Interest turns a stale judgment into one worth enforcing. The National Court Rules 1983 deal with it in three places.
Order 12 Rule 6
(1) Where the Court directs the entry of judgement for the payment of money and makes an order for the payment of interest under the Judicial Proceedings (Interest on Debts and Damages) Act 1962, interest shall, unless the order otherwise provides, be payable on so much only of the money as is from time to time unpaid.
(2) The rate of interest for the purposes of Sub-rule (1) is 8% yearly.
Interest runs on the declining balance. Part payments reduce the sum on which interest is calculated. A judgment debtor who pays something is better off than one who pays nothing.
The rate is 8% yearly, fixed by the Rules themselves.
The order may provide otherwise. Sub-rule (1) operates “unless the order otherwise provides”, so a different basis may be ordered or agreed.
The Judicial Proceedings (Interest on Debts and Damages) Act 1962 is not available on PacLII at the time of writing. The 8% rate stated above is fixed by Order 12 Rule 6(2) of the National Court Rules. Check the current text of the Act for the substantive power to award interest and any amendment to it.
Order 12 Rule 27(2)
Where a claim for a liquidated demand includes interest at an unspecified rate, interest accruing after the date of filing the statement of claim to the date of entry of judgement shall, for the purposes of judgment under the default judgment Division, be reckoned at the rate of 8% yearly.
Eight per cent appears three times in the Rules: here, in Order 12 Rule 6(2), and in Order 4 Rule 10(2) — where a defendant pays out a liquidated demand with costs before defending, interest is payable from the date of the claim until payment at the rate specified in the claim or, if no rate is specified, at the rate of 8% yearly.
Two other 8% provisions are worth noting: Order 8 Rule 81(5) allows interest not exceeding 8% yearly against a person who fails to pay money secured into Court; and Order 14 Rule 21(2) allows the Court to charge a defaulting receiver with interest at 5% yearly.
Plead it, and ask for it
Rule 6(1) operates where the Court makes an order for the payment of interest. No order, no interest. So it must be claimed and asked for.
Claim it in the statement of claim and in the relief sought on the writ endorsement. On a default judgment this matters twice over: under Order 12 Rule 27(1), judgment may be entered for a sum not exceeding the sum claimed in the statement of claim, and Rule 27(2) supplies the 8% rate only where the claim includes interest at an unspecified rate.
Where a contract specifies a rate, plead the contractual rate and the clause. Where it does not, claim interest generally and rely on the statutory power.
Pre-judgment interest compensates for being kept out of the money between the cause of action and judgment. It is a matter for the Court’s discretion under the Judicial Proceedings (Interest on Debts and Damages) Act, and must be claimed.
Post-judgment interest runs on the judgment sum until payment, on the declining balance, under Order 12 Rule 6.
On an assessment of damages, ask for both. And remember Order 10 Rule 19: where the cause of action is continuing or the breaches recurring, damages shall be assessed down to the time of assessment, which is a separate route to compensation for delay.
When interest starts
| Question | Answer |
|---|---|
| Judgment entered on a direction of the Court | Takes effect as of the date of the direction — O 12 r 3(1) |
| Judgment entered otherwise | Takes effect as of the date of entry — O 12 r 3(2) |
| Court orders a different date of effect | Permitted — O 12 r 3(4) |
| Time to comply with a money judgment | 14 days after service of the minute, unless otherwise ordered — O 12 r 4(2), (3) |
| Interest on a default judgment for a liquidated demand | From the date of filing the statement of claim to entry, at 8% — O 12 r 27(2) |
The 14-day compliance period runs from service of the minute, not from judgment. A judgment creditor who wants to enforce — and to stop interest accumulating on an unpaid sum being the debtor’s problem rather than their own — should obtain a sealed minute and serve it promptly. See obtaining a copy of a judgment.
A different position
A judgment against the State is not enforced under Order 13. The Claims By and Against the State Act 1996 provides that there is no execution against the State, and satisfaction follows a statutory certificate process.
That has consequences for interest, because payment may be considerably delayed through no fault of the judgment creditor. Ask for interest expressly, and see how a judgment against the State is paid.
- Claim interest in the pleading and the prayer, specifying a contractual rate if there is one.
- Ask for it when judgment is given — and check the minute records it. If it was ordered but omitted, that is a slip correctable at any time under Order 8 Rule 59.
- Calculate on the declining balance, crediting payments as made.
- Keep a running calculation for enforcement, since the sum recoverable changes daily.
Sources
- National Court Rules 1983 — O 4 rr 9, 10; O 8 rr 59, 81; O 10 r 19; O 12 rr 3, 4, 6, 27; O 13; O 14 r 21
- Judicial Proceedings (Interest on Debts and Damages) Act 1962 — not available on PacLII
- Claims By and Against the State Act 1996 — ss 13, 14
Before relying on anything here, read the current text of the National Court Rules 1983 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.