61 1982 31 sasr 1 wheeler was a tort case in south

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Unformatted text preview: loss for purposes of recovery in litigation, but noted that it seemed wrong for a court to base compensation interest rates on the real rate of interest,62 for in times of negative real interest rates, it would be wrong to refuse to award a plaintiff interest, and plaintiff who receives interest as a real-life investor also must pay income tax on that interest, where the court's interest award is tax-free.63 M.B.P. v Gogic was affirmed by the High Court again in Andjelic v Marsland,64 (1996) where the court was called upon to determine whether the 'full' interest rate should apply to pre-trial non-economic losses. In bowing to statutory intervention, the court limited the rule in Hungerfords by affirming the judgment of Brennan and Deane JJ.65 in that case. The Court took a narrow view of Hungerfords in that it maintained that there was a strict difference between an award for the loss of the use of money which was paid away as a result of the defendant's wrongful conduct, and "the power of a common law court to award a payment of interest to compensate for the delay in obtaining payment of what the court determines to be the appropriate measure of damages in tort or for breach of contract."66 This distinction appears to have little meaningful difference, and highlights the difficulties in seeking to establish recognition of the concept of opportunity cost in the common law. 61 (1982) 31 S.A.S.R. 1. Wheeler was a tort case in South Australia which set an interest rate of 4 % on past non-economic loss for purposes of recovery. 62 This is defined to m ean an interest rate after incorporating an inflationary factor consistent with financial theory. 63 [1990-1991] 171 C.L.R. 657 at 666. 54 (1996)70A.L.J.R435. 65 (1989) 171 C.L.R. 125 at 152. 66 (1996) 70 A.L.J.R. 435 at 443. 333 In Nominal Defendant v Gardikiotis67 ( 1996) the High Court refused to uphold an award for the additional cost to a plaintiff in managing the sum of her award in a personal injur payout. Invoking the once-for-all-time attitude of common law damages awards, their Honours asserted that the opportunity costs to the plaintiff of the additional sums paid to money-managers was beyond the role of the court. "To the inadequate extent that monetary compensation can compensate for the effects of personal injury, a court has done its duty when it makes its award of damages. What the plaintiff does with the verdict moneys is a matter entirely for the plaintiff."68 In this respect, the court was differentiating between the opportunity cost incurred as a result of damage inflicted by the defendant, and the opportunity cost inflicted simply because the plaintiff now has compensation in money form. The former, by implication, may be recoverable, and the latter, expressly, is prohibited. In SCI Operations v Commonwealth of Australia69 (1996), involving two companies, SCI and ACI, as plaintiffs70, the majority of the Federal Court (Beaumont and Einfeld JJ., Sackville J. dissenting) ordered interest be paid upon the refund sum due to the taxpayers, despite the fact that evidence was led that the taxpayers had already passed on the amount of the burden of tax to purchasers/The implication was that no opportunity cost had been borne by the taxpayer plaintiffs. The court wished to illumine the fact that the taxpayer had suffered for seven years by waiting for the Comptroller-General of Customs to issue a Commercial Tariff Concession Order under s. 269C(1) of the Customs Act 1901 (Cth), an intolerable period. The court took the stance that "the court 67 (1996)70A.LJ.R.450. 3. , (1996) 70 A.L.J.R 450 at 456; also see Todorovic v Waller (1981) 150 C.L.R. 402 at 412 covered m the section regarding the applicable rules. 69 (1996) 139 A.L.R. 595. . 70 T wo cases were heard together involving the same point in law against the same statutory authority giving rise to the amalgamation of the cases. 68 334 should not at all embrace a situation where the Crown, as the model litigant, should be seen to take advantage of its own default".71 On appeal, the High Court of Australia reversed the decision, holding that the plaintiff SCI was not entitled to the claimed opportunity cost (as interest), but only held this position from a narrow statutory interpretation of the plaintiffs specific right to claim back money paid to the customs department.72 The Commonwealth was therefore able to take an advantage from its own delay. In contrast, the Federal Court refused to allow an insurance company to take advantage of its own delay in Mowie Fisheries Pty. Ltd. v Switzerland Insurance Australia Ltd. (1996) where an insurance company delayed settlement of a claim on a lost fishing vessel on technical grounds. Compound interest rates were awarded on an insured sum of $640,000.00. This was done, according to Tamberlin J., to "accurately reflect the applicant's loss". 'Accuracy' as a goal of the court, still eludes a legal theoretical grasp. Inconsistency the reception of evidence with regard to the opportunity cost suffered by a plaintiff and of course, a subsequent rebuttal by a defendant, still sits in an uneasy juxtaposition wi...
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This note was uploaded on 09/03/2012 for the course LAW 1501 taught by Professor Garva during the Three '12 term at University of Adelaide.

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