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Victoria Street Apartments Limited (In Liquidation) v Treasury Technology Distribution Limited & Ors

Unreported High Court judgment of Duffy J delivered on 15 December 2011 CIV-2009-404-008377

This decision considers whether the awards of interest on payments to be made on account of breaches of trust should be ordinary or compounding. 

Many of the claims related to recovery of funds and were restitutionary in nature (rather than based on accessory liability for equitable fraud).  Where that was the case the ability to recover the funds is based on principles of subrogation (rather than equitable fraud) and as such an award of compounding interest is precluded.

However, where the claims related to breach of trust, compound interest could be awarded if the trustee in breach had enjoyed some benefit or profit from the breach.  As that was not the case here, the award was limited to simple interest.  That said, as the date interest was to be paid from dated back to the first point at which the funds were wrongly applied, the interest on the judgment amount of more that $429,000 still amounted to in excess of $256,000.

See further at the compounding cost of breach.

 

 

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