Mond v The Age Company Pty Limited

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

1. By reasons for judgment in this defamation proceeding published on 8 May 2025, I determined that the applicant was entitled to damages for non-economic loss, and that there should be judgment for the applicant against the respondents in the sum of $120,000 plus statutory interest: Mond v The Age Company Pty Limited [2025] FCA 442.
2. The parties are unable to agree on pre-judgment interest.
3. Section 51A(1) of the Federal Court of Australia Act 1976 (Cth) provides that in any proceeding for the recovery of money the Court shall, upon application, order that there be included in a sum for which judgment is given an amount for interest between the date when the cause of action arose and the date when judgment is entered. The rate of interest and the period over which interest is to be calculated are left to the Court's discretion. The Court also has power to include a sum for interest in a lump sum in lieu of calculating interest.
4. The applicant submits that a sum for pre-judgment interest on damages should be calculated by reference to a rate that is 4% above the applicable Reserve Bank of Australia cash rate from time to time in accordance with the Court's Practice Note on Interest on Judgments, GPN-INT. On this basis, the applicant calculates interest at $28,480.77, and submits that a fair amount for interest should be assessed in a lump sum of $25,000. The respondents submit that pre-judgment interest should be assessed in the sum of $12,600, equating to a rate of 3% over a period of 3.5 years.
5. The applicant's damages for non-economic loss were assessed at the time of the judgment, and not by reference to the value of money at the time the applicant sustained the harm which the damages compensate. Therefore, the considerations referred to in MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657 (Gogic) apply. They include that the rate of interest chosen should not incorporate a component representing the inflationary effect on the value of money. It was for that reason that in Gogic it was held that it was not appropriate to apply "commercial rates" of interest in the calculation of interest on damages for non-economic loss. Instead, a rate of 4%, which was referred to as the "real rate" of interest was held to be fair and reasonable compensation for a claimant being deprived of the use of money on account of damages for non-economic loss.
6. There is a further consideration relevant to the calculation of a fair and reasonable sum for pre-judgment interest on damages in defamation proceedings that is recognised. That is, that it is usual to treat the claimant's loss as being spread over the period from the date of publication until trial: John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131 (Kelly) at 142-143 (McHugh JA, Kirby P agreeing). However, it does not follow that the loss is evenly spread. In Australian Consolidated Press Ltd v Driscoll (1988) Aust Torts Reports 80-175 (Driscoll), it was held by the New South Wales Court of Appeal that a substantial component of the award of damages in that case represented vindication for damage suffered upon publication, and therefore it was not appropriate simply to halve the interest rate. The Court of Appeal included a sum for interest that represented 70% of the 15% commercial rate that was used as the starting point in that case.
7. Both Kelly and Driscoll were decided before Gogic. Subsequently, in Hodge v TCN Channel Nine Pty Ltd No 2 - Interest and Costs [2006] NSWSC 1272, Smart AJ reviewed the relevant authorities to that point in time and brought the two threads together. Smart AJ held that damages for vindication run from publication, and that in the circumstances of that case by far the greatest hurt to the plaintiff occurred upon and shortly after publication. His Honour therefore started with an interest rate of 4% and discounted it to 2.5% from the date of publication to the date of judgment.
8. In Hanson-Young v Leyonhjelm (No 5) [2020] FCA 34 (Hanson-Young) at [8], White J referred to the recognition in the cases that the harm suffered by an applicant as a result of a defamatory publication is usually greatest at, and shortly after, the time of publication, so that harm should not be regarded as having accrued at a constant rate over that period. No party in Hanson-Young submitted that the rate of interest should be calculated in accordance with the Court's Practice Note on Interest on Judgments, GPN-INT. Instead, the starting point was an amount which took account of the fact that the damages for non-economic loss were assessed at the time of judgment and not at the time the cause of action accrued, and which therefore excluded any inflationary effect on the value of money. At [15], White J referred to the 4% figure that had been accepted in Gogic and reasoned that an amount of interest representing a rate of around 3% was appropriate.
9. In Kumova v Davison (No 2) [2023] FCA 1 at [347], Lee J cited Hanson-Young and stated that an interest rate of 3-3.5% is generally awarded in defamation proceedings, and settled on a rate of 3%. In Duma v Fairfax Media Publications Pty Ltd (No 3) [2023] FCA 47 at [595]-[599], Katzmann J reviewed the authorities, applied the reasoning in Gogic coupled with Kelly, and arrived at an interest rate of 3%. One of the authorities to which Katzmann J referred was the decision of Rares J in Chau v Australian Broadcasting Corporation (No 3) [2021] FCA 44; 386 ALR 36 (Chau v ABC) in which his Honour applied the rates in the Interest on Judgments Practice Note. However, Katzmann J observed that Rares J had not cited Gogic, which her Honour noted she was bound to follow.
10. The applicant submitted that the rates provided for in the Interest on Judgments Practice Note should be the starting point, citing Chau v ABC, and Grincelis v House [2000] HCA 42; 201 CLR 321 at [21] (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ,) where it was stated that use of practice notes as a reference point gives litigants notice of interest rates that will be appropriate to guide the Court in fixing interest. Chau v ABC was decided without reference to Gogic. And Grincelis v House did not concern an award of damages for non-economic loss assessed at the time of judgment, but a claim for damages for attendant care that was assessed by reference to the value of the care when given from time to time. At [21], Gogic was specifically referred to and distinguished. The rates provided for in the Practice Note do not distinguish between claims for economic loss, and claims for non-economic loss which are assessed at the time of judgment. Although there is no evidence as to the basis on which the rates in the Practice Note were struck, they have more in common with the "commercial rates" of interest that were rejected in Gogic because they take account of the inflationary effect on the value of money rather than with a "real rate" of interest: cf, Grincelis v House at [21].
11. The appropriate rate is therefore within the range of 3 to 3.5%, being based on the 4% rate referred to in Gogic. This is arbitrary, but it is also practical and leads to consistency. It is hardly desirable that evidence be led from economists as to rates of inflation and the "real rate" of interest in every case involving pre-judgment interest on an award of damages for non-economic loss: cf, Todorovic v Waller [1981] HCA 72; (1981) 150 CLR 402 at 445 (Mason J).
12. In this case, the applicant's harm was continuing, but was greater at the time of the two sets of publications on 13 December 2021 and 18 February 2022. I will include a sum of interest assessed in the lump sum of $12,600 advanced by the respondents, which represents a small rounding up upon the application of a 3% rate to $120,000 for the period 13 December 2021 until this day.

I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wheelahan.