Black & Ors v Davies

By paragraph 1(b) of his Order dated 10 May 2004, after the trial of this action, Mr. Justice Buckley directed that there should be a further hearing “in order to resolve the issue as to whether the interest to be applied in calculating the judgment sum and thereafter to the judgment sum so calculated should be calculated on a simple or a compounding basis”. The order directed that the further hearing should be before Mr. Justice Buckley himself, but I was informed that he has since directed that the issue so formulated may be heard by another judge. Accordingly, the issue has now come before me. I was further informed that it was not desired or required that I should consider the first question, namely the nature of the interest to be applied in calculating the judgment sum itself; the only question for me is whether the interest to be applied to the judgment sum should be calculated upon a simple or compounding basis. Mr. Justice Buckley determined that the rate of interest to be applied was the U.S. Prime Rate. Further, the learned judge gave permission to appeal to the Court of Appeal upon certain matters set out in paragraphs 4 and 5 of his Order. I was told that the Court of Appeal was likely to hear the appeal towards the end of this year.

The facts as found by the learned judge at trial were set out in his judgment handed down on 29 April 2004. It is not necessary for me to recite those facts any further in this judgment beyond the following brief summary. The First Claimant is a resident of Canada who traded (inter alia) copper futures on the London Metal Exchange (“the LME”). The Second Claimant is a company incorporated in Canada of which the First Claimant was the majority shareholder. The Third Claimant was a Panamanian company beneficially owned by the First Claimant. The Defendant was the Chief Executive Officer and a director of Brandeis (Brokers) Limited (“Brandeis”). Brandeis was a broker carrying on business on the LME. From about April 1989 to 1997 the First and Second Claimants used Brandeis as their broker to execute futures transactions on the LME and the Third Claimant also did so from about 1993 to 1997.

Between July and October 1996 the Claimants established very substantial short positions in copper futures in the belief that the price of copper futures would decline in the near future. By the beginning of October 1996 the Claimants had resolved to cover (buy back) their short positions.

The Claimants alleged (and the Court found) that in October and November 1996 the Defendant made certain representations to the Claimants which caused the Claimants to reverse this decision and to maintain and increase the existing short positions. In summary, the Defendant represented to the Claimants that a representative of a major consumer of aluminium known as Alcatel had told the Defendant that Alcatel was going to deliver a further 80,000 tonnes of physical copper into the market in November or December of 1996 (40,000 tonnes in November and 40,000 in December). The judge held that, in reliance on these representations the Claimants maintained and increased their existing short positions rather than covering. The representations were found to be false in that the Defendant had not been in contact with Alcatel and did not have the information that he claimed to have. The market price of copper futures increased in October and November 1996 and the Claimants were obliged to cover their short positions on 15 November 1996, thereby incurring very large losses on those positions.

On crucial points, the learned judge rejected the Defendant’s evidence and held that the claim in the deceit was made out. It is common ground that the judgment sum, when calculated out, will be in the region of U.S. $20 million. It is agreed that the questions falling to be resolved in order to determine the issue (as modified in the manner indicated) are:

The following basic principles of law were accepted by both sides:

In Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669, the House of Lords (by a majority) held that the courts could not award compound interest in aid of a common law claim for restitution, having regard to the fact that Parliament had twice considered what interest should be awarded on claims at common law and had expressly not authorised the award of compound interest. It is accepted by the Claimants before me that, if the claim to compound interest in the present case represents an extension of the jurisdiction already established, then in the light of the decision in their Lordships’ House, such an extension could not be justified. (To this extent, Mr. Mallin for the Claimants retreated in oral submissions from the position taken in his written argument: see paragraph 30 of the argument, dated 7 June 2004.) His submission was that the claim now made fell within the established jurisdiction in equity to award compound interest in cases involving fraud. Mr. Saini for the Defendant submitted that the equitable jurisdiction was more circumscribed; namely, it was a prerequisite of the jurisdiction that there should be a specified fund obtained and retained by fraud and that there should be a “free-standing” equitable claim by the Claimant to that fund.

At the forefront of the argument for the Claimants were two propositions. First, Mr. Mallin emphasised that in his majority speech in the Westdeutsche Landesbank case, Lord Browne-Wilkinson remarked that

“ In the absence of fraud, Courts of equity have never awarded compound interest except against a trustee or other person owing fiduciary duties who is accountable for profits made from his position”: [1996] AC at p.701 and also p.702.”

Thus, it is submitted, fraud cases are a class apart and the power to award compound interest is quite general in such cases. Secondly, it is submitted that equity has jurisdiction to award interest in a common law claim for damages for fraud: see Johnson v R [1904] AC 817.

For my part, I do not consider that either of these propositions take the Claimants home. First, while I accept that Lord Browne-Wilkinson was clearly identifying cases of fraud as part of the equitable jurisdiction to award compound interest, I do not consider that he can be taken, by the two passages cited, to have been deciding that all cases of fraud fell within that jurisdiction. Secondly, I do not think that the dictum from the judgment of the Privy Council (delivered by Lord Macnaghten) in Johnson’s case goes anything like as far as Mr. Mallin contends.

My misgivings about Mr. Mallin’s first proposition does not require further elucidation at this stage, but it is necessary to set out in a little detail the facts of Johnson’s case.

That case involved a claim by the Crown to recover money overpaid by it to a contractor who had undertaken to remove a quantity of granite stones from one place to another in Freetown in Sierra Leone. There was an agreed rate per ton provided for by the contract and the contractor over-charged to the tune of £8029. He was convicted before the criminal courts of having obtained that sum by false pretences and was sentenced to a term of imprisonment. In the civil courts the Crown claimed repayment of the money on two bases, a) in fraud and b) as money paid under a mistake. By his defence, the defendant admitted the overpayment but denied fraud. He refunded the amount of the overpayment by paying the sum into Court. At the trial no evidence was called save for proof of the overpayment and the defendant’s conviction. Interest was claimed. The defence objected that no fraud had been proved. The judge held that the receipt of the money by mistake implied a promise to repay and gave judgment for special damages with interest and costs. Their lordships of the Privy Council concluded that,

“If the Crown intended to rely on fraud as giving a right to interest the case ought to have been stated plainly and proved clearly”.

They accordingly allowed the appeal.

Having reached the principal conclusion, Lord Macnaghten’s opinion on behalf of the Board continued,

“In order to guard against any possible misapprehension of their Lordship’s views, they desire to say that in their opinion, there is no doubt whatever that money obtained by fraud and retained by fraud can be recovered with interest, whether the proceedings be taken in a Court of equity or in a Court of law, or in a Court which has a jurisdiction both equitable and legal, as the Supreme Court of Sierra Leone possesses under the Ordinance of November 10, 1881.

In order to support the decree it was suggested that Johnson, who was a trader, must have made a profit by the use of the money which was in his hands for a year. That is very probable, but there is no proof of it.

It was also suggested that Johnson as a “casual accountant” to the Crown was bound to account for the money with interest. But no authority was given in support of this proposition, and it appears that the records of the old Court of Exchequer which might have thrown some light upon this point are not readily accessible.”

It is to be noted from that passage that Lord Macnaghten, in seeking expressly to guard against misapprehension, confines his remark to “money obtained by fraud and retained by fraud”. Further, it can be seen that the Claimant had argued that the Defendant “must have made a profit”, a matter which was clearly considered to be of importance to the claim. Equally, a liability to account had been argued. In my view, nothing in Johnson’s case supports the notion that there is an equitable jurisdiction to award compound interest on damages for deceit at common law, apart from cases in which money has been obtained and retained by fraud, where an equitable remedy is likely to co-exist. It is to be recalled that the customary equitable remedy for misrepresentation was rescission; the remedy of damages was to be found in the courts of common law. Where money is obtained and retained by fraud, the equitable remedy of an account is likely to be available.

In my view, therefore, the answer to the present question must lie in determining the extent and limits (if any) of the equitable jurisdiction to award interest on money judgments in cases involving fraud.

Before examining the authorities in a little greater detail, I refer gratefully to the summary of the law set out in the Law Commission’s Consultation Paper No. 167 of 31 July 2002. The paper discusses “The current position” under various categories, including “Interest in trust and other equity cases” and “Interest on damages”. The passage dealing with the latter category includes the following:

“At common law there is never interest on damages; nor would there appear to be a power in equity to award interest, simple or compound, on common law damages”.

A footnote adds:

“There is no case which specifically states this in relation to damages; but the reasoning in Westdeutsche Landesbank … , which reaches the same conclusion in relation to debts, would be equally applicable in damages cases”.

There is no express mention of fraud.

In its passage on “Interest in trust and other equity cases”, the following appears:

“Outside the trust field, equity will order interest against an agent or receiver who fails to render an account. A constructive trust found to exist because of fraud, or because of profits made from a fiduciary position (whether or not by an actual trustee), may be treated in the same way as an express trust if it is possible to identify the money and ascertain its investment history. Often however a constructive trust differs from an express trust in that there is no trust fund which preserves its identity throughout the history of investment. The existence of such a fund must then be supposed as a kind of fiction, as in the equitable remedy of tracing. In such cases compound interest will be awarded, on the analogy of the earnings that the putative trust fund ought to have made. Traditionally, in these cases as in the express trust cases, compound interest was only awarded when the fiduciary had a trade in which the money could be invested. It has been argued that since the Westdeutsche case this condition is no longer essential; but its existence is still assumed in Clef Aquitaine SARL v Laporte Materials (Barrow) Ltd. This kind of interest presents no analogy to compensatory interest on debt or damages; it depends on the proprietary character of the claim, and represents the deemed profit of the defendant rather than the deemed loss of the claimant.”

The Commission’s conclusion is:

“Compound interest is only awarded in the following cases:

(a)

where the contract, or the usage of a trade, provides for compound interest;

(b)

in trust and constructive trust cases, where the claim has a proprietary flavour and the defendant has applied the money in trade, so that the award is seeking to represent the gain made by the defendant rather than the loss to the claimant;

(c)

in the form of special damages to cover compound interest paid by the claimant as a result of the defendant’s wrongful act or omission;

(d)

in arbitration cases, though the principles on which arbitrators should award compound interest have yet to emerge. ”

From none of the quoted passages can one derive support for a general jurisdiction to award compound interest upon damages payable under a common law judgment for the tort of deceit. I think that Mr. Saini is likely to be correct in his submission that, if there was such a general jurisdiction, its omission from the paper would be glaring. Of course, that is not determinative.

The first case which, in relatively modern times, explored the equitable jurisdiction to award compound interest was Wallersteiner v Moir (No.2) [1975] QB 373. That was a case of company money being unlawfully applied in breach of what was then section 54 of the Companies Act, 1948. There were also claims to declarations of fraud, misfeasance and breach of trust. The Court declined to make declarations in a judgment in default of defence, but nevertheless it made orders for the payment of money sums together with interest: see the earlier decision in the same case, reported at [1974] 1 WLR 991. It was clearly, therefore, a claim in fraud, although the relief granted was confined to the money judgment because of the procedural reluctance, at least at that time, to grant declarations in a default judgment. (On that procedural point the law has moved on: see Civil Procedure 2004 Vol.1 paragraph 40.20.3 pp 1010-1011.)

The decision on the interest point in the Wallersteiner case was made in the context described. The judgment, deciding that compound interest should be awarded, set out the principles at [1975] QB 388 (per Lord Denning M.R.), pp. 397-399 (per Buckley L.J) and p. 406 (per Scarman L.J). The judgments are not at one as to the nature of the relevant jurisdiction. At p.388, Lord Denning said,

“The principles on which the courts of equity acted are expounded in series of cases … Those judgments show that, in equity, interest is never awarded by way of punishment. Equity awards it whenever money is misused by an executor or a trustee or anyone else in a fiduciary position – who has misapplied the money and made use of it for his own benefit … The reason is because a person in a fiduciary position is not allowed to make a profit out of his trust: and, if he does, he is liable to account for profit or interest in lieu thereof”.

However, Lord Denning went further; he said,

“In addition interest is awarded whenever a wrongdoer deprives a company of money which it needs for its use in its business. It is plain that the company should be compensated for the loss thereby occasioned to it. Mere replacement of the money – years later- is by no means adequate compensation, especially in days of inflation. The company should be compensated by the award of interest. That was done by Sir William Page Wood V.C (afterwards Lord Hatherley) in one of the leading cases on the subject, Atwool v Merryweather (1867) L.R. 5 Eq. 464 on., 468-9. But the question arises: should it be simple interest or compound interest? On general principles I think it should be presumed that the Company (had it not been deprived of the money) would have made the most beneficial use open to it: c.f. Armory v Delamire (1723) 1 Str. 505 … But, whichever it is, in order to give adequate compensation, the money should be replaced at interest with yearly rests, i.e compound interest …”

Buckley L.J. set out the principles in accord with the first passage cited above from the judgment of Lord Denning, but the learned Lord Justice did not espouse the second passage. He based his decision upon the principle that the court will not allow a trustee to make a profit from his trust: see e.g. p.397E. He expressly rejected an argument that the companies should be awarded compound interest on the ground that the moneys were working capital. The view of Buckley L.J. was:

“In cases of this kind interest is not, as I understand the law, given to compensate for loss of profit but in order to ensure as far as possible that the defendant retains no profit for which he might be able to account …” (see page 398 H).

Scarman L.J. held that compound interest should be awarded. He said,

“ The question whether the interest to be awarded should be simple or compound depends upon evidence as to what the accounting party has, or is to be presumed to have done with the money. As Lord Hatherly L.C. said in Burdick v Garrick, 5 Ch. App. 233, 241:

“the court does not proceed against an accounting party by way of punishing him for making use of the plaintiff’s money by directing rests, or payment of compound interest, but proceeds upon this principle, either that he has made, or has put himself into such a position as that he is to be presumed to have made, 5 per cent., or compound interest, as the case may be”.

The case of Atwool v Merryweather, cited by Lord Denning, in the second passage quoted above was a claim to set aside a contract for the sale and purchase of mines and for repayment “of the sum of £3940, or such portions as had been received by them …” (see p.464). It was, therefore, a clear case of recovery of money and profit thereon, rather than a true case of compensatory relief. Armory v Delamire was a case in trover and a decision on the measure of damages, not on interest. The Claimant sought the recovery of a precious stone from a goldsmith. The direction of Pratt C.J. to the jury was

“… that unless the defendant did produce the jewel, and shew it not to be of the finest water, they should presume the strongest against him, and make the value of the best jewels the measure of their damages”

which (in the words of the report) “they accordingly did”.

The use of the expression “c.f.” by Lord Denning suggests perhaps that he saw this case as only indirectly analogous to the matter before him.

In President of India v La Pintada Compania Navigacion S.A. [1985] AC 104. 115-6, Lord Brandon of Oakbrook reviewed the law relating to interest as it stood in 1981. So far as equity was concerned, his statement of the law was as follows:

“Thirdly, the area of equity. The Chancery courts, again differing from the common law courts, had regularly awarded simple interest as ancillary relief in respect of equitable remedies, such as specific performance, rescission and the taking of an account. Chancery courts had further regularly awarded interest, including not only simple interest but also compound interest, when they thought that justice so demanded, that is to say in cases where money had been obtained and retained by fraud, or where it withheld or misapplied by a trustee or anyone else in a fiduciary position.”

Lord Brandon added:

“Two points of importance are to be observed … The first point is that neither the Admiralty Court, nor the Court of Chancery, awarded interest, except in respect of moneys for which they were giving judgment. The second point is that the Admiralty Court never, and the Courts of Chancery only in two special classes of case, awarded compound, as distinct from simple interest”.

Hobhouse J (as he then was) drew on these cases in Kleinwort Benson Ltd v South Tyneside MBC [1994] 4 All ER 972. His conclusion was:

“The position is therefore that if a plaintiff is entitled to a proprietary remedy against a defendant who has been unjustly enriched, the court may but is not bound to order the repayment of the sum with compound interest. If on the other hand the plaintiff is only entitled to a personal remedy which will be the case where, although there was initially a fiduciary relationship and the payer was entitled in equity to treat the sum received by the payee as his, the payer’s, money and trace it, but because of subsequent developments he is no longer able to trace the sum in the hands of the payee, then there is no subject matter to which the rationale on which the compound interest is awarded can be applied. The payee cannot be shown to have a fund belonging to the payer or to have used it to make profits for himself. The legal analysis which is the basis of the award of compound interest is not applicable. (It is possible that in some cases there might be an intermediate position where it could be demonstrated that the fiduciary had, over part of the period, profited from holding a fund as a fiduciary even though he no longer held the fund at the date of trial and that in such a case the court might make some order equivalent to requiring him to account for those profits; but that is not the situation which I am asked to consider in the present case.)”

An objection to this decision, pointed out by Lord Goff of Cheveley in the Westdendeutsche Landesbank case, was that Hobhouse J had held that the defendant council was under a personal liability to make restitution both at law and in equity. Lord Goff said that he knew of no authority which compelled Hobhouse J to hold that he had no jurisdiction to award compound interest in respect of the personal claim in equity. Of course, that presupposes that there is a claim in equity, which, in the case before me, there is not. However, as Lord Goff pointed out, at least two of the leading cases involved personal claims: A-G v Alford (1885) 4 D & G. M & G 843 and Burdick v Garrick (1870) LR 5 Ch. App. 233. They were, however, cases concerned with equitable causes of action for an account and payment of the sum found due.

That brings me to the Westdeutsche Landesbank case itself. The case, so far as interest was concerned, was dealing with a common law claim to restitution and, on that point, the question was whether the law should be extended to permit the award of compound interest upon the money ordered to be repaid. Their lordships, by a majority, decided against any such extension. They were not concerned with a case of fraud.

Of the majority, as already observed, Lord Browne-Wilkinson described the jurisdiction in equity “in the absence of fraud”. He did so in the traditional terms to be derived from the authorities to which I have already referred. He did not expand upon the extent of the “fraud” jurisdiction in equity. However, it is, I think, worthy of note that one of the potential objections that he perceived in the extension of the law, favoured by the minority, was whether the principle of equity acting in aid of the common law applied where there was no concurrent right of action in equity. Further, in the absence of a trust or fiduciary relationship, Lord Browne-Wilkinson questioned what was the equitable cause of action in that case: see [1994] AC pp. 717-718.

Also in the majority, Lord Lloyd of Berwick could not agree with Lord Goff and Lord Woolf that, in the La Pintada case, Lord Brandon had only been giving examples of the application of a general equitable jurisdiction to grant ancillary relief by way of compound interest: see [1996] AC at pp. 739-740.

Lord Slynn of Hadley agreed with all their lordships in holding that there was no trust or fiduciary relationship in that case; further there was no resulting trust. His view, therefore, on the interest point was:

“ It follows that if, as I think, Lord Brandon of Oakbrook in President of India v La Pintada Compania Navagacion S.A. [1985] A.C. 104, 116, was right to say that in the Court of Chancery the award of compound interest was limited to situations “where money had been obtained and retained by fraud, or where it had been withheld or misapplied by a trustee or anyone else in a fiduciary position,” Courts of Chancery would not have awarded compound interest in a case like the present”

I note the use of the word “limited”.

Both Lord Goff and Lord Woolf were of the view that Lord Brandon’s statement of the equitable jurisdiction either was or “may well be” merely a statement of examples of the exercise of that jurisdiction: see [1996] AC at p.692 and 726. As Lord Woolf noted, Mason C.J and Wilson J in the High Court of Australia took this view in Hungerfords v Walker (1989) 171 CLR 125, 148 (not cited to me). The relevant passage in the joint judgment of those two judges in the Australian case is as follows:

“Equity has adopted a broad approach to the award of interest. It has long been accepted that the equitable right to interst exists independently of statute: Wallersteiner v Moir (No.2). Equity courts have regularly awarded interest, including not only simple interest, when justice so demanded, e.g. money obtained and retained by fraud and money withheld or misapplied by a trustee or fiduciary: La Pintada.”

Brennan, Deane and Dawson JJ in that case do not appear to have alluded to the equitable jurisdiction. The case was one concerning the recovery of damages for the loss of use of money, within the rule in Hadley v Baxendale (1854) 9 Ex. 341 (c.f. sub-paragraph (c) of the extract from the Law Commission’s paper cited at paragraph 17 above.). The point on interest was whether s.30c(1) of the South Australian Supreme Court Act 1936 was a comprehensive and exclusive code governing the award of interest in that State. The Court (Dawson J dissenting) held that it was not.

Lord Goff in the Westdeutsche Landesbank case was of the view that if the jurisdiction to award compound interest was available, where justice so demands, it cannot be confined as to exclude any class of case simply because that class of case has not previously been recognised as falling within it: see [1996] AC p.692. Lord Goff proceeded to analyse the reported cases on the exercise of the jurisdiction. He concluded that,

“From these cases it can be seen that compound interest may be awarded in cases where the defendant has wrongfully profited, or may be presumed to have so profited, from having the use of another person’s money. The power to award compound interest is therefore available to achieve justice in a limited area of what is now seen as the law of restitution, viz. where the defendant has acquired a benefit through his wrongful act (see Goff & Jones,The Law of Restitution, 4^th ed. (1993), pp. 632 et seq.; Birks, An Introduction to the Law of Restitution, pp. 313 et seq.; Burrows, The Law Restitution (1993), pp. 403 et seq.). The general question arises whether the jurisdiction must be kept constrained in this way, or whether it may be permitted to expand so that it can be exercised to ensure that full justice can be done elsewhere in that rubric of the law”.

As already observed Lord Goff said that he knew of no authority which could have compelled a judge to hold that he had no jurisdiction to award compound interest in respect of a personal claim in equity (p.695). In the next sentence he concludes that there is a jurisdiction in equity to award such interest in the case of personal claims (presumably both in equity and at law) as well as proprietary claims: sed quare. However, I think that it is clear from the passage of Lord Goff’s speech, quoted above, that he regarded this conclusion as an expansion of the law to ensure that full justice could be done.

Lord Woolf was essentially of the same view as Lord Goff as to the extent of the equitable jurisdiction. At p.721 of Lord Woolf’s speech he cites Snells’s Equity, including the following,

“Equitable remedies, though often used in aid of property rights, are often used in other cases. The underlying principle is the inadequacy of the common law remedy of damages …”

Further, Lord Woolf quoted the now much cited passage from Lord Macnaghten’s judgment in Johnson’s case (supra) and said,

“Lord Macnaghten did not consider that it mattered whether the proceedings were based on a common law or equitable cause of action”

But, of course, Lord Macnaghten did confine himself to cases where money had been obtained and retained by fraud, where there would no doubt be parallel causes of action at law and in equity.

Thus, it appears to me that in the Westdeutsche Landesbank case, two of their lordships were firmly of the view that the equitable jurisdiction was limited to the categories of case expressly identified by Lord Brandon in La Pintada (viz. Lord Slynn and Lord Lloyd). Two of their lordships, (Lord Goff and Lord Woolf) thought that the equitable jurisdiction was quite general, or was capable of legitimate extension to be quite general. Lord Browne-Wilkinson took fraud cases out of his analysis of the equitable jurisdiction. He did not expand upon that type of case, but otherwise he stated the law along the traditional lines to be found, for example, in the judgment of Buckley L.J in Wallersteiner and Moir (No.2) (supra). Moreover, when faced with the submission that the equitable jurisdiction should be expanded to apply to a common law claim to which it had not been previously applied, the majority of their lordships held that they should not do so in an area where Parliament had twice declined to authorise the award of compound interest. Further, in great deference to Lord Woolf and with hesitation, I can see the force in an argument of principle that the grant of the equitable remedy of compound interest should be ancillary to an equitable cause of action, either personal or proprietary, whether concurrent with common law claims or not. Lord Browne-Wilkinson seemed inclined to that view also: see [1996] AC pp.717-8.

In the circumstances, I conclude that the preponderance of authority is against the claim urged by the Claimants in this case. No authority could be cited to support the general jurisdiction for which Mr. Mallin persuasively contended. Moreover, the House of Lords considered that the areas in which compound interest can be awarded should not be extended by judicial as opposed to parliamentary intervention. I hold accordingly that the Court does not have jurisdiction to award compound interest in respect of a judgment for damages for deceit.

If I am wrong about that, it is right that I should decide the second question, namely whether the Court should in this case exercise such discretion as it might have to award compound interest in this case.

The arguments on this point were very short. Mr. Saini urged that, if the Claimants wished to establish a case for such interest, it was incumbent upon them to plead that case and to adduce evidence to show what they would have done otherwise with the money which they lost because of the fraudulent misrepresentation. Precisely to the contrary, Mr. Mallin for the Claimant said that in a case of this type, involving commercial persons and entities, it should be assumed, unless the contrary was pleaded and proved, that the Claimants would have derived normal commercial benefit from their money.

To a degree, I am at a disadvantage, as compared with the trial judge, in deciding this question, not having heard the evidence and not, therefore, having as full an understanding of the nature of the Claimant’s undertaking and trading pattern as he had. Equally, by definition, in considering a claim to compound interest upon damages for the common law tort deceit, I am embarking upon ground on which no court has previously trodden.

In cases where the courts of equity have been considering profitability to a defendant of a breach of equitable duty, they have readily assumed that such defendants, involved in commerce will have used money wrongfully obtained to normal commercial benefit. See Wallersteiner v Moir at p.398 F – G. I think that the courts should adopt a similar approach to the position of a Claimant. Here, the Claimants were commercially active and apparently astute in their field. In the circumstances, I think that it is right to assume that, if they had not wrongfully been the victims of fraud, they would have applied the money which they had to normal commercial advantage, and would have thereby done at least as well as any person of commerce investing the funds which they lost. If the defendant had wished to contend the contrary, it would have been for him to plead and prove that the Claimants would have lost their money anyway or would have been likely to derive less benefit than ordinary people in commerce. Therefore, if I had found that I had jurisdiction to award compound interest, I would have done so. I would have directed that such interest should run from the appropriate date until payment, compounded with yearly rests. That was the compounding calculation directed in Wallersteiner v Moir and no other basis has been advanced before me. However, as I have found that I have no jurisdiction to make such an award, I decline to do so.