23 APRIL 2024
KEY QUESTIONS
- Can you get pre-judgment interest after judgment has been delivered?
- What are the principals governing pre-judgment interest?
- When does pre-judgment interest in duress cases commence to accrue?
- Can the slip rule extend to oversights made by a party or is it limited to a judge’s intention?
WANG V YU (NO 3) [2024] NSW SC 190
In the recent decision of Wang v Yu (No 3) [2024] NSW SC 190[1] (the interest decision), the Honourable Meek J gave an ex tempore judgment revising his decision in Wang v Yu [2023] NSWSC 1182[2] (the principal decision).
The plaintiff in the proceedings was Dr. Lu Wang (Dr Wang). Kammoun Sukari Lawyers acted for the defendants in the proceedings, Mr Jiayi Yu (Mr Yu), STYU Pty Ltd (STYU) and Auslon Property Group Pty Ltd (APG). Kammoun Sukari Lawyers also acted for Mr Yu in the cross-proceedings which he brought against Dr Wang and Song Allen Yang (Mr Yang). The defendants were ultimately successful in defending against Dr Wang’s claim and Mr Yu was successful in his cross-claim against Dr Wang and Song Allen Yang.
Kammoun Sukari Lawyers acted for Mr Yu in the interest decision in bringing an application (by way of Notice of Motion) seeking orders for the variation of the judgment in the principal decision to include pre-judgment interest which was inadverdently ommitted at first instance due to an oversight.
BACKGROUND: THE PRINCIPAL PROCEEDINGS
You can read our article summarising the principal decision here.
On 5 October 2023, the Court made findings in the principal decision in favour of Mr Yu on his cross-claim against each of Dr Wang in the sum of $200,000 and Mr Yang in the sum of $10,000. His Honour Meek J delivered the principal decision and requested the parties to prepare orders to give effect to the findings in the proceedings and the cross-claim, as well as costs. Notably, Mr Yu’s cross-claim, filed 15 April 2021, sought judgment against the cross-defendants in the sum of $210,000 and interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW). Due to an oversight, Mr Yu’s short minutes of order dated 23 November 2023, 15 December 2023 and 20 December 2023 did not seek pre-judgment interest against Dr Wang and Mr Yang in respect of the judgment amounts against them. On 17 January 2024, the Court delivered reasons for judgment and made final orders dealing with the substantive claims for relief in the principal decision, including orders in favour of Mr Yu against Dr Wang for $200,000 and Mr Yang for $10,000 (the costs decision).[3] The final orders in the costs decision did not include an order in favour of Mr Yu for pre-judgment interest as it was not sought.
ORDER SOUGHT PURSUANT TO R 36.17 OF THE UCPR
Mr Yu’s application was filed on 23 February 2024 and sought an order pursuant to r 36.17 of the UCPR to vary the orders made in the costs decision to include pre-judgment interest. The variation was only sought in respect of Order 2 of the orders being the judgment against Dr Wang to include interest in the sum of $84,542.14 or alternatively interest in the sum of $29,583.66 on the judgment amount.
INTERPRETATION AND APPLICATION OF THE SLIP RULE
The interest decision provides an insight into how the Court applies the slip rule—r 36.17 of the Uniform Civil Procedure Rules 2005 (NSW) (the UCPR)—which provides:
If there is a clerical mistake, or an error arising from an accidental slip or omission, in a judgment or order, or in a certificate, the court, on the application of any party or of its own motion, may, at any time, correct the mistake or error.
Meek J confirmed that the application of the slip rule is not confined to situations giving effect to the intention of the judge at the time that the Court’s order was made or judgment was given but extends to permit the correction of an order where the omission was the result of the inadvertence of a party’s legal representatives and specifically, to situations where there is an application to vary orders to include pre-judgment interest in the judgment.
THE APPLICATION FOR INTEREST
Meek J observed that the general approach of the Court in construing the discretionary power to award interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW) indicates that the circumstances in which an award of interest may be refused are ‘rare and “almost invariably” interest is allowed when claimed’‘.
The Court accepted that the omission to seek interest at the hearing on 20 December 2023 was due to an oversight, namely an inadvertence on the part of Mr Yu’s solicitor and counsel, and that it constituted a ‘clerical mistake or an error arising from an accidental slip or omission’ within the meaning of the slip rule. The Court was also satisfied that an application would have been made for pre-judgment interest on the sum of $200,000 at the time of the making of the orders on 20 December 2023.
The Court then turned its mind as to whether there were any factors mitigating against a claim for interest. It was determined that due to the relatively short period of time following judgment that the inadvertence was discovered and subsequently brought to the attention of the Court, Mr Yu was not disentitled from claiming or seeking pre-judgment interest.
Notably, an issue in the interest decision was what the appropriate date or dates from which pre-judgment interest was to be calculated from. Mr Yu submitted that:
- Given the proceedings involved a case of economic duress, the cause of action arises as at the time that the money is advanced as opposed to a later point in time (including when an election was made to avoid the conduct constituting the duress) and therefore, interest should be calculated from the dates when Mr Yu gave money to Dr Wang; or
- Alternatively, interest should commence from the date that Mr Yu avoided the Deed, the calculation of which would be in the sum of $29,584.66.
Consistent with Mr Yu’s submissions, the Court found that the appropriate time to award interest in a case of economic duress is from the time that monies are paid. Accordingly, the Court determined that interest is payable on the amount recoverable at the time that the amounts were advanced by Mr Yu under the operative duress, arriving at an amount of interest in the sum of $84,470.12.
Ultimately, the Court ordered that the order made on 20 December 2023 in the costs decision as to the judgment in favour of Mr Yu against Dr Wang be varied to include pre-judgment interest.
KEY TAKEAWAYS
The interest decision demonstrates that the Court generally adopts a flexible interpretation and application of the slip rule, especially in the context of an application for pre-judgment interest that was inadvertently not sought at first instance.
The interest decision further confirms that the slip rule is not limited to situations giving effect to the intention of the judge at the time that the Court’s order was made or judgment was given but extends to permit the correction of an order where the omission was the result of the inadvertence of a party’s legal representatives.
RELEVANT LINKS
- The interest decision can be accessed on New South Wales Caselaw using the following link: https://www.caselaw.nsw.gov.au/decision/18df6f005c96a218559736ed.
[1] Wang v Yu (No 3) [2024] NSWSC 190 (29 February 2024).
[2] Wang v Yu [2023] NSWSC 1182 (5 October 2023).
[3] Wang v Yu (No 2) [2024] NSWSC 4 (17 January 2024).