Post judgment interest when paid into a trust account

Mineralogy Pty Ltd v BGP Geoexplorer Pty Ltd (No 2) [2018] QSC 42

Jackson J

The present application concerned the payment of statutory post-judgment interest pursuant to the Civil Proceedings Act 2011 (Qld) (the CP Act). Relevantly, Jackson J ordered the applicant to pay the respondent US$17,629,673.68 (the judgement). That amount had subsequently been deposited to the respondent’s solicitors account on trust until a further order pending the hearing of an appeal.

The questions for his Honour therefore were:

  • whether the money order debt payable under the judgement is satisfied or remains payable; and
  • at what rate of post-judgment interest should be payable

Legislation

Section 59 of the CP Act provides, relevantly:

(1)          …

(2)           Interest is payable from the date of a money order on the money order debt unless the court otherwise orders.

(3)           The interest is payable at the rate prescribed under a practice direction made under the Supreme Court of Queensland Act 1991 unless the court otherwise orders.

(4)           However—

(a)           if the money order includes an amount for damages and the damages are paid within 21 days of the date of the order, interest on the damages is not payable unless the court otherwise orders; and

(b)           if the money order includes an amount for costs and the costs are paid within 21 days after assessment, interest on the costs is not payable unless the court otherwise orders

Background

On 10 November 2017, the applicant applied for a stay of enforcement of the judgement. Resisting the application, the respondent and its solicitors gave an undertaking that all moneys recovered from the applicant would be held on trust for the respondent pending further order of the court.

The Court of Appeal dismissed the application for stay and the applicant delivered a bank cheque in the amount of the judgement to the respondent’s solicitors.

Money order debt still payable?

Considering whether the debt was still payable, his Honour stated:

[32] The basis for the respondent’s contention is that because the amount has been paid into the account pursuant to the undertaking, to be held on trust until further order, the money order has not been satisfied and the money order debt remains payable. …

[34] Against that, the applicant submits that the respondent was not ordered to pay the money into a trust account – it voluntarily undertook to do so as part of its defence to the application for a stay. Second, the applicant submits that it would be inconsistent with the basis on which the respondent gave the undertaking for it to be entitled to enforce the judgment notwithstanding that the applicant has paid the full amount to the respondent’s solicitors. …

[38] The text of s 59 Civil Proceedings Act 2011 (Qld) is set out above. It does not provide expressly when interest ceases to run. However, by providing that interest is payable on the “money order debt”, it picks up the meaning of the defined term that the money order debt is the “amount payable”. When the amount is paid, no money order debt remains on which interest is payable.

Jackson J referred to Anthony v Tasmanian Alkaloids Pty Ltd (No 2)[23] where Blow J stated, where an order was made that execution on the judgement be stayed:

[7] … no order was made or sought as to what was to become of the invested monies following the determination of the appeal to the Full Court, nor as to the rights of the parties in respect of interest. The judgment debt remained owing to the plaintiff. The fact that an order had been made temporarily preventing execution, and the fact that sums sufficient to satisfy the judgment had been invested pursuant to an order intended to operate temporarily, did not extinguish the judgment debt. …

In the present case, his Honour continued, concluding:

[56] … neither the text, context, nor purpose of s 59(2) requires the conclusion that, on the section’s proper construction, the payment made by the applicant in those circumstances had the effect that there is no amount of money payable under the money order comprised in the judgment from the payment of the bank cheque, whether that was on the date it was tendered or the date on which the cheque’s proceeds were (or ought to have been) received into the respondent’s solicitors’ trust account.

Applicable interest rate

In relation to the rate at which interest was payable, his Honour stated:

[67] In the present case, no evidence was tendered by either party as relevant to the application to vary the post-judgment interest rate. No evidence was tendered by the respondent that its loss is greater than the 3.5 percent rate I awarded for pre-judgment interest. But also no evidence was tendered by the applicant as to the interest rates that are available for investment of $US sums on the LIBOR.

[69] Recognising the shortcomings of the evidentiary basis, but in the exercise of “a broad discretion to be exercised on common sense lines”,[35] I conclude that I should award a rate of interest determined by reference to the pre-judgment rate I adopted in my earlier judgment but increased by 1 percent. I adopt that increase to reflect a higher rate of interest for post-judgment interest as fixed by the practice direction, but reduce the margin from 2 percent to 1 percent to recognise that the applicant does not have the benefit of retaining the amount of the judgment because of the payment made to the respondent’s solicitors to be held on trust pending the outcome of the appeal.

David Cormack – Brisbane Barrister & Mediator

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