Persimmon Homes –v- Hall Aggregate CILL (2012) TCC Ramsey J
Hall Aggregate obtained judgment for £1,146,000 against Persimmon on a dispute arising from a sale of some land. The parties could not agree what rates of interest should be charged (a) prior to judgment; and (b) after judgment.
Under Section 35A Senior Courts Act 1981, the Court has a general discretion in respect of interest to the date of judgment. It normally regards 1% over bank base as being an appropriate rate to reflect the cost of borrowing money. In the present exceptional circumstances where the Bank of England base was only 0.5%, the Court recognised that the cost of borrowing money was greater than this and would therefore normally award 2% over the base rate.
As regards the interest rate to be applied after judgment, Section 17 of the Judgment Act, 1838 currently sets the rate of interest at 8%. The Judge applied this rate to the judgment award to run from the date of judgment until the date of payment.
Many companies are paying 1% over their lending bank rates which may be several percentage points higher than Bank of England base. As the Court has a complete discretion it will always be worth producing evidence from one’s bank of the actual cost of borrowing money.
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