Peter A Clarke

Prolonged delay between issue and hearing on a damages/liquidated sum claim often means a significant interest component in a final award for a successful plaintiff. That can be the subject of a significant argument and separate determination, as the Court of Appeal did in Giller v Procopets (No 2) [2009] VSCA 72 and, a case I was and remain involved in, Walker & Anor v Hamm & Ors (No 2) [2009] VSC 290. Both decisions carefully and clearly set out the applicable principles associated with the award of interest and when delay or other factors justify adjusting the period of time over which interest should be calculated and/or varying the rate.

In Kalenik v Apostolidis & Ors (No 2) Hargrave J again considered those principle. The default position is

“..interest ‘must’ be ordered for the whole of the period after the issue of the writ unless ‘good cause is shown to the contrary’. The judgment debtor has the onus of establishing good cause to the contrary. That onus may be satisfied if it is established that allowing interest for the whole of the period since the issue of the writ will cause some injustice to the defendant. …delay may be a relevant discretionary factor.” (see par 12)

In analysing the authorities Hargraves J highlighted relevant factors:

• the exercise of the discretion is not to penalise the Plaintiff but alleviate the Defendant. The defendant needs to show disadvantage; there needs to be “collateral effects of the delay” which caused disadvantage (par 13)
• delay is only relevant in rare cases because in practice the defendants have had use of the money (par 17)
• if the defendant acquiesces/does not object to the cause for the delay, such as taking a matter out of the list, that may work against the exercise of discretion(par 19)

Hargrave J pithily summarised the principles as:

Nor does the defendant rely upon prejudice arising from delay by the plaintiff while very serious allegations have been hanging over his head for many years. This kind of prejudice could be relevant in a case where there is unreasonable delay by a plaintiff who, although successful at trial, fails to establish one or more serious allegations maintained for a long time; for example, fraud or other criminal activity…..(par 64)

In addition to not showing prejudice the Defendant used the money to grow his overall assets. Another relevant factor was that the Plaintiff’s impecuniosity which hampered the prosecution of the claim was attributable to the Defendant’s conduct (par 64). The discovery dispute was a saga in itself, and ultimately one where the defendant was shown to be less than forthcoming. These factors overrode other issues of delay, such as change of solicitors.

Interest

The Defendant’s attempts to apply a rate less than that of the penalty interest rate was unsuccessful. One issue the Court highlighted was the Defendant failing to make any attempt to compromise the claim. Rather he challenged any form of contribution by the Plaintiff. The Court found he was wrong to do so ((par 85) . The court was less than impressed by the argument that the cash rate was the appropriate measure.

Issues

A Defendant wishing to rely on delay in adjusting the period in which interest is calculated or the rate needs to provide evidence of prejudice. Evidence of steps taken to prosecute the claim, that is not acquiescing to the delay (a normal enough reaction by a Defendant) would also assist. As a matter of practicality Hargraves J was less than enthused by the length of the submissions and associated documents in support (par 31) . Know thy bench- the 11th commandment.