Geoffrey Carton-Kelly v Darty Holdings SAS

Pre-judgment interest normally runs from accrual of the cause of action because it compensates for being kept out of money. The court may depart from that starting point where delay by those responsible for pursuing the claim makes it unjust to award interest for the whole period. A change of office holder does not erase earlier culpable delay, but the adjustment may be made by reducing the rate rather than eliminating interest. Post-judgment interest is ordinarily the statutory 8% rate. The court may defer the date from which that rate runs under CPR 40.8, but has no power simply to substitute a lower rate for the interim period.

The ruling concerned consequential matters following judgment for £89,569,624 in proceedings brought by the liquidator of CGL Realisations Limited against Darty Holdings SAS. The parties disputed the period and rate of pre-judgment interest, the applicable post-judgment interest where the judgment sum was paid into court, permission to appeal, and an extension of time for filing the appeal.

The central issues were whether delay by former liquidators justified restricting pre-judgment interest, whether payment into court justified a lower post-judgment rate, and whether Darty’s proposed appeal grounds had a real prospect of success or raised sufficiently important issues.

1. Pre-judgment interest. Under section 35A of the Senior Courts Act 1981, the court has a discretion to award simple interest for all or part of the period between accrual and judgment. The normal starting point is accrual of the cause of action, reflecting compensation for the claimant being kept out of money.
2. Unreasonable delay by those responsible for prosecuting a claim may justify withholding interest for part of the period or reducing the rate. The relevant responsibility was that of the liquidators in office collectively. The appointment of a new liquidator did not wipe out earlier delay, although the new office holder was personally free from criticism. The appropriate adjustment was interest at 1% from the commencement of the administration until the appointment of Mr Carton-Kelly, and 2% thereafter until judgment.
3. Post-judgment interest. The court had no power to award a different rate between judgment and a later date. Under the Judgments Act and CPR 40.8, it could defer the date from which the statutory 8% rate ran. A lower interim rate would require an undertaking or condition capable of filling the resulting gap. Payment into court and concerns about repayment did not provide a sufficiently good reason to depart from 8%, which was awarded.
4. Permission and extension. Permission to appeal was refused on ground 2. Permission was granted on tightened versions of grounds 1 and 3, excluding challenges to specified factual findings, the contingent-liability argument, and alleged procedural irregularity. A 10-day extension was granted, until 12 January.

The judgment itself records that Darty sought permission to appeal from the underlying judgment. Permission was refused on ground 2 and granted, in tightened form, on grounds 1 and 3. No citation for the underlying judgment is stated.