McBride v Christie’s Australia Pty Limited (No 3)

Judgment in this matter was delivered on 4 December 2014: McBride v Christie’s Australia Pty Ltd [2014] NSWSC 1729 (the Judgment). Judgment dealing with final orders, costs and interest consequent upon the Judgment in this matter was delivered on 16 June 2015: McBride v Christie’s Australia Pty Limited (No 2) [2015] NSWSC 754 (the Costs Judgment).

On 3 July 2015 the plaintiff’s solicitors wrote to my Associate asking that the matter be relisted and that it “concerned” Ms Sharpe and therefore it would not be necessary for the other defendants to attend. In response to a request to inform the court of the nature of the application, the solicitors advised on the same day that the relisting was in connection with the question of pre-judgment interest on the $42,000 that Ms Sharpe was ordered to pay the plaintiff in respect of the Smart claim referred to in the Judgment at paragraphs [423] to [444] and in the Costs Judgment at paragraphs [131] to [139].

The matter has been listed today. Mr Douglas QC leading Mr N Owens, of counsel, appear for the plaintiff and Ms G Noe, solicitor, appears for Ms Sharpe.

Although not the subject of any written submissions in chief or any oral submissions in chief or in reply by the plaintiff at the conclusion of the trial, the Short Minutes of Order attached to the plaintiff’s written submissions included a claim for pre-judgment interest on $42,000 of $15,187.90. This claim was not dealt with in the Costs Judgment. The plaintiff asks the Court to decide this claim notwithstanding that the other orders have been entered. I am satisfied that the matter should be dealt with either pursuant to Rule 36.17 of the Uniform Civil Procedure Rules 2005 or the inherent jurisdiction of the Court as reflected in the Slip Rule: L Shaddock & Associates Pty Ltd v The Council of the City of Parramatta [No 2] (1982) 151 CLR 590.

Ms Sharpe made submissions both in writing and orally at the conclusion of the trial that pre-judgment interest on $42,000 should not be awarded because she had offered to pay the $42,000 to the plaintiff well before the proceedings were instituted on 28 June 2012. It was submitted that the result obtained by the plaintiffs was no better than the offer of $42,000 and the plaintiff failed outright in her claim for a higher amount. The plaintiff filed written submissions in response to that submission in which it was contended that she should be entitled to pre-judgment interest because the offer made by Ms Sharpe was not bettered at trial.

Ms Sharpe’s solicitors’ letter of 28 June 2012 referred to in the Costs Judgment at paragraph [136] included the following:

Ms Sharpe pointed out in final oral submissions that this was not just the $42,000 for the Smart but also $5,720 for two other artworks. It was submitted that this was prior to any litigation and accordingly Court interest rates did not come into play. It was submitted that even if such interest rates did come into play the interest on $42,000 to 28 June 2012 would be $7,250 about $1,500 more than the total of $42,000 plus the $5,720.

The plaintiff’s attempt to obtain a greater sum in respect of the Smart claim appeared to be the only real impediment to the acceptance of the $42,000 that had been offered at the beginning of the trial. That attempt failed.

The plaintiff had been offered $47,720 in June 2012 only two years after the auction in 2010 and well before the litigation was commenced in February 2013.

The exercise of the discretion in relation to an award of interest is separate and distinct from the award of costs where offers have been made.

Having regard to the matters outlined in paragraphs [423] to [444] of the Judgment and paragraphs [131] to [139] of the Costs Judgment and the matters mentioned above I am satisfied that the just outcome in this instance is to refuse to award of pre-judgment interest on the $42,000 awarded in respect of the Smart claim.

The plaintiff’s application for pre-judgment interest on the $42,000 awarded in respect of the Smart claim is refused.