Judicial Decisions

Court decisions

Civil Mining & Construction Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd (No 3) [2018] QSC 60 (26 March 2018)

This case specifically considered the issue of 67P interest, some of the elements of how it is to be calculated and where it is applicable.

Specific points made in this decision are:

Interest is not payable on the GST component of a claim.(paragraph 113);
His Honour referred to the explanatory notes to the 1999 amendment bill which contained the statement The penalty rate is set at the 90-day bill rate published by the Reserve Bank, plus 10 per cent, calculated daily.(paragraph 138);
His Honour did not adversely comment on the proposition that interest should be calculated daily or indicate that the terms of section 67P itself did not support that proposition;
A Claimant cannot claim both the interest under the contract and 67P interest.(paragraph 141);
Where there has been a part payment interest is payable on the unpaid portion from the date it should have been paid.(paragraph 155);
Interest starts on the day it is due.(paragraph 164);
Interest ceases on the day it is paid.(paragraph 164);
The Claimant is entitled to interest until payment is made.(paragraph 170);
The correct order to award a claimant interest is Interest on $[SUM OF MONEY] pursuant to section 67P of the Queensland Building and Construction Commission Act 1991.

Conclusions arising out of this decision are:

Sections 58 and 59 do not supplant the interest payable pursuant to section 67P when the adjudication decision is converted to a judgment;
The practice of adjudicators setting a single interest rate being 10% plus the 90 day bank bill rate as at the date the money is not the correct way to award 67P interest because because it does not accord with the fact that the interest is to be calculated daily; and
Therefore there must a calculation for each day which implies that the specific rate for each day should be used for the purposes of the calculation.

Given that interest calculated on a single rate is not applicable, the final question is whether the interest is a simple cumulation of the calculations for each day or is it compounding.

The better argument is that the correct calculation is compounding for the following reasons:

Section 14C of the Acts Interpretation Act 1954 establishes the principle that drafting practices at the time of enactment are relevant to the interpretation of the legislation; and
At the time section 67P was enacted, in other legislation where simple interest is intended, it is specified to be simple interest (for an example, when section 67P was inserted in the QBCC Act section 47(3)(a) of the Supreme Court Act 1995 specifically stated that interest was not to compound. That provision has been removed and the court registries now calculate interest on a compound basis.

As to the specific terms of section 67P:

Section 67P specifically states that the interest is to take into account the penalty rate as applying from time to time. If the 90 day bank bill rate changes daily then the penalty rate will change daily. Therefore, the interest calculation has to be made for each day;
Section 67P(2) refers to two separate amounts. There is the progress amount referred to in the first line and the amount referred to in the last line;
Progress amount is defined in section 67P(1)(a) and is the original amount owed. That phrase is used consistently throughout 67P(1) and in the first line of 67P(2);
The amount on which interest is to be calculated is not the progress amount but the amount;
The amount is not defined elsewhere;
While the written statement is inelegant and clumsy, the draftsman’s clear intention was to provide for interest that compounded daily because:
It refers to the daily interest rates by referring to the interest rate as it applies from time to time;
There is no reference to simple interest;
After interest has been calculated for the first day and any day thereafter, the only difference possible between progress amount and the amount would be the progress amount plus interest to arrive at the amount on which interest is to be calculated again; and
That amounts to interest compounded daily.

For those who are curious as to how much interest was actually paid, we do not publish information entered into the system without consent (which has not been sought).

However, as an example, if it is assumed that the defendant paid the amounts due on the 21st day after the date of judgment, the following table sets out the relevant calculations.

Claim	Amount	67P Interest
Earthworks Claim	$1,549,509.00	$1,416,812.35
Piling Claim	$262,575.00	$240,088.64
Bebo Arch Claim	$822,479.75	$752,044.34
Environmental Management Claim	$69,746.05	$63,773.15
Geolon 600 Claim	$219,018.00	$200,261.77
Total	$2,923,327.8	$2,672,980.25

If we make the same assumptions and use the rates in the court's interest calculator:

Claim	Amount	Pre-Judgment	Post-Judgment
Earthworks Claim	$1,549,509.00	$513,465.92	$7,323.02
Piling Claim	$262,575.00	$86,938.40	$1,240.94
Bebo Arch Claim	$822,479.75	$272,322.52	$3,887.06
Environmental Management Claim	$69,746.05	$23,092.88	$329.62
Geolon 600 Claim	$219,018.00	$72,516.71	$1,035.09
	Sub-Total	$968,336.43	$13,815.73
		Total interest	$982,152.16

Hansen Yuncken Pty Ltd v. Ian James Ericson trading Flea's Concreting & Anor (No 2) [2010] QSC 457 (6 December 2010)

In that matter the subcontractor obtained an order that the builder pay $1,392,000 into court with respect to section 67P interest.

The subcontractor represented himself and the builder was represented by Senior Counsel.

At paragraph 4 of the decision His Honour noted that there was no dispute as to the rates used or the accuracy of the calculation.

However, there is no mention in the decision as to how the interest is calculated.

That material is contained in the subcontractor's affidavit sworn 23 November 2010 that the subcontractor read at the hearing of the application.

Paragraph 9 of that affidavit refers to an interest calculation that is exhibit IE6.

Exhibit IE6 contains an interest calculation produced by the then BICRS web site which was the predecessor to this site.

This site now produces those calculations. The director of BICRS that owns the intellectual property rights to the interest calculator on the BICRS site is also the owner of this web site which produces the same calculation.

You can verify that the calculation is correct by entering the same data to obtain the same interest ($1,042,588-26) accrued to 31 October 2010 referred to in paragraph 4 of the decision. The start date was 13 June 2009. The end date was 31 October 2010. The amount was $4,803,866-60.

If you need any affidavit material in support of the pedigree of this site with respect to its predecessor do not hesitate to contact us.

TDM Constructions Pty Ltd v. Burleigh Views Pty Ltd Number BS 1130/2006

On 8 August 2008 an application for summary judgment was dealt with in the Supreme Court. Chesterman J awarded interest pursuant to section 67P as calculated by this site. The problem is that the defendant did not appear. His Honour did not specifically consider the issues of the relevant interest calculation and did not give a written decision. I did not attend at that hearing so do not treat this as a case report.

TDM Projects Pty Ltd v. Ronbar Enterprises Pty Ltd (BS 6612/2008)

On 15 August 2008 this matter was heard before Daubney J. The defendant consented to orders including payment of interest after initially contesting the issue of service. There was no written decision.

Adjudication decisions

The issue of section 67P interest and the basis on which it should be calculated was fully considered in the decision by John Savage in the matter of McDonald Keen Group Pty Ltd v Barry Edward Ingleton. The matter was fully considered in paragraphs 311 to 318. At paragraph 317 the adjudicator adopted as the correct calculation the calculation provided by the interest calculator that is now provided on this site.