While interest up to judgment is often the subject of agreement, particularly after some judicial encouragement, a range of issues may and do arise. In more complicated situations, particularly where statutory limitations might apply, it is often the better course to receive submissions on interest after the resolution of the principal issues.

Whilst statutory limitations must be complied with it remains the position that “the award of interest should always be approached in a broad and practical way [and] should not be allowed to assume disproportionate importance…”: Cullen v Trappell (1980) 146 CLR 1 at 22. However, for a case requiring detailed consideration of issues relating to interest up to judgment, see Gadens Lawyers Sydney Pty Ltd v Symond (2015) 89 NSWLR 60 at [167]–[186].

Interest after judgment, other than interest on costs, is not, usually at least, an issue for first instances judges and is not, itself, an amount for which judgment is given: Najdovski v Crnojlovic (No 2) [2008] NSWCA 281.

Section 100 of the CPA provides that in proceedings for the recovery of money, including any debt or damages or the value of any goods, the court may include interest in the amount for which judgment is given at such rate as the court sees fit: s 100(1). The interest may be awarded on the whole or any part of the money and for the whole or any part of the period from the time the cause of action arose until the time the judgment takes effect. As to the expression “proceedings for the recovery of money” see Lahoud v Lahoud [2011] NSWCA 405 at [37]–[45].

Section 100(2) makes similar provision for the situation where, in proceedings for the recovery of a debt or damages, payment of the whole or part of the debt or damages has been made after the proceedings commenced but before or without judgment.

Section 100(3) provides that s 100 does not authorise the giving of interest on interest (s 100(3)(a)), the giving of interest on a debt when interest is payable as a right (s 100(3)(b)) or the giving of interest on proceedings for amounts less than a prescribed amount (s 100(3)(c)). Section 100 does not affect the damages recoverable for the dishonour of a Bill of Exchange (s 100(3)(d)).

Section 100(4) provides that in any proceedings for damages, the court may not order the payment of interest under the section in respect of the period for which an appropriate settlement sum was offered (or first offered) by the defendant unless the special circumstances of the case warrant the making of such an order.

Appropriate settlement sum means a sum offered in settlement of proceedings in which the amount for which judgment is given, including interest up to and including the date of the offer, does not exceed the sum offered by more than 10 per cent: s 100(5).

See also Practice Note No SC Gen 16 “Pre-judgment interest rates” and Practice Note DC (Civil) 15 “Pre-judgment interest rates”.

The power to award interest is a discretionary one. For applicable principles see Ritchie’s [s 100.10]–[100.95], Thomson Reuters [CPA.100.30]–[CPA.100.100]. For an example of the application of these principles to both before and after interest, see Maestrale v Aspite (No 2) [2014] NSWCA 302.

There are a number of legislative provisions, including the CPA itself, which impose limitations or restrictions on the interest which may be awarded.

A plaintiff has only such right to interest on damages payable in relation to a motor vehicle accident as is conferred by s 137.

That section excludes any entitlement to interest on those components of an award calculated under s 141B (dealing with attendant care services) and any amount for non-economic loss: s 137(2), (3).

Other damages payable in relation to a motor accident are subject to the following provision: s 137(4):

The amount of interest is to be calculated for the period from when the loss to which the damages relate was first incurred until the date on which the court determines the damages: s 137(5)(a). It is to be calculated in accordance with the principles ordinarily applied by the court for that purpose subject to the section: s 137(5)(b). The rate of interest is to be three quarters of the rate prescribed for the purposes of s 101 of the CPA: s 137(6).

Nothing in s 137 affects the payment of interest on a judgment or order of the court: s 137(1).

Despite earlier views, the award of interest, once the provisions of s 137(4) are satisfied, remains discretionary in accordance with principles applicable with respect to s 100 of the CPA: Najdovski v Crnojlovic (No 2) [2008] NSWCA 281 at [11].

For a discussion on a number of potential issues arising from the language of s 137(4) see Najdovski at [12]–[25].

On the issue of reasonableness, Basten JA at [26] said that it should be accepted that:

See [7-1060] as to the applicability of s 18(1)(c) of the Civil Liability Act 2002.

A claimant has only such right to interest on damages payable in relation to a motor vehicle accident as is conferred by s 4.16.

No interest is payable on damages awarded for non-economic loss: s 4.16(2).

Other damages payable in relation to a motor accident are subject to s 4.16(3):

The amount of interest is to be calculated for the period from when the loss to which the damages relate was first incurred until the date on which the damages are awarded: s 4.16(4)(a). It is to be calculated in accordance with the principles ordinarily applied by a court for that purpose, subject to the section: s 4.16(4)(b). The rate of interest to be three-quarters of the rate prescribed for the purposes of CPA s 101: s 4.16(5).

Nothing in s 4.16 affects the payment of interest on a judgment or order of a court: s 4.16(6).

The discussion in [7-1040] as to discretion and issues arising under s 137(4) of the Motor Accidents Compensation Act 1999 apply to the similar, although not identical, terms of s 4.16.

See [7-1060] as to the applicability of s 18(1)(c) of the Civil Liability Act 2002.

A plaintiff has only such right to interest on damages as is conferred by s 151M: s 151M(1).

Section 151M(4)–(7) adopts the same language and scheme as s 137(4)–(7) of the Motor Accidents Compensation Act 1999, except that s 137(4)(a)(iii), referring to a third party policy and the Nominal Defendant, is omitted.

While s 151M does not exclude interest on damages payable in respect of attendant care service or for non-economic loss, the schemes should otherwise be dealt with in the same way.

For an example of the application of s 151M, see State of NSW v Skinner [2022] NSWCA 9 at [132]–[154] where it was held the respondent was not entitled to pre-judgment interest as, inter alia, the appellant was entitled to have regard to the fact that there was an unresolved issue as to whether the case could proceed at all, having been commenced out of time, and the likelihood of any liability being established.

With respect to cases to which this Act applies, a court cannot order the payment of interest on damages awarded for non-economic loss (s 18(1)(a)), gratuitous attendant care services with some exceptions (s 18(1)(b)), or the loss of capacity to provide gratuitous services to dependants (s 18(1)(c)).

The provision that interest cannot be paid on damages awarded for the loss of capacity to provide gratuitous services to dependants applies to motor accidents: s 3B(2).

If interest is to be awarded, the amount of interest is to be calculated for the period from when the loss first occurred until the date when the court determines the damages: s 18(2)(a). It is to be calculated in accordance with the principles ordinarily applied by the court for that purpose (s 18(2)(b)). The interest rate is to be as provided by s 18(3), (4).

Section 101 provides for interest after judgment including interest on costs. Interest on costs is payable unless the court otherwise orders: s 101(4).

For a discussion of relevant issues see, Ritchie’s [s 101.5]–[s 101.30], Thomson Reuters [CPA101.20]–[CPA 101.50], Zepinic v Chateau Constructions (Australia) Ltd (No 2) [2013] NSWCA 227 at [82]–[88], (just as a costs order must be sought at the time of judgment, or within any time limited by UCPR 36.16, so, too, must an interest on costs order); Grills v Leighton Contractors Pty Ltd (No 2) [2015] NSWCA 348; Grima v RFI (Aust) Pty Ltd [2015] NSWSC 332 (time from when interest should be paid) and Tjiong v Tjiong (No 2) [2018] NSWSC 1981 at [164] (an application for an award of interest on costs must be made, if the order proceeds to assessment, before the assessment is undertaken).

Rates of interest are prescribed for interest after judgement: UCPR r 36.7. However, there is no such rate for interest up to judgment. The rates in r 36.7 will usually be accepted as appropriate without evidence: Hexiva Pty Ltd v Lederer (No 2) [2007] NSWSC 49 at [9]. However, a party contending that the rate should be different is entitled to do so but will need, generally at least, to produce evidence in support of such a rate. “The plaintiff’s loss and its quantum are to be found as a fact and assessed on the evidence…”: Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358. In undertaking this task it will generally be appropriate for the court to have regard to prevailing market rates.

An accepted method of calculating the interest on damages accruing progressively over a period of time is to halve the rate of interest, the period or the principal amount: Cullen v Trappell, as above, Riddle v McPherson (1995) 37 NSWLR 338 at 342 (Motor Accidents Act 1988, s 73(5)(a)).