TASSC 35.
   • The parties subsequently agreed on some matters that they had asked me not to deal with in that determination. As a result of them reaching agreement on outstanding matters, I ordered on 24 July 2013 that judgment be entered for the plaintiff against Allianz for $5,095,516 plus costs.
   • Allianz ceased making payments under the Workers Rehabilitation and Compensation Act 1988 as from the day of the judgment. It has made no payments pursuant to that Act in respect of the plaintiff's injury since then.
   • On or about 6 August 2013 Allianz paid $2 million of the judgment sum. The balance was not paid.
   • Allianz appealed to the Full Court, which held that the limitation period imposed by s 5A(3)(a) applied as if Windsor Agencies had not been deregistered: Allianz Australia Insurance Limited v Mercer [2014] TASFC 3. The Full Court ordered that the judgment dated 24 July 2013 be set aside. An order was made remitting to me the trial of the limitation issue that Allianz had pleaded in its defence, relying on s 5A(3)(a) of the Limitation Act.
   • I tried that issue on 7 October 2014, receiving further evidence and submissions. I reserved my decision.
   • On 22 December 2014 I determined that the plaintiff's action was not statute barred: Mercer v Allianz Australia Insurance Limited (No 3) [2014] TASSC 69.
2. It is clear that the plaintiff is now entitled to have judgment entered against Allianz for a substantial sum of money. However there is a dispute between the parties as to how much money, the date of the judgment, and the date from which post-judgment interest will run. The plaintiff has applied for an order that "the judgment of 24 July 2013 is restored", and for a determination that the defendant must pay post-judgment interest from 24 July 2013 until payment. Counsel for Allianz submitted that I had no power to make such orders; that I should re-assess the plaintiff's damages on the basis of the evidence presented in 2013; that that should result in a judgment for $4,582,655; that there should be liberty to apply in relation to expenditure incurred by the plaintiff between 25 July 2013 and the new judgment; and that post-judgment interest should accrue only as from the date of the new judgment. Counsel for the plaintiff indicated that his fall-back position was that, if damages were to be re-assessed, the plaintiff's case should be re-opened in respect of all issues concerning the quantum of damages, except past and future economic loss. Counsel for Allianz did not concede that any re-opening would be appropriate.
3. Because the Full Court made an order that the judgment dated 24 July 2013 be set aside, I cannot possibly have the power to order that the same judgment be reinstated. Only the High Court could do that. I can and must order that a new judgment be entered for the plaintiff against Allianz. It is therefore appropriate to treat the application for the old judgment to be "restored" as an application for a new judgment, backdated to 24 July 2013, with interest accruing from that date.
4. After hearing counsel, I decided first to determine whether I had the power to order the entry of a backdated interest-bearing judgment before proceeding any further.
5. The Supreme Court Rules 2000 contain a provision that governs applications for the entry of judgment following the determination of issues at trial - r 573(1). That subrule reads as follows:

(a) direct that any appropriate judgment be entered; or

(b) adjourn the case for further consideration; or

(c) give leave to any party to apply for judgment."

1. As can be seen, that provision is silent as to whether the Court has the power to backdate or postdate a judgment. In some other jurisdictions, the equivalent rules expressly authorise backdating and postdating. See, for example, the rules discussed in Borthwick v Elderslie Steamship Co [1905] 2 KB 516 and Vitous v Tuohill [1964] VicRp 78; [1964] VR 624. However it is clear from the authorities that a court has an inherent power to backdate a judgment, at least when the entry of judgment has been delayed by the court: Cumber v Wane (1721) 1 Str 426; 93 ER 613; Collinson v Lister [1855] EngR 351; (1855) 20 Beav 355; 53 ER 639; Turner v London & South-Western Railway Co (1874) LR 17 Eq 561.
2. If there is any doubt as to whether the Court has an inherent power to backdate a judgment, then a power to backdate must exist pursuant to s 201(1) of the Supreme Court Civil Procedure Act 1932. That subsection reads as follows:

"(1) In any case in which no form or manner of procedure is provided for by this Act or the Rules of Court or in which any difficulty arises or doubt exists as to the procedure or practice to be followed in, or with respect to, any proceeding in the Court, or about to be instituted therein, the Court or a judge, if satisfied that such case is unprovided for, or that there is any such difficulty or doubt, shall have jurisdiction to make such order and give such directions as to the institution or prosecution of the proceeding as may be necessary to meet the case, and any proceeding or step in a proceeding taken in accordance with any such order or direction, shall be deemed to be regular and sufficient. Any such order or direction made or given by a judge may be varied or discharged by a Full Court, but the variation or discharge of the order or direction shall not invalidate or affect the regularity or sufficiency of any proceeding or step in a proceeding taken pursuant to any such order or direction."

1. Pursuant to that subsection the Court, if need be, may exercise its jurisdiction to make an order as to the prosecution of the proceeding that is necessary to meet the case. There is no reason why an order for a backdated judgment should not be made pursuant to that subsection if such an order is appropriate in the circumstances of a particular case.
2. But for my error as to the applicability of s 5A(3)(a) of the Limitation Act, the issues relating to the date of discoverability would have been tried along with the other issues in April 2013, and would have been determined when I gave judgment on 24 July 2013. As a result of my error, it was not until 7 October 2014 that I conducted a trial of the issues as to the date of discoverability, and not until 22 December 2014 that I determined those issues. It must follow that, if the interests of justice would be served by backdating the judgment in this action to 24 July 2013, it would be appropriate to backdate it to that date.
3. However there are two matters that weigh against the making of an order for the entry of a judgment, backdated to 24 July 2013, for the original judgment sum:
   • As I have said, Allianz paid $2 million of the judgment sum. Some of that money was paid to Centrelink and Medicare because of statutory obligations. The balance was deposited into the plaintiff's solicitors' trust account on 6 August 2013.
   • No purpose would be served by backdating the judgment to a date earlier than the date from which post-judgment interest runs.
4. The entitlement of a successful plaintiff to post-judgment interest is governed by s 165 of the Supreme Court Civil Procedure Act. That section reads as follows:

"Every such judgment and order as is mentioned in section 164(1) shall carry interest at the rate of 5 per centum per annum, or such other rate as may be prescribed by the Rules of Court, from the time of the trial or inquiry, or, if there has been no trial or inquiry, from the time of signing or entering up judgment; and the amount of such interest shall be stated in the body of, and may be levied under, a writ of execution on such judgment."

1. As can be seen, the judgment, yet to be entered, shall carry interest "from the time of the trial". The trial of the issues in this action did not conclude until at least 7 October 2014, the day when I received the final evidence and submissions. On one view, it concluded on 22 December 2014 when I determined that the action was not statute barred. No date earlier than 7 October 2014 could be "the time of the trial" for the purposes of s 165. The backdating of the judgment to any earlier date would therefore be futile.
2. The Victorian equivalent to our s 165, similarly worded, was considered by Schutt J in Craine v Colonial Mutual Fire Insurance Co Limited [1923] VicLawRp 78; [1923] VLR 623 at 629. In that case the plaintiff failed at trial but succeeded in the High Court. The order of the High Court was filed in the Supreme Court of Victoria. The plaintiff sought to recover interest as from the date of the High Court order. Under s 181 of the Supreme Court Act 1915 (Vic), interest was payable "from the time of the trial or inquiry; or, if there has been no trial or inquiry, from the time of entering up judgment". At 629, Schutt J said:

"I think interest was properly claimed under sec 181 of the Supreme Court Act at the rate of 8 per cent, and, further, that it was properly claimed as from the date of the order of the High Court. It may be that it was claimable as from the date of the original Supreme Court judgment, or it may be that it was claimable even from the time of the original trial of the action, having regard to the difference in the language of sec 181 of our Act and that of sec 17 of the English Statute 1 & 2 Vict, c 110, which does not refer to the time of trial. But whatever may be the true view as to these matters, it seems to me clear that the plaintiff was well within his rights in demanding interest at the rate and fro the period specified in the writ ...".

1. The English statute referred to by his Honour was the Judgments Act 1838 (Imp). Section 17 of that Act simply provided that every judgment debt was to carry interest "from the time of entering up the judgment until the same shall be satisfied". Interest did not run from the end of the trial, nor from the date when judgment was pronounced, but from the date when the judgment was entered up. The first Tasmanian legislation providing for post-judgment interest was the Interest on Judgments Act 1872. Under s 1 of that Act, interest ran "from the time of entering up judgment, or from the time of the commencement of this Act". That Act was repealed by the Supreme Court Civil Procedure Act. The provision in s 165 for interest to run "from the time of the trial or inquiry" was introduced at that time. In cases where judgment is given immediately at the conclusion of a trial, that provision enables a successful plaintiff to recover interest from the date judgment is pronounced. It may be that the legislature enacted s 165 without having in mind the situation where judgment is reserved at the end of a trial, and delivered only after a significant interval.
2. There have been some Tasmanian cases as to the date from which post-judgment interest runs. Agricultural Bank of Tasmania v Brown [1958] TASStRp 8; [1958] Tas SR 22 was a similar case to Craine. The plaintiffs in that case failed at trial before Gibson J, but succeeded in the High Court, which ordered that judgment be entered in their favour in this Court for a sum by way of damages. On a motion for judgment before Gibson J, his Honour ordered that interest was to be payable from the date on which he originally dismissed the action. At 23, after referring to Craine, he said:

"Consequently interest should be payable on the sum awarded at five per cent from the time of the trial until payment, in accordance with s 165 of the Supreme Court Civil Procedure Act 1932. The action was concluded before me when I gave the judgment appealed from on 21 June 1956. Interest will run, therefore, from and excluding that date."

1. His Honour did not address the question whether, when judgment is reserved at the conclusion of a trial, interest runs from the date judgment is reserved or from the date judgment is delivered. I have established by reference to the Court's minute books that his Honour's judgment was a reserved judgment. It was described by the editor of the Commonwealth Law Reports as a written judgment: Agricultural Bank of Tasmania v Brown [1957] HCA 57; (1957) 97 CLR 503 at 506. His Honour determined that interest was to run from the date that the judgment was given, not the date on which judgment was reserved.
2. In Langmaid v Dobsons Vegetable Machinery Pty Ltd (No 2) [2014] TASSC 55, Tennent J dealt with a similar situation. She tried an action for damages, concluding the trial on 6 September 2012. She gave judgment dismissing the action on 31 May 2013. The Full Court allowed an appeal and ordered that there be judgment for an amount to be assessed. Counsel for the plaintiffs submitted that interest should be payable as from 6 September 2012. At [56], her Honour took the view that the trial was finalised by the decision on 31 May 2013, and ordered that the plaintiffs were to be entitled to interest as from the following day.
3. If this were a novel point, I might well conclude that "the time of trial" for the purposes of s 165 is the time when judgment is reserved at the end of a trial - in this case 7 October 2014. However, because of the principle of judicial comity, I think I should follow the decisions of Gibson J and Tennent J, and interpret "the time of trial" as referring to the date on which the action is determined. A major advantage of that interpretation is that it ordinarily results in post-judgment interest running from the day as at which any damages for continuing losses are assessed.
4. The Court has a discretion in relation to post-judgment interest under the Supreme Court Rules, r 887A(1). That subrule reads as follows:

"(1) Unless the Court at the time of giving judgment otherwise orders, a judgment or order under section 164(1) of the Act carries interest from the time of the trial or inquiry or, if there has not been a trial or inquiry, from the time of signing or entering up judgment at -

(a) the rate at which interest has been allowed up until the date of judgment in a case to which rule 347(1)(a) applies; or

1. Although the Court has a discretion to otherwise order, that provision should not be interpreted as empowering the Court to make an order for interest to commence from a date earlier than that fixed in accordance with s 165. That is to say, the correct interpretation must be consistent with s 165, rather than an interpretation that elevates a rule above a provision in a statute. Since, through no fault of his, the plaintiff has been deprived of post-judgment interest on over $3 million for a period of about 17 months, there seems no reason to reduce the interest rate below the ordinary rate for post-judgment interest. Such rates are of course designed to encourage judgment debtors to satisfy the judgments against them.
2. For the reasons stated above, I determine that I have the power to make an order for a backdated judgment to be entered for the original judgment sum, less the $2 million that has been paid, but that interest on such a judgment would run only from 22 December 2014.
3. I will hear counsel as to whether I should re-assess the plaintiff's damages, or whether I should order that judgment be entered for the outstanding part of the original judgment sum. The entry of a judgment, whatever date it bears, will extinguish the plaintiff's workers compensation entitlements: Workers Rehabilitation and Compensation Act, s 133(2). The proposal by counsel for Allianz that there be a judgment for some damages, and liberty to apply in relation to expenditure since 25 July 2013, is inappropriate because damages must be assessed once and for all: Fitter v Veal (1701) 12 Mod 543; 88 ER 1506; Tusyn v State of Tasmania (No 2) (2008) 18 Tas R 313.