Amcor Ltd & Ors v Barnes & Ors [No 2] [2019] VSC 849

PRACTICE AND PROCEDURE - Interest - Rate at which interest is to be awarded on the judgment sum - Rate is within the Court's discretion subject to s 60(1) of the Supreme Court Act 1986 - Whether the penalty interest rate or some lesser rate is to be applied

For the Plaintiffs by Counterclaim/Defendants to Cross-Claim

Reasons for decision delivered on 28 November 2016

1 The Court heard the trial of both the counterclaim and the cross-claim in the 'Barnes proceeding' on various dates between 25 May and 15 September 2015, and delivered its reasons for decision on 28 November 2016: Amcor Ltd & Ors v Barnes & Ors [2016] VSC 707 ('Reasons').

2 Relevantly, for present purposes, the Court found that when the reciprocal purchase and supply obligations established by clause 12 of the Second Sale Agreement are viewed in the context of the whole agreement and the surrounding circumstances, the obligations imposed on the relevant Amcor parties (being ACN002693843 Box Pty Ltd ('ACB Co Vendor') prior to entry into the Deed of Accession and Amcor Packaging (Australia) Pty Ltd ('APA') following entry into the Deed of Accession) under clause 12.2 to obtain 'all its OME supplies' from the first plaintiff by counterclaim ('Achilla') (one of the Holihan parties) were essentially as follows:[2]

(a) On its proper construction, the purchase obligation imposed on ACB Co Vendor under clause 12.2 is to be construed as an obligation on the part of ACB Co Vendor to continue to provide to Achilla after the sale, effectively all of the same sort of work that the ACB Business had been doing prior to the sale, save in circumstances where the exception was enlivened. That is, notwithstanding the sale, the ACB Business (under new ownership) would effectively continue on the same basis as before (i.e., when conducted by ACB Co Vendor). Thus, in the ordinary course, customers' work that was entered in the PICK system with a master denoting the ACB Business would be routed to Achilla notwithstanding the change in ownership. Similarly, in the case of new jobs that involved work of the kind that was performed by the ACB Business prior to the sale, in the ordinary course, a quote would be generated using the PICK system, and work would be routed to Achilla unless the exception was enlivened. In this way, Achilla would continue to perform the work that historically had been undertaken by the ACB Business, and essentially on the same basis as before, including that its supplies of raw material would continue to be sourced from the AFP businesses conducted at the Smithfield and Revesby sites in New South Wales.

(b) As to whether Amcor Displays' work was captured within the clause 12.2 purchase obligation, on the evidence, it seems clear that while the ACB Business was doing some work for Amcor Displays prior to the sale, it was not doing all or even a significant proportion of the Amcor Displays' work. The evidence suggests that a small component of the Amcor Displays' work was being performed by the ACB Business notwithstanding the arrangement then in place with ACE Print, and that it was being recorded separately from the other work performed for the businesses conducted by AFP at its Smithfield and Revesby sites. In the period prior to the Deed of Accession being entered into, as a general proposition, the Amcor Displays' work was not encompassed within the scope of clause 12.2. However, given that I have found that on a 'business as usual' construction of the clause 12.2 obligation, Achilla would likely have received some small amount of Amcor Displays' work of the kind that the ACB Business had been doing for it prior to the sale (save for circumstances where the relevant exception was enlivened), clause 12.2 entitled Achilla or the ACB Business to continue receive a small amount of the same sort of Amcor Displays' work.

(c) In the period following execution of the Deed of Accession, the scope of clause 12.2 remained unchanged from the position described above. That is, the substitution of APA as 'Vendor' in place of ACB Co Vendor did not relevantly enlarge the scope of the clause 12.2 purchase obligation.

3 Against that background, the general position as found by the Court is that Achilla is entitled to be compensated by APA for each job that should have been provided to the ACB Business on a 'business as usual basis' for the period from 27 September 2005 to 31 July 2008 ('Claim Period'), save for work that fell within the carve out or exception to that obligation in clause 12.2.[3]

4 Since delivering its Reasons, the Court has conducted a host of directions hearings, heard several contested applications and delivered three separate rulings addressing additional matters raised by the parties in relation to the damages or compensation to be awarded to Achilla. That process has involved the making of a reference to a special referee, and the preparation of a report by him, and the giving of further instructions to the accounting experts who gave evidence at the trial for the preparation of several further joint reports by them.

5 On 2 February 2018, the Court delivered a ruling concerning two competing applications before the Court for determination:

• the first being the Holihan parties' application seeking to have the Court proceed to refer the matter to a special referee, Mr Ronald Mines, for him to undertake the reference as to whether Achilla is entitled to compensation in relation to each of the 'Disputed Jobs'; and

• the second being the Amcor parties' application for the Court to make an order recording its answers to each of the questions posed in the statement of issues (6 key issues and 20 specific issues) that were addressed in the Reasons and order that the further hearing or determination of the counterclaim (and cross-claim) be stayed until further order.

6 The Court determined that the preferable course was to proceed with the reference to the special referee rather than by making orders formally answering the questions raised in the statement of issues (Amcor Ltd & Ors v Barnes & Ors (Ruling No 1)).[4]

7 Following the delivery of Ruling No 1, the Court made orders on 6 February 2018 dismissing the Amcor parties' amended summons and appointing Mr Ronald Mines as special referee pursuant to Order 50 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) ('Rules'). Those orders provided for the reference to be undertaken by Mr Mines in a staged process, essentially because the Holihan parties had identified three additional legal questions that both parties agreed must be determined by the Court before Mr Mines could complete the reference. Mr Mines was also specifically directed not to determine (what was described as) the 'Amcor Displays Objection'.[5] To that end, in Annexure A to the 6 February 2018 orders, Mr Mines was instructed that:[6]

Where the Claim Documents show that the Amcor Parties rely upon the Amcor Displays Objection for a particular job, your task in considering that job is to determine whether Achilla would have received the Disputed Job on a "business as usual" basis, having regard to any objections made by the Amcor Parties other than the Amcor Displays Objection.

8 On 29 March 2018, the Court delivered a further ruling addressing three legal questions that had been raised by the Holihan parties for determination by the Court, namely:

(a) Whether the Holihan parties have discharged their burden of proof in respect of jobs for which invoices and purchase orders are missing or illegible.

(b) Whether the Amcor parties are entitled to rely on the carve-out in relation to any work other than 'repeat order' work.

(c) Whether the Amcor parties are entitled to raise any issues with respect to 'partitions' jobs.

(Amcor Ltd & Ors v Barnes & Ors (Ruling No 2)).[7]

9 At the end of Ruling No 2, the Court noted that both the Holihan parties and the Amcor parties had informed the Court that, in light of the Court's finding that on a 'business as usual' construction Achilla would likely have continued to receive some small amount of Amcor Displays' work of the kind that the ACB Business had been doing for it prior to the sale, it was likely the 'Amcor Displays jobs' would raise considerations additional to those that apply to the remainder of the jobs. However, as both parties were in general agreement as to the way forward, the Court indicated that if, following consideration of the special referee's report, either party wished to seek to seek leave to re-open, a formal application should be made, supported by appropriate material.

The Mines Report was delivered on 12 November 2008

10 On 12 November 2018, Mr Mines delivered his report to the Court, comprised of a 'reference overview' and a schedule setting out his determination, on a job by job basis, as to whether Achilla is entitled to damages for each job ('Mines Report'). In his reference overview, Mr Mines outlined the approach he had followed to reach his findings in respect of each disputed invoice, stating:[8]

. . .

As directed, I have reviewed these invoices based upon arguments put by the parties in columns I, J and K of the (Revised) Claim Documents.

In all of the above cases, I have applied logic based on my extensive knowledge of the corrugated box industry, as well as knowledge gained within the several industry businesses that I have either been employed by, or have supplied contract work to.

The above logic and knowledge encompasses the type of manufacturing industry/processes available to Achilla, as described in Sections 17e and 18 of [the 6 February 2018 orders] and the evidence of the various suppliers regarding their processes and capabilities.

I was able with a fair degree of accuracy, to determine whether Achilla had the capability to perform specific work but I was unable to determine whether they had the capacity, at any particular time, to perform the work.

I based my assessment on their capability only.

. . .

11 Both the Holihan parties and the Amcor parties indicated that they were generally content with the way that the special referee has gone about performing the tasks that were allocated to him.

12 On 7 December 2018, orders were made, by consent, for the parties to file written submissions addressing four topics:

(a) the adoption or otherwise of the Mines Report (or part(s) thereof);

(c) any application made to re-open and adduce further evidence in relation to Amcor Displays; and

(d) the procedural steps to follow the adoption or otherwise of the Mines Report.

13 Pursuant to those orders, the Holihan parties and the Amcor parties each filed an outline of submissions, a summons and an affidavit in support. They sought leave to re-open their respective cases, to adduce further evidence relevant to the Amcor Displays Objection and to make submissions.

14 The matter was listed for hearing on 8 February 2019. On that day, as the time available permitted the Court to hear argument directed to the Amcor Displays issues only, the Court noted that it would be necessary to re-schedule a further hearing to deal with the other two outstanding issues.

15 On 14 June 2019, the Court delivered its reasons for the ruling in relation to the Amcor Displays Objection (Amcor Limited & Ors v Barnes & Ors (Ruling No 3)[9]) and listed the matter for further directions as to the adoption or otherwise of the Mines Report and the further procedural steps required in order to progress the proceeding.

16 In Ruling No 3, the Court found, among other things, that in the final year before entry into the Second Sale Agreement, the ACB Business performed OME work for Amcor Displays to the value of $172,097.83.[10]

17 In relation to jobs the subject of the Amcor Displays Objection, the Court found, in effect, that Achilla is to be compensated for the "business as usual" Amcor Displays work that it did not receive during the Claim Period. The Court also found that such compensation:[11]

(a) is to be measured on the basis that Achilla would have received $172,097.83 (excluding GST) per annum in respect of Amcor Displays Jobs for the Claim Period;

(b) is to be pro-rated for the 2005/06 financial year and the month of July 2008; and

(c) is to take into account the value of Amcor Displays OME work that Achilla did receive during the Claim Period (being $49,423.04 including GST).

18 A directions hearing was held on 26 June 2019 to consider the form of order to be made following delivery of the ruling. The directions hearing was then adjourned to 28 June 2019 so as to permit the parties to consult and bring forward a minute of proposed consent orders. (In the event that orders could not be made on the papers the directions hearing would proceed on 28 June 2019.)

19 Following completion of the Special Referee process and delivery of the Mines Report, the parties contested Mr Mines' findings in respect of a subset of the Disputed Jobs he reviewed. That subset is referred to as 'Contested Jobs' in the relevant orders made by the Court. At the directions hearing on 28 June 2019, counsel for the respective parties informed the Court that:

(a) the parties, acting in accordance with their respective obligations under the Civil Procedure Act 2010 (Vic), had reached an agreement (referred to in order 2(a) of the orders) so as to avoid incurring further costs relating to the Contested Jobs; and

(b) the agreement was not intended by either party to restrict the bases upon which either party might appeal any orders of this Court (if any appeal is brought).

20 Accordingly, at the directions hearing on 28 June 2019, the Court made orders, by consent, for:

(a) 'Quantification of Achilla's damages' and requiring the parties to instruct their respective experts, Mr Greg Meredith in the case of the Holihan Parties and Ms Dawna Wright in the case of the Amcor Parties, with an agreed letter of instruction to prepare a joint report quantifying Achilla's damages in accordance with the paragraph 2 of those orders, Amcor Ltd & Ors v Barnes & Ors [2016] VSC 707 and Amcor Limited & Ors v Barnes & Ors (Ruling No 3) [2019] VSC 393; and

(b) the adoption of the Mines Report (save in so far as the report concerns the jobs the subject of the Amcor Displays Objection and the Contested Jobs listed in Annexure A to the orders, and with some minor variations).

21 In accordance with further orders made on 30 July 2019, the parties instructed their respective experts with an agreed letter of instruction, and on 22 August 2019 the parties' respective experts provided a joint expert report prepared in response to the letter of instruction ('August Report').

22 At a directions hearing held on 28 August 2019, the parties and the Court discussed two 'issues' contained in the August Report about which further clarification from the parties' respective experts was required. Accordingly, on 3 September 2019 the parties provided to their respective experts a supplementary joint letter of instructions seeking clarification in relation to the 'issues' discussed at the hearing on 28 August 2019 ('Supplementary Letter of Instruction'). On 18 September 2019 the parties' respective experts provided a joint expert report prepared by them in response to the Supplementary Letter of Instruction ('September Report').

23 At directions hearings held on 26 September and 3 October 2019, the Holihan Parties raised issues with the September Report. The parties subsequently prepared a further supplementary letter of instruction regarding the quantification of Achilla's loss, including seeking clarification about the quantification of loss in the calculations accompanying the August and September Reports ('Further Supplementary Letter of Instruction'). On 23 October 2019, the parties' respective experts provided a joint expert report (and associated calculations) in response to the further supplementary letter of instruction (October Report). On 30 October 2019 the parties' respective experts provided a revised version of their October joint expert report (and associated calculations) in order to correct a typographical error.

24 Against that background, on 29 October 2019 the Court made orders listing the proceeding for hearing as to final orders (other than as to costs) on 25 November 2019 and fixing a timetable for the parties to file and serve submissions (including reply submissions) in relation to any outstanding matters (other than costs) including:

(a) the adoption (or otherwise) by the Court of the joint experts' reports;

(b) quantification of damages payable to Achilla, including any amount by way of interest; and

(c) final orders disposing of the counterclaim and cross-claim.

25 The Holihan parties[12] and the Amcor parties[13] each filed outlines of submissions and reply submissions. The Amcor parties also filed and served an affidavit of Ms Christiana McCudden (solicitor for the Amcor parties) sworn on 19 November 2019, in order to collate in one place the documents relevant to the Holihan parties' claim for interest ('McCudden Affidavit'). On the morning of the hearing, the Holihan parties filed an affidavit of Mr James Humphris (solicitor for the Holihan parties) affirmed on 25 November 2019 ('Humphris affidavit') responding to the matters addressed in the McCudden affidavit and matters raised in the Amcor parties' reply submissions. Following the hearing, a supplementary affidavit of Mr Humphris affirmed on 25 November 2019 ('supplementary Humphris affidavit') was filed, exhibiting a copy of the orders Vickery J made on 13 March 2015 fixing the counterclaim and cross-claim for trial.

26 In summary, for the reasons set out in their submissions, the Holihan parties seek orders or directions as follows:

(a) For the purpose of calculating Achilla's loss, the five 'Direct Employee Cost line items'[14] identified as fixed costs in the First[15] and Second Year[16] Budgets should be regarded as fixed costs.

(b) The joint experts' report dated 23 October 2019 (as reissued on 30 October 2019)[17] should be received into evidence and form the basis for the assessment of Achilla's damages for breaches of clause 12.2 of the Second Sale Agreement[18] by APA.[19]

(i) $232,642.06 for APA's breaches of clause 12.1 of the Second Sale Agreement in relation to overcharging;

(ii) $2,197,414 for APA's breaches of clause 12.2 of the Second Sale Agreement due to lost OME sales; and

(d) Interest should be calculated on the sum of $2,430,056.06 in accordance with s 60 of the Supreme Court Act 1986 (Vic) ('Act') from the date of the commencement of the (principal) proceeding (3 September 2007) to the date of judgment.

(e) ACB Co Purchaser[20] is entitled to a release of the Charge[21] upon payment of the sum of $300,000 to APA. A declaration should be made to this effect and an order made requiring APA to provide all necessary documents and assistance to effect a release of the Charge.

(f) APA's cross-claim against the Holihan Parties should be dismissed.

(g) That, as contemplated by the Court's orders of 29 October 2019, orders should be made for the filing and service of submissions as to the issue of costs and a date set for any necessary hearing.

27 The Holihan parties have prepared a form of the judgment they seek, as follows:[22]

1. The second defendant to counterclaim [APA] pay the first plaintiff by counterclaim [Achilla] $2,430,056.06 plus interest of $3,086,370.93.[23]
2. The Court declares that, upon payment to the first defendant to counterclaim [(ACB Co Vendor)] of $300,000, the second plaintiff by counterclaim (ACB Co Purchaser) is entitled to a release of the Charge granted by ACB Co Purchaser to the defendants to counterclaim on or about 2 June 2003 (the Charge).
3. Within seven days following payment by ACB Co Purchaser of $300,000 to the first defendant to counterclaim (ACB Co Vendor), the defendants to counterclaim are to execute and provide to ACB Co Purchaser a release of the Charge and any documents necessary to register that release on any register on which the Charge is registered.
4. The counterclaim is otherwise dismissed.
5. The cross-claim is dismissed.
6. Costs of the counterclaim and cross-claim are reserved.

28 Separately, the Holihan parties seek orders that:[24]

1. The joint experts reports of Mr Greg Meredith and Ms Dawna Wright dated 22 August 2019, 18 September and 23 October 2019 (as revised on 30 October 2019) be received into evidence and marked as, respectively, exhibits [#], [#], and [#].
2. Any written submissions as to the costs of the counterclaim and/or the cross-claim are to be filed and served by 4pm on [date].
3. The proceeding be listed for a hearing as to the question of costs at 10.30am on [date] or so soon thereafter as the matter may be heard).
4. Costs be reserved.
5. There be liberty to apply.

29 The Amcor parties agree that in respect of the overcharging claim (breach of clause 12.1 of the Second Sale Agreement), the Court should order APA to pay to Achilla the sum of $232,642.06 for the overcharging of the supply of raw materials.[25]

30 In respect of the lost OME sales, the Amcor Parties do not dispute that it is ultimately consistent with the Court's findings in its Reasons and with the evidence at trial for the final figure as calculated by the joint experts in their report dated 23 October 2019 (as reissued on 30 October 2019) to form the basis for the assessment of Achilla's damages for breaches of clause 12.2 of the Second Sale Agreement by APA, and for it to:

(a) include an amount attributable to the profit on incremental costs relating to Amcor Displays Volumes calculated in accordance with Method B; and

(b) Direct Employee Cost line items as fixed costs.

31 In respect of item (b) above, treating Direct Employee Cost line items as fixed costs, the Amcor parties agree with the observation made by the joint experts in their third joint report dated 18 September 2019 that the matter of Direct Employee Cost line items was not explicitly determined by the Court in its Reasons, but they accept that there is no proper basis, consistent with the findings that were made, to contend for any other approach now.

32 Accordingly, the Amcor parties do not dispute that, in determining the amount of damages to award the Holihan parties for APA's breaches of clause 12.2, the Court may act on the joint experts' final report. But they contend that it does not follow that the Court must, or should, award the Holihan parties damages in respect of this part of its counterclaim in the amount of $2,197,414.

33 The Amcor parties' ultimate position is that the Court should award the Holihan parties an amount that is less than $2,197,414. They contend that the relevant amount should be the face value of the invoices for OME work done by alternative suppliers that the Court has held should have been done by Achilla - being an amount of $1,424,363.36 (which is an amount inclusive of GST based on the invoices for OME work obtained from alternative suppliers). The GST exclusive amount is $1,294,875.78. (On their face value of the invoices argument, the GST component is said to be relevant in the context of awarding interest. The Amcor parties submit that Achilla should not be awarded interest on the GST component of any award.[26])

34 In essence, the Amcor parties submit that there are two reasons why the Court is not bound to equate the final calculation by the experts with the final figure which it should award to the Holihan parties on this part of their counterclaim. The first reason advanced is a matter of principle. In effect, the Amcor parties submit that while the Court's findings must be informed by the evidence, including any expert evidence, the question of damages is ultimately a matter for the Court. The second reason is said to arise on the evidence before the Court. The Amcor parties refer to the Court's findings to the effect that the information available to the experts was incomplete[27] and submit that it has always been the case that the experts were proceeding 'sub- optimally'. In these circumstances, the Amcor parties submit that the principled position that the Court is not bound by the expert evidence applies in this case, particularly as the experts themselves always acknowledged that they were applying a methodology which was their best effort, given the imperfect information, to calculate Achilla's profit.

35 The Amcor parties submit that, having regard to the jobs which Mr Mines awarded to Achilla (as varied by the Court on 28 June 2019), the various concessions by the parties, the Contested Jobs which were agreed by the parties to be 'awarded' to Achilla (see the orders of the Court on 28 June 2019) and the annual sum attributable to Amcor Displays OME work, the face value of the work which the Amcor parties obtained from alternative suppliers instead of Achilla was $1,424,363.36 (GST inclusive).

36 Accordingly, the Amcor Parties submit that $1,424,363.36 (GST inclusive) is the amount that should be awarded as damages due to lost OME sales as a result of APA's breaches of clause 12.2 of the Second Sale Agreement, rather than the amount of $2,197,414 sought by the Holihan parties.

37 In Part D of their outline of submissions, the Amcor parties outlined the form of orders they proposed should be made by the Court.

38 In their reply submissions, the Amcor parties expressly accept that if the Court does not accede to their submission in chief - namely that it is not appropriate to award the Holihan parties more than the face value of the invoices for the OME work which, in breach of contract, the Amcor Parties had alternative suppliers complete - then the Court should use the Final Report of Mr Meredith and Ms Wright to determine quantum.

39 As to the issue of interest, the Amcor parties initially contended that the Holihan parties' claim for interest was governed by s 58 of the Act. However, in their reply submissions, which deal largely with the issue of interest, they accept that s 60 is the relevant provision.

40 In their reply submissions, the Amcor parties reject the position advanced by the Holihan parties that penalty interest should be awarded from the commencement of the principal proceeding, and they dispute both the period for which interest is sought and the (penalty) rate of interest claimed by the Holihan parties.

41 The Amcor parties' 'primary position' is that in circumstances where the Court made orders on 29 June 2011 vacating the trial date for the hearing of Achilla's counterclaim and adjourning it for directions sine die, interest should run from no earlier than 17 September 2014 (being the date following delivery of the Principal Judgment when Vickery J made orders for the conduct of the counterclaim).[28]

42 Two 'fall-back positions' are advanced, one in respect of the damages claim for breach of clause 12.2 and the other in respect of the overcharging claim (breach of clause 12.1). In the case of the clause 12.2 claim, the fall-back position is that interest should run from no earlier than 15 February 2013. The Amcor parties contend that it is only at that point that the Holihan parties fleshed out, in any detail, the claim being made such that it is only from that point that it could be said, with any credibility, that the Amcor parties had sufficient detail even to understand the quantum of what was claimed. In any event, the Amcor Parties also note that such particulars were altered or amended by the Holihan parties on a number of occasions after that document was provided.

43 In respect of the overcharging claim, the fall-back position is that interest should only be awarded from 20 July 2012. In similar fashion, the Amcor parties contend that it is only at that point that the Holihan parties fleshed out, in any detail, the claim being made and thus it is only from that point that it could be said, with any credibility, that the Amcor parties had sufficient detail even to consider resolving the dispute.

44 The Amcor parties submit that the issue of what is the appropriate rate of interest is intertwined with the question of the appropriate time periods for any interest to be awarded. They contend that given the history of this case, the penalty rate of interest should not apply and any award of interest should be at a standard commercial rate, conservatively set at around 2% greater than the Reserve Bank of Australia ('RBA') cash rate applicable for the relevant period.[29]

Remaining matters (release of the Charge, disposal of counterclaim and cross-claim)

45 Otherwise, in respect of the remaining matters, there is no dispute between the parties as to the orders proposed by the Holihan parties in paragraphs 2 to 6 of the form of judgment sought.[30] The parties are also agreed that the Court should make an order requiring Achilla to pay the final instalment of purchase price under the Second Sale Agreement, being $300,000.

46 As to the separate suite of orders proposed by the Holihan parties, there is no dispute between the parties as to order 1 (in relation to the expert reports). In the case of costs, the Amcor parties do not oppose an order for an oral hearing should the Court consider a hearing to be necessary.

47 At the hearing, Senior Counsel for the Holihan parties informed the Court that the parties were agreed that Achilla should be awarded damages of $232,642.06 for the overcharging breaches,[31] and that orders should be made accordingly.

48 Senior Counsel for the Holihan parties also confirmed that the amount sought in respect of the overcharge is an award in the nature of compensatory damages for breach of contract, and having been pleaded as such, no issue of any goods and services tax ('GST') arises.[32]

49 The principal area of disagreement between the parties concerns the damages to be awarded by the Court to Achilla for the OME work that should have been provided to the ACB Business on a 'business as usual basis' for the Claim Period,[33] save for work that fell within the carve out or exception to that obligation in clause 12.2. The Holihan parties' position is that the appropriate means of quantification is the methodology adopted by the joint experts as a result of the evidence they gave at the trial and the findings made by the Court in its Reasons, and as elaborated upon in the further rulings given since then. On that approach, the appropriate sum to be awarded to Achilla is $2,197,414, as set out in the joint experts' October 2019 report (as reissued on 30 October 2019[34]).

50 The Amcor parties accept that if the Court determines that the approach contended for by the Holihan parties is the approach to be adopted, then $2,197,414 is the appropriate sum to be awarded to Achilla. However, their primary contention is that the Court should, in the exercise of its discretion, decline to adopt that approach and effectively put the work done by the experts to one side, and instead award Achilla the face value of the invoices pertaining to the relevant OME jobs, being the amount that the Amcor parties were charged by the alternative suppliers for the OME jobs.

51 In my view, essentially for the reasons advanced by the Holihan parties, the appropriate course is for the Court to fix the quantum of Achilla's damages for breach of clause 12.2 at the sum of $2,197,414, arrived at by adopting the methodology applied by the joint experts in their October 2019 report.

52 The starting point is that on 13 March 2015, Vickery J made orders in preparation for the trial of the Achilla counterclaim and Amcor parties' cross-claim, including an order that 'pursuant to s 50 of the Civil Procedure Act 2010, the trial of the proceeding be conducted by reference to the statement of issues annexed to this order.'[35] The annexed 'Joint Statement of Issues' set out a summary of the issues that the parties considered arose from the pleadings. This document was amended by the parties from time to time, in consultation with one another, during the course of the trial.

[32] In its final iteration, the Joint Statement of Issues occupied 8 pages, and the twenty or so issues were identified and arranged under the following headings:

1. Issues arising on the Counterclaim regarding the Supply Agreement[37] (Issues 1A, 1B, 1-7).
2. Issues arising on the Counterclaim regarding the Charge (Issues 8-13).

1. Issues arising on the Cross-Claim (Issues 14-18).

1. Liability of Holihan, Achilla and ACB Co Purchaser (Issues 19-20).

[33] The parties identified and listed the 'key issues' in dispute, as follows:

1. Was there an Implied Supply Agreement between APA and Achilla containing terms identical to clause 12 of the Second Sale Agreement, or is APA estopped from denying that it was bound by terms equivalent to those alleged in the implied supply agreement?
2. What is the scope of clause 12 of the Second Sale Agreement, and the equivalent clause of any implied supply agreement?
3. Did APA breach the Second Sale Agreement or any implied supply agreement, and if so how is any loss suffered by Achilla to be quantified?
4. What is the scope and effect of APA's alleged overcharging and undercharging of Achilla?
5. What is the scope and effect of the Charge, what if any amount remains secured by it, is ACB Co Purchaser entitled to a discharge of it, and if so on what conditions?
6. Did ACB Co Purchaser breach the Second Sale Agreement or any implied supply agreement by reason of a change of control, and if so, what is the effect of that breach and what, if any, liability for it is borne by ACB Co Purchaser, Achilla and/or Mr Holihan?

54 The trial was set down for determination according to those Issues, and it was conducted, heard and determined by reference to those Issues.

55 Against that background, having heard the lay and expert evidence, the Court concluded that of the three possible methodologies for the assessment of damages that were canvassed by the experts,[38] the adjusted Amcor methodology was to be adopted as the methodology for calculating any loss suffered by Achilla.[39]

56 In reaching that conclusion, the Court had regard to the factors that the experts jointly identified as the important criteria that the Court should focus on in choosing a methodology for calculating Achilla's loss,[40] and the individual views of the experts as to which loss methodology is preferable and why.[41] The Court also considered factual matters that were relevant to the methodology to be adopted, and in particular the role of Annexure 5 to the Second Sale Agreement (which set out the 'D & D basis' charging mechanism that was agreed between the parties at the time of entry into the Second Sale Agreement), the First and Second Year Budgets and the classification of costs as 'fixed' and 'variable' by reference to the First Year Budget (Exhibit H91A).

57 In its Reasons, the Court noted the explanation that Ms Wright had given during the conclave as to why the two methods, relevantly the adjusted Amcor methodology and the adjusted Achilla methodology, each of which starts by using the same information, produce different results, as follows:[42]

[1077] Commencing with the adjusted Achilla methodology, she said it starts with the OME invoices rendered by the alternative suppliers for supplies of essentially the same products as Achilla would have been supplying. It then assumes in each case that the price charged by the alternative supplier is the price that Amcor would have paid for those products had Achilla produced them, and then it allocates Achilla's costs, based on Achilla's financial statements, to those prices.

[1078] Turning to the adjusted Amcor methodology, she said it also starts with the OME invoices and uses the same costs, but 'it makes one important adjustment' namely:

it takes the same invoices, but translates them into a volume that would have been produced and then applies Achilla's costs, based on that volume that Achilla would have produced in providing the same products or supplying the same products. And the reason it does that is to take away the need for an assumption that the prices would be the same, and it actually converts the price into the cost plus type of pricing that is contemplated in the agreement.[43]

[1079] She added that, in her opinion, the adjusted Amcor methodology is a better methodology because it translates the pricing from that charged by the competitor 'to what Achilla's would have been' had the supply taken place under the Second Sale Agreement.[44] That is, it takes the supply of product made by the competitor and 'attempts to convert to the costs plus' methodology in place under the Second Sale Agreement, whereas the Achilla methodology uses revenue less incremental costs, 'starting from the revenue and going backwards', but 'because it's not Achilla's own revenue there is an important assumption there.'[45] She explained this observation further, by saying:

... we can see in the materials that we've been provided that there are differences even in what appears to be a similar product can be charged at different prices on different invoices within the same, you know, similar period. So I think the assumption that prices are necessarily the same is not necessarily true in all instances, so there are examples where the pricing of the same product - or what appears to be the same product on my reading of the face of the invoice is different.[46]

58 In answering 'Key Issue' 3, 'Did APA breach the Second Sale Agreement or any Implied Supply Agreement, and if so how is any loss suffered by Achilla to be quantified?' the Court summarised its conclusion on the 'Methodology for quantification of any loss' by stating:

[1714] With the assistance of the expert evidence given by Ms Dawna Wright and Mr Greg Meredith, I have also found that the appropriate methodology to be adopted for assessing any loss suffered by Achilla is the adjusted Amcor methodology but with total fixed costs recovered from the Amcor volume only. (In other words, the methodology used by the experts to reach the upper half of the Joint Amcor Calculations (which is based on Mr Meredith's Annexure N methodology) is the methodology to be used.)

[1715] Now that I have made my findings in respect of which categories of work can be considered an 'OME supply of Product' that would have been provided to Achilla on a 'business as usual' basis between 21 March 2005 and 31 July 2008, and the methodology to be adopted for the assessment of any loss, in the absence of the parties reaching agreement as to the relevant invoices that reflect such jobs, and/or the quantum of any loss, I propose to appoint an expert under section 65M of the Civil Procedure Act 2010 (Vic) to assist with the process and any calculation or categorisation exercise required to be performed. Once the parties have had an opportunity to consider these reasons, and consult with one another, I will hear from them as to the appropriate form of any order required to be made.

59 Against that background, it is clear that the Court, in its Reasons, has determined the methodology to be used for the determination of Achilla's loss. In my view, on the basis of the material before the Court, the methodology adopted by the Court is the methodology that most closely approximates the D & D methodology in place under the Second Sale Agreement and best enables assessment of the quantum of any loss suffered by Achilla as a result of APA's breach of clause 12.2. The process embarked upon following the delivery of the Reasons, with the assistance of the work performed by the special referee and the joint experts, was one that was directed to arriving at the relevant quantum of Achilla's loss as a result of APA's breach of clause 12.2, using the methodology that the Court had determined should be used.

60 The 'face value of the invoices' method now advanced by the Amcor parties is not one that they propounded at the trial or put to the experts for consideration. Nor is it one that the experts themselves proposed. The 'face value of the invoices' method has some of the hallmarks of a 'first right of refusal' construction argument that the Holihan parties contended for at trial but which was soundly rejected by the Amcor parties.

61 The Amcor parties' rationale for the adoption of their 'face value of the invoices' method appears to be that the experts were proceeding 'sub- optimally' because the information available to them was incomplete, and in those circumstances, the Amcor parties contend that the amount APA paid the alternative suppliers for the work to be done is likely to be a better indication of the quantum of Achilla's loss.

62 I do not share that view, essentially for the reasons advanced by the Holihan parties.

63 The OME jobs in question were, as the Holihan parties observed, jobs which APA had agreed to give to Achilla and for which it had agreed to pay the D & D plus margin price. The Court found that APA breached clause 12.2 of the Second Sale Agreement by not sending the relevant OME jobs to Achilla. Accordingly, the Court must now determine the amount required to compensate Achilla for the lost OME sales, effectively by giving it the price that it would have obtained if the Second Sale Agreement had been complied with. In those circumstances, given the findings made by the Court, particularly those about the D & D pricing mechanism and the obligations imposed by clause 12.2, it is difficult to understand how the pricing for each of those OME jobs, as determined by an alternative supplier who was not bound by the obligations imposed by clause 12.2, could provide a true indication of Achilla's loss.

64 The question of damages is, as the Amcor parties acknowledge, one that is ultimately a matter for the Court, and when it comes to the assessment of damages, the task of the Court is to do 'as best it can' with the information available to it.[47] Adopting that approach, and doing as best the Court can with the information before it, in my view, the appropriate course is for the Court to fix the quantum of Achilla's damages for breach of clause 12.2 at the sum of $2,197,414, arrived at by adopting the methodology applied by the joint experts in their October 2019 report. I note that during the course of oral submissions, counsel for the Amcor parties informed the Court that if the Amcor parties' face value of the invoices submission was rejected then the parties were agreed that the figure the Court should order is the sum of $2,197,414.[48]

65 Accordingly, leaving the issue of interest to one side, Achilla should be awarded damages totalling the sum of $2,430,056.06, comprised of:

(a) $232,642.06 for APA's breaches of clause 12.1 of the Second Sale Agreement in relation to overcharging; and

(b) $2,197,414 for APA's breaches of clause 12.2 of the Second Sale Agreement due to lost OME sales.

66 The Holihan parties seek an award of damages in favour of Achilla totalling the sum of $2,430,056.06, comprised of an amount of $232,642.06 for APA's breaches of clause 12.1 of the Second Sale Agreement in relation to 'overcharging'[49] and a figure of $2,197,414 for APA's breaches of clause 12.2 of the Second Sale Agreement due to lost OME sales,[50] together with interest thereon pursuant to s 60 of the Act. They submit that in the present case s 60 is engaged because Achilla's claim for breach of contract was a claim for damages rather than a claim for debt or for payment of any amount due pursuant to a written instrument.

67 Section 60(1) of the Act provides:

(1) The Court, on application in any proceeding for the recovery of debt or damages, must, unless good cause is shown to the contrary, give damages in the nature of interest at such rate not exceeding the rate for the time being fixed under section 2 of the Penalty Interest Rates Act 1983 as it thinks fit from the commencement of the proceeding to the date of the judgment over and above the debt or damages awarded.

68 The Holihan parties have calculated Achilla's claim for interest as being the amount of $3,086,370.93[51] from 3 September 2007 (when the 'proceeding' commenced) up to and including 25 November 2019, with interest accruing at the rate of $665.77 per day thereafter.

69 As noted earlier, the Amcor parties dispute this approach, contending that interest should run from no earlier than 17 September 2014, and alternatively, as a fall-back position, from no earlier than 20 July 2012 in the case of the overcharging, and from 15 February 2013 in the case of the lost OME sales. The Amcor parties additionally contend that the Court should exercise its discretion to depart from the rate fixed from time to time under s 2 of the Penalty Interest Rates Act 1983 (Vic), and instead apply an interest rate being a rate 2% greater than the RBA cash rate during the relevant period, which they assert is a 'conservatively set' standard commercial rate.[52]

70 The Holihan parties submit that the language of s 60 is mandatory,[53] and that it provides a prima facie rule that the plaintiff is entitled to interest, and a presumption that interest will be allowed from the date upon which the proceeding commenced. Further, they say, if the Amcor parties wish to contend that the Court should depart from that position, the onus is on them to show 'good cause to the contrary',[54] whether as to the period over which interest is to be awarded, or the rate of interest, or both. However, as noted below, there was some adjustment of this position when their post-hearing submissions on proper construction of s 60(1) were filed.

71 The Amcor parties submit that the Court has discretion as to both the time during which interest should be awarded and as to the rate at which it should be awarded (so long as that rate does not exceed the rate in s 2 of the Penalty Interest Rates Act 1983 (Vic)). They point to the language in which s 60(1) is expressed as clearly enabling the Court to depart from its terms where good cause is shown to the contrary, and submit that the expression 'unless good cause is shown to the contrary', means 'no more and no less than good reason, according to the justice of the case, for not allowing interest at all or, if interest is to be allowed, then for not allowing interest for the whole of the period marked out by the section'.[55]

72 At the conclusion of the hearing on 25 November 2019, the Court indicated that it would be assisted by further written submissions from the parties addressing the proper construction of s 60(1). Each of the parties prepared and provided a short outline,[56] and the position has now been reached, post-hearing, with respect to the proper construction, that each accepts that the weight of the authorities favours a construction of s 60(1) whereby in order to enliven the court's power to fix an interest rate lower than the rate fixed from time to time under s 2 of the Penalty Interest Rates Act it is not necessary that 'good cause is shown to the contrary'.[57] That said, the Holihan parties submit that the 'pattern' or 'predisposition' in Victoria has been to award a successful plaintiff interest at the rate prescribed under the Penalty Interest Rates Act unless good cause can be shown.[58] Conversely, the Amcor parties submit that any such statements in the authorities should not be understood as fabricating a constraint that is not found in the text of s 60 itself.[59]

73 In my view, the fundamental principles governing the award of interest by the Court on a judgment for debt or damages were articulated by the Full Court in Clarke v Foodland Stores Pty Ltd.[60]

74 In Clarke, the Full Court (Fullagar, Marks and J D Phillips JJ) considered the construction of s 58(1) of the Act, which is the counterpart provision dealing with the interest to be allowed in a proceeding where a debt or sum certain is recovered. Section 58(1), like s 60(1), addresses two things: the rate of interest and the period over which it is to be allowed. The relevant language of s 58(1) that was under consideration by the Full Court in Clarke is effectively the same as that of s 60(1) under consideration here, and it is well-accepted that the observations made by the Full Court apply equally to s 60.

75 As to the interest rate to be applied, the Full Court in Clarke held that the condition that 'good cause is shown to the contrary' does not apply to the discretion to 'give damages in the nature of interest at such rate not exceeding the rate for the time being fixed under s 2 of the Penalty Interest Rates Act'. In that regard, the Full Court stated:[61]

As we read s 58(1), the general rule is that the court is to allow interest at a rate which is equal to or less than the rate for the time being fixed under s 2 of the Rates Act. Contrary to the liquidator's submission, that power to fix a lesser rate does not depend upon "good cause [being] shown to the contrary"; it depends upon the simple fact that s 58(1) purports to prescribe only a maximum rate. By directing the court to allow interest "at a rate not exceeding" the rate fixed under s 2 of the Rates Act the court is otherwise left at large and, to that extent, has a discretion in the matter. It is, of course, a discretion to be exercised judicially but, by the same token, such a discretion may not be circumscribed by attempts to define what must or must not be taken into account when the discretion falls to be exercised.

76 In Johnson Tiles Pty Ltd and Ors v Esso Australia Pty Ltd and Ors (No 3), by reference to the decision of Full Court in Clarke, Gillard J found:[62]

. . . the determination of the appropriate rate of interest is a question of discretion for the court and does not depend upon establishing good cause to the contrary. These propositions are supported by what the Full Court said in Clarke's case . . .

77 The balance of the authorities which have followed Clarke and Johnson Tiles [No 3] have adopted the construction expounded therein.[63]

78 I note however that, in contradistinction to the construction referred to above, in Bucic v Arnej Pty Ltd (No 2)[64] Zammit J stated that '[t]he qualifier 'unless good cause is shown to the contrary' also operates on the phrase 'from the commencement of the proceeding to the date of judgment'. By reference to her Honour's use of the word also, it may be inferred that her Honour adopted a construction of s 60(1) whereby the good cause qualification operated as a pre-condition attaching to the exercise of both the court's discretion to fix the date from which interest is calculated and to fix the rate of interest to be applied.

79 Regardless of which construction is preferred, there are several statements in the authorities that, as a matter of practice, the penalty rate is the starting point, benchmark or usual rate of interest to be awarded. For example, in Johnson Tiles [No 3], Gillard J stated:[65]

The practice has evolved in this State to apply as a general rule the rate fixed pursuant to the Penalty Interest Rates Act, but clearly the court does have a discretion to fix a lesser rate. The rate fixed pursuant to the Act contains a penalty component and there may be good reasons not to award the total amount of the penalty component or something less.

80 A statement to similar effect was endorsed by the Court of Appeal in Hartley Poynton Ltd v Ali,[66] where, Ormiston JA (with whom Buchanan and Eames JJA agreed) reviewed the history of the interest provisions under the Act, and stated:[67]

[106] Again, in claims for interest under ss.58 to 60 of the Act, the principles so far stated with respect to interest under similar provisions has been generally recognised as requiring no more than compensation for being kept out of the moneys claimed but, so far as Victoria is concerned, the High Court has at least recognised that different considerations may well apply in this State because of the specific provisions contained in the Penalty Act: see Grincelis v. House[68]. Although I do not have sufficient knowledge to speak with certainty as to every other state and territory provision, it would seem that over the years since 1983 the Victorian rate so prescribed has been higher than that applicable in other states and territories and reflects a policy that interest otherwise payable pursuant to statutory provisions, whether under the Act or elsewhere, should, where appropriate, do more than merely place the plaintiff in a position formerly held before the relevant claim was made. Again, speaking in the broadest of terms, the prescribed rate has usually been well in advance of what might be earned by its investment on the money market on a conservative basis, whether at short term or long term rates, and, more often than not, is in excess of what might be expected to be obtained by way of return on other conventional investments. On the other hand, it has usually been some points below the current mortgage and overdraft rates. The Penalty Act's object, as I perceive it, has been in part to encourage the early settlement of litigation (cf. Grincelis at 329), but it may be seen to have the broader purpose of ensuring that recalcitrant defendants, owing money or otherwise subject to an award of damages, do not withhold payments properly sought by plaintiffs upon the selfish basis that in the meantime they may without risk invest moneys so owed in a manner which will give them not merely sufficient to repay successful plaintiffs with interest under the Act but with an element of profit which might fairly be perceived as wrongfully obtained. This has ordinarily given Victorian courts a degree of flexibility in relation to the payment of interest which may not exist in other jurisdictions where the relevant rates are only broadly sufficient to recompense plaintiffs for being kept out of their money while their actions are fought or delayed, as frequently used to occur.

[107] Nevertheless the pattern in Victoria has been that, unless good cause be shown, successful plaintiffs are ordinarily awarded interest at the rate prescribed under the Penalty Act without too fine a regard for these distinctions and I would assume that the plaintiff in the present case is entitled, at the least, to interest on the moneys invested and ordered to be repaid, although that would bring in a sum in excess of what it might have been invested at, as the quotation from Clarke suggests. The seemingly more difficult issue is whether the rates prescribed by the Penalty Act should be awarded on top of the damages reflecting the various loss of opportunities which formed a significant part of the primary judgment sum awarded to the plaintiff. Here again I would see no reason ordinarily to deprive a party of interest at the rates prescribed unless it was unfair to do so and in particular unless it could be shown that there was in effect double counting by awarding interest on those damages.

81 The Amcor parties acknowledge that there are such statements in the authorities, but they submit that 'those statements should not be understood as fabricating a constraint that is not to be found in the text of s 60 itself'.[69] In so doing, they cited the observations of Connock J in the recent decision in Weatherbeeta Limited v Hammersmith Nominees Pty Ltd Pty Ltd (No 2).[70]

82 In Weatherbeeta [No 2], Connock J made reference to the observations of the Court of Appeal in Hartley Poynton, and of Vickery J in Hodgson v Amcor Ltd (No 9)[71] which were to similar effect, stating:

In Hodgson,[72] Vickery J observed that the 'settled practice in Victoria' is that the 'statutory maximum' is used unless a good reason otherwise is shown:

However, the settled practice in Victoria is that, unless good cause to the contrary is shown, the statutory maximum rate is used. In Hartley Poynton Ltd v Ali Ormiston JA reasoned: 'The pattern in Victoria has been that, unless good cause be shown, successful plaintiffs are ordinarily awarded interest at the rate prescribed under the Penalty Act without too fine a regard for these distinctions'.[73] In Johnson Tiles Gillard J likewise observed: 'The practice has evolved in this State to apply as a general rule the rate fixed pursuant to the Penalty Interest Rates Act ...'.[74] The statutory rate was described as a 'benchmark' by Fullagar, Marks and J.D Phillips JJ in Clarke v Foodland Stores Pty Ltd[75] and in Kalenik v Apostolidis (No. 2) Hargrave J said to like effect: 'As a general rule, the starting point is the penalty rate ... the penalty rate is routinely awarded by the Court'.[76]

83 However, Connock J did not accept the submission that the 'settled practice' in Victoria was the awarding of interest at the penalty rate. His Honour stated:[77]

. . . [T]o the extent that it was submitted by Bates Australia that a 'settled practice' in Victoria of awarding interest at the penalty rate necessitates following such a practice in this case, I do not accept that submission. As mentioned, the discretion is to be exercised having regard to the particular circumstances in question - as has occurred in all of the authorities in which reference has been made to the existence of a particular practice or approach in Victoria.

84 In my view, the labels which have been ascribed to the task to be performed by the Court when determining the applicable interest rate tend to distract from the task at hand. When the wording of s 60(1) is examined, it will be seen that the penalty rate is the only interest rate to which explicit reference is made - which is a maximum rate - and it is in that sense that the penalty rate may be regarded as providing a useful starting point for the inquiry to be undertaken by the Court. Indeed, as Hargrave J noted in Kalenik v Apostolidis (No 2), in practice, unless the defendant seeks to argue for a lesser rate, the penalty rate is the rate routinely awarded by the Court.[78] With that starting point in mind, however, each case must be assessed by reference to its individual facts and circumstances. The Court must exercise its discretion judicially and fix an interest rate in accordance with the terms of s 60(1) and by reference to the facts and circumstances the individual case, so as to further the purposes of an award of interest (discussed below) and accord justice to the parties.

85 I turn next to consider the discretion in s 60(1) as to the date from which interest is calculated. The Full Court in Clarke, having reviewed the legislative history of the interest provisions and the relevant case law, stated:[79]

. . . Accordingly, we think that, once good cause has been shown to the contrary, the court should not only be regarded as free of the injunction to allow interest according to the terms of s58(1) (so that in a proper case interest may be refused altogether); the court should also be regarded as authorised, by implication, to allow interest otherwise than in accordance with those terms.

This does not mean, however, that the court is then wholly at large; for the court cannot by virtue only of s58 allow interest on terms more onerous to the defendant than those spelled out in the section.

. . .

Thus, when good cause is shown, the court may refuse to award interest at all or may, if it sees fit, award interest on terms which are less, but not more, onerous than those laid down by the section. As the court always has a discretion as to the rate (subject only to the maximum imposed by s58), this means, in effect, that once good cause is shown, the court may allow interest to the plaintiff for a lesser period than that marked out by the section - as, indeed, was done in David Leahey's Case.[80] And it follows, we think, that "good cause to the contrary" means no more and no less than good reason, according to the justice of the case, for not allowing interest at all or, if interest is to be allowed, then for not allowing interest for the whole of the period marked out by the section.

What is "good cause" in any given case will therefore depend upon the particular facts and circumstances and it would be unwise to attempt to put any gloss on the expression. . . . The question of interest cannot be said to be wholly a matter of discretion, as is the case with costs; for the injunction laid down by s58(1), to allow interest according to its terms, must be followed unless good cause is shown otherwise. But this should be understood as meaning no more than that the course charted by the section should be followed unless, for good reason, the court is satisfied that some other and lesser course should be followed.

86 In my view, any invocation of 'good cause to the contrary' by a defendant seeking to free the Court of the obligation imposed by s 60(1), falls to be considered against the background of the acknowledged purposes of an award of interest by the Court, and by reference to the facts and circumstances of the particular case.

87 The objective or purpose of an award of interest was explained by Gillard J in Johnson Tiles [No 3], as follows:[81]

There are three main objectives of the award of interest. First, as compensation to the judgment creditor for being out of the funds from the date of commencement of the proceeding until judgment; secondly, to deter judgment debtors from delaying proceedings and thereby having the use of the money for a longer period; and finally, to encourage defendants to make realistic assessments of their liability in a case and to take bona fide steps to compromise the claim.

88 His Honour's statement of purposes was endorsed by Hargrave J in Kalenik v Apostolidis [No 2].[82]

89 In Johnson Tiles [No 3], Gillard J noted that s 60(1) fixes the date from which interest commences as the date when the proceeding is instituted, citing Braeside Bearings Pty Ltd v H J Brignell and Associates,[83] but his Honour continued, stating that '[i]t is open to a judgment debtor to contend that interest should not be awarded at all, or that it should be awarded at a lesser rate and from a date other than the commencement of the proceeding.'[84] His Honour then proceeded to instance 'delay' as a relevant factor, and referred to the Full Court's observations in Clarke concerning delay, set out below, as being 'apposite to an application under s 60(1) for an award of interest':[85]

Nothing put by counsel served to persuade us that delay on the part of a plaintiff, subsequent to the date from which interest might be allowed under s 58, is always irrelevant in allowing interest under that section. If, as we have said, interest is to be awarded, not to punish the defendant, but to compensate the plaintiff for being deprived of his money and the discretion arising out of the words "unless good cause is shown to the contrary" is to be seen as existing in order to relieve against injustice to the defendant, the question will be whether the plaintiff's delay, such as it is in a given case, is seen as working such injustice, were the plaintiff to be allowed interest for the whole of the period available under s 58. On that issue, each case must turn upon its own facts and circumstances.[86]

90 While acknowledging that delay may be a relevant consideration, Gillard J nevertheless was of the view that 'in practice delay is rarely a justifiable basis for refusing interest for any period, because of the self-evident observation that the defendants have had the use of the money since the commencement of the proceeding.'[87]

91 In the recent decision in AHRKalimpa Pty Ltd v Schmidt (No 4),[88] Elliott J, after reviewing the authorities and the terms in which s 60 is expressed, stated:

[12] As the words of s 60 make plain, it is "a prima facie rule" that the plaintiffs are entitled to an award of interest from the commencement of the proceeding to the date of the judgment, over and above the amount awarded in "damages",[89] unless the defendants can show good cause to the contrary.[90] If there is no good cause to the contrary, the court "must" give damages in the nature of interest.[91] Thus, the onus is on the defendants to show good cause,[92] but such onus does not include the burden of being required to adduce evidence themselves.[93]

[13] In this context, "to the contrary" means "for not allowing it."[94] . . .

[14] When determining whether a "good cause" exists, the discretion is not "intended to be directed to penalising the plaintiff but to alleviating the defendant in a proper case".[95] Nor should it be seen as diminishing the culpability or wrongdoing of the defendant. Instead, it serves to relieve the defendant against any injustice.

[15] A court may be asked to determine whether a "good cause" exists in instances where a plaintiff has delayed in bringing its case to trial. . . . However, it has also been held in other circumstances that delay did not constitute "good cause" and that the "protracted and unwarranted delay on the part of the plaintiff" showed nothing in the way of disadvantage to the defendant, beyond the defendant "being called upon to pay interest for a period of use of the plaintiff's money longer than the plaintiff needed to allow to continue".[96]

. . .

[17] If "good cause" can be shown, the court is authorised to disallow interest entirely, or, allow interest for a lesser period than that specified in the statute.[97]

92 His Honour found that, in the circumstances of the case, the defendants had not shown good cause as to why the plaintiffs should be deprived of damages in the nature of interest.

93 As noted earlier, the Holihan parties claim interest on the damages award from the commencement of the 'proceeding', being the principal proceeding that was commenced on 3 September 2007, when the Amcor parties filed a writ against Mr Trevor Barnes. In this regard, they rely upon Lord Buddha Pty Ltd v Harpur [No 2] where Robson J awarded interest on a counterclaim by reference to the date of the originating motion for the proceeding because 'the means or the vehicle by which the subject matter of the dispute was brought before the court for adjudication was the originating motion'.[98]

94 The Amcor parties acknowledge that '[i]t is well established that the text of s 60(1) directs attention to when the proceeding commenced, not to when the particular claim was raised.'[99] But they contend that where the relevant proceeding is the counterclaim, which is, in law, wholly separate from a claim, the issue of a writ is in no relevant sense a vehicle for the bringing of the counterclaim. Accordingly, the Amcor parties contend that the decision in Lord Buddha 'is plainly wrong and should not be followed.'[100] Further or alternatively, they submit it would not be just to award interest from the issue of the writ when the counterclaim was not even on foot, observing that none of the purposes of an award of interest would be served by that course.[101] They do accept, however, that under the Rules, any amendment to the counterclaim is taken to have been made at the time when the counterclaim was commenced.[102]

Amcor parties contend that good cause to the contrary has been shown

95 In the present case, the Amcor parties rely upon the material set out in the McCudden affidavit as demonstrating 'good cause' as to why the course charted by s 60(1) should not be followed, because an award of interest covering the whole of the period from commencement of the proceeding at the penalty rates would produce an outcome that is unfair and unjust.

Agreed procedural chronology regarding Achilla's counterclaim

96 As noted earlier, just prior to the hearing on 25 November 2019, the Holihan parties filed the Humphris affidavit in response to the McCudden affidavit and matters raised in the Amcor parties' reply submissions. In essence, the Humphris affidavit sought to flesh out the detail of the chronology of events as presented in the McCudden affidavit.

97 At the hearing, the Court requested that the representatives of the parties consult and agree upon a (consolidated) procedural chronology for the counterclaim. On 9 December 2019, the parties jointly provided the agreed procedural chronology, summarising the history of events pertaining to the counterclaim as set out in the McCudden affidavit and the Humphris affidavit.

98 Relevantly, the agreed procedural chronology makes clear that the counterclaim was not filed by Achilla until 21 January 2008, which was more than four months after the proceeding was issued. At that point, Achilla's claim was one made against ACB Co Vendor only, for damages for breach of clauses 12.2 and 12.3 of the Second Sale Agreement, expressed as follows:[103]

1. [ACB Co Vendor] has not purchased or procured the supply of all its OME supplies from [Achilla] and has purchased or procured supplies of products from parties other than [Achilla], particulars will be provided following discovery.

1. In breach of clauses 12.2 and 12.3 of the Second Sale Agreement [ACB Co Vendor] has failed to verify and confirm the basis of its D&D costing and to ensure that the costing applied to products supplied pursuant to the Second sale Agreement to [Achilla] is a true and accurate reflection of its D&D costs. Particulars will be provided following discovery.
2. By reason of the breaches of the Second Sale Agreement by [ACB Co Vendor] [Achilla] has suffered loss and damage. Particulars will be provided following discovery.

99 Further and better particulars of the counterclaim were provided by Achilla on 2 May 2008.[104] On 4 October 2010, Achilla filed an amended counterclaim, in which it joined APA as a second defendant.[105] Therein, for the first time, Achilla pleaded the entry into the Deed of Accession in March 2005 (whereby APA was substituted for ACB Co Vendor in all its capacities under the Second Sale Agreement) and alleged breaches of the clause 12.2 purchase obligation by APA (from 21 March 2005 until the end of the Claim Period), and also pleaded the alleged overcharging by APA on the products supplied to Achilla pursuant to clause 12.1 (following entry into the Deed of Accession).

100 The trial of the principal proceeding before Vickery J commenced on 30 March 2011[106] and was completed on 1 August 2011. When the trial of the principal proceeding commenced, it was scheduled to include the hearing (on 25 and 26 July 2011) of the Achilla counterclaim.[107] During the course of the trial of the principal proceeding, on 18 May 2011, and again on 22 June 2011, his Honour raised the possibility of deferring the hearing of the counterclaim, [108] observing to the effect that because the issues in the case had expanded rather than contracted, it was putting the hearing of Achilla's counterclaim in that period in late July in a difficult position. Then, on 28 June 2011, in circumstances where his Honour had earlier raised a difficulty with hearing the counterclaim in the time available, Senior Counsel for the Holihan parties informed the Court that 'we accept that it's sensible that it should go off' and 'probably until Your Honour's determination of this matter.'[109] His Honour then indicated that he would make a direction that the counterclaim be adjourned sine die, and on 29 June 2011, he made orders accordingly.

101 Justice Vickery delivered his reasons for judgment in the main proceeding on 20 March 2012.[110] On 18 May 2012, Achilla filed a second amended counterclaim, [111] which made only minor amendments. On 20 July 2012 Achilla provided further and better particulars of the alleged overcharging by APA, as follows:[112]

The prices charged by APA to Achilla for products during the period exceeded the prices prescribed by clause 12.1 of the Second Sale Agreement in the manner set out in the attached schedule, and with the following effect:

102 On 31 July 2012, Achilla filed, for the first time, further particulars in support of its claim regarding breaches of clause 12.2 of the Second Sale Agreement in respect of OME work that was performed by alternative suppliers other than the Le Breton companies (namely J S Cutting, Northwest Packaging, SPS Packaging, Thompson Screen Printing, Sainsburys, and All Pack).[113] Achilla filed an amended version of the particulars on 21 August 2012 which included reference to the OME work performed by Le Breton.[114] On 1 October 2012 Achilla served on the Amcor parties an amended schedule to those particulars.[115]

103 Meanwhile, on 24 September 2012, the Amcor parties filed their response to the Holihan parties 21 August 2012 particulars, in which they alleged, for the first time, that purchases made by Amcor Displays were not within the Second Sale Agreement.

104 On 15 February 2013, Achilla served on the Amcor parties particulars of paragraph 6 of the second amended counterclaim (being its claim for breach of clause 12.2 of the Second Sale Agreement), in respect of both quantum and liability.[116]

105 On 26 April 2013, pursuant to leave given by Vickery J, the Holihan parties filed a third amended counterclaim, in which they pleaded, for the first time, their 'implied supply agreement' claim and a claim for the release of the Charge given by Achilla in favour of ACB Co Vendor and APA.[117] On 3 May 2013, Achilla served on the Amcor parties revised (liability) particulars in which the amendments were limited to those flowing from the third amended counterclaim.[118] On 7 June 2013, the Amcor parties filed their response to the Holihan parties' liability particulars of paragraph 6 of the third amended counterclaim.

106 On 8 July 2013 the Amcor parties filed their amended defence to the third amended counterclaim, and pleaded, for the first time, their cross-claim (seeking damages for alleged breaches of a change of control provision set out in clause 16.4 of the Second Sale Agreement). The Holihan parties filed their amended reply to the amended defence to the third amended counterclaim and defence to cross-claim on 25 October 2013.

107 In around late October 2013, the Amcor parties foreshadowed making an application to stay the counterclaim pending the hearing and determination of their appeals in the main proceedings. A directions hearing was held before Vickery J on 19 December 2013, at which the Amcor parties outlined the basis for them seeking to have the appeals in the main proceeding heard before the counterclaim progressed.[119] The Holihan parties informed the Court that they wished to have these matters determined expeditiously, but observed that 'if the appeal is to be heard first and can be heard expeditiously then they see value in the counterclaim being stayed.'[120] His Honour adjourned the directions hearing sine die and directed the parties to have the matter listed before the Court of Appeal.[121] That did not occur until 13 March 2014, when the Amcor parties sought to have the counterclaim stayed pending the hearing and determination of the appeals. The Court of Appeal refused that application.[122]

108 Following the Amcor parties' unsuccessful application to the Court of Appeal, Vickery J made orders on 17 September 2014 establishing a timetable for the filing of material relevant to the conduct of the counterclaim.[123]

109 On 16 February 2015, the Holihan parties filed a fourth amended counterclaim.[124] On 13 March 2015,[125] Vickery J made orders in preparation for the trial of the Achilla counterclaim and the Amcor parties' cross-claim.[126] The trial of the counterclaim and cross-claim commenced on 25 May 2015.

110 The foregoing summary identifies the major procedural steps pertaining to the counterclaim. It does not purport to be exhaustive and does not replace the agreed procedural chronology prepared by the parties, or the documents exhibited to the McCudden and Humphreys affidavits to which the Court has had regard.

111 In the present case, the only claim for damages for breach of clauses 12.1 and 12.2 on which Achilla succeeded was the claim brought against APA pursuant to the Deed of Accession. Notwithstanding that Achilla was a party to the Deed of Accession,[127] and must be taken to have been aware of its contents at all relevant times, the claim against APA was brought for the first time on 4 October 2010,[128] when Achilla filed its amended counterclaim, in which it joined APA as a second defendant.[129] It was also at that time that Achilla first pleaded its overcharging claim against APA.

112 Section 60(1) permits the Court to depart from its terms where 'good cause is shown to the contrary'. I am satisfied that, in the circumstances of this case, good cause to the contrary has been demonstrated and that it is appropriate for the Court to be freed from the obligation imposed by its terms, thereby enlivening the Court's discretion to fix the period for which interest is to be awarded.

113 In my view, having regard to the objective or purpose of an award of interest, it would not be appropriate for interest to be awarded on the damages payable by APA in favour of Achilla from any point in time prior to the joinder of APA. That is because, prior to APA being joined as a defendant to the counterclaim, it could not relevantly be said that Achilla has been 'kept out of its money' or 'deprived of its use' by APA as there was no claim on foot against it. Moreover, as the Amcor parties noted in their reply submissions,[130] in the case of 172 of the OME jobs that Achilla claimed were performed by alternative suppliers in breach of APA's clause 12.2 obligation, and for which APA is found to have been in breach, the work the subject of those OME jobs took place at a point in time after the date when the proceeding was commenced, being 3 September 2007.

114 In oral submissions, the Holihan parties sought to downplay the relevance of the fact that ACB Co Vendor and APA are separate legal entities. Senior Counsel for the Holihan parties acknowledged that APA was not initially a defendant to the counterclaim, stating:[131]

[MR MAIDEN QC:] It is true that APA only became a party to the counter-claim from October 2010. It had, of course, previously been a party to the proceeding itself from May 2010. And we have to bear in mind that an amendment takes effect from the date of the originating process, not the date of the amendment.[132]

. . . in the ordinary course we accept that it might be that the second and third principles identified by Justice Gillard in Esso [Johnson Tiles [No 3]] might be affected by the fact that a party hadn't been joined from the commencement of the proceeding - that is, as Your Honour, with respect, pointed out, how might it be said that a party could've been deterred from delaying a proceeding, or encouraged to make a realistic assessment of its prospects in a proceeding at any date prior to when it had become a party to the proceeding, notwithstanding the date at which the joinder related back to.

But that's - but this is not the usual case. Because here we have to remember that APA is the parent of the original defendant - that is, the defendant that it was joined to replace - and that both are members of the larger Amcor group. The two companies, of course, share at least one common director and a common company secretary in Mr Ian Lewis - or, that is, they shared them at the relevant times. And he was, of course, also the moving party behind the deed of accession, at least insofar as Mr Holihan was concerned.

They were represented by common lawyers, both internally, so far as we know, and external solicitors. And both APA and ACB Co Vendor were aware of the deed of amendment - deed of accession at all material times, and therefore knew the material facts that ultimately led to Your Honour finding APA to be liable. And so in those particular circumstances ‑ ‑ ‑

HER HONOUR: Sorry, Mr Maiden. So was Mr Holihan.

MR MAIDEN: Yes.

115 Senior Counsel for the Holihan parties then continued, submitting that the late joinder of APA was 'immaterial' and of no application in the present case, as follows:[133]

MR MAIDEN QC: It's immaterial, that's right. Because if there was a shared misapprehension that the ACB Co Vendor was the correct party, and not APA, it was the case that APAs management and APAs lawyers knew of the facts in the same way that the Holihan parties did. And had the APA parties' management and lawyers turned their minds to the fact at any time before the joinder, they would've realised it, as, indeed, they eventually did.

So the consequence is, any consequence that might've moved ACB Co Vendor to deter from delay or make an assessment of the prospects of the claims that were ultimately made against APA, could have been considered at any time before APA was joined. And so while we accept that the proposal that Your Honour puts as a general principle might, with respect, have merit, it doesn't apply to the facts of this case.

116 Counsel for the Amcor parties responded, by rejecting that position, stating:[134]

[MR TRAN:] In my submission, all that the Amcor parties needed to consider before APA was joined was that ACB Co Vendor, which by then was something close to a shell - . . .

But effectively it wasn't doing anything, because the bulk of its business had been sold to the Holihan interests. All that the Amcor parties could have considered prior to APA being joined was that for whatever reason, Mr Holihan was bringing this proceeding against ACB Co Vendor.

Mr Maiden asserts that APA should have factored in the prospect that - well, the likelihood or the prospect - that Mr Holihan would sue APA in due course. But the facts about the deed of accession were known to Mr Holihan, just as they were to - one may assume - to people in Amcor. And yet Mr Holihan hadn't sought to bring that, of course. So, in my submission, the attempt by Mr Maiden to rebut any good cause on the basis that APA was not a party prior to 2010 should not be accepted.

I think I do have to accept, in fairness to Mr Maiden's position and my submissions before lunch, it's not determinative in the exercise of Your Honour's discretion that APA was not a party prior - a formal party - prior to that date in 2010, because, as Your Honour will recall, my submission has been that Your Honour takes into account everything, . . .

117 In my view, the belated joinder of APA to the counterclaim is not 'immaterial'. Rather, in the present case it is a relevant circumstance for the Court to have regard to and consider along with other particular features of the case, in the context of fixing the period from which interest commences to run. I do not agree with the notion advanced by the Holihan parties that APA should have 'factored in the prospect' that Mr Holihan would sue APA in due course, and have proceeded on that basis in advance of the joinder. However, once APA was joined as a second defendant on 4 October 2010, and the breaches of the clause 12.2 purchase obligation and the clause 12.1 overcharging allegations were pleaded against APA, the objective or purposes underlying an award of interest on damages were enlivened. In my view, from that point forward APA was on notice of the substance of the claims made against it, and even though it did not have all of the 'fleshed out' detail that was later provided on 15 February 2013 (in the case of the clause 12.2 claim) and on 20 July 2012 (in the case of the overcharging claim), it was in a position to commence analysing and making a realistic assessment of its liability in respect of the claims against it, with a view to taking bona fide steps towards resolving the dispute.

118 Turning then to the alleged 'delay' in prosecuting the counterclaim proceeding, once APA was joined as a defendant, the 'delay' encountered in having the counterclaim heard cannot, in my view, be routed home solely to the Holihan parties as a disentitling factor. Having reviewed the agreed procedural chronology and the underlying materials, I am not satisfied that the alleged delay was a delay caused by them or of their own making, but in any event, as Gillard J observed in Johnson Tiles [No 3], the defendants have had the use of the money for the whole of that time.

119 In those circumstances, good cause to the contrary having been shown, in my view it is appropriate that interest should run on the damages award from 4 October 2010, being the date when APA was joined as a second defendant and the relevant breaches were pleaded against it. For completeness, I note that no issue of GST arises, Senior Counsel for the Holihan parties having confirmed that both the overcharge claim and the lost OME sales claim were pleaded as claims for compensation, for which Achilla seeks an award in the nature of compensatory damages for breach of contract.[135]

120 Accordingly, I will award Achilla damages in the nature of interest pursuant to s 60(1) of the Act on both the sums awarded as damages for the lost OME claim (breach of clause 12.2) and on the overcharge claim (breach of clause 12.1), from 4 October 2010.

121 The Court's discretion as to what is the appropriate rate is framed in s 60(1) in terms of giving damages in the nature of interest 'at such rate not exceeding the rate for the time being fixed under s 2 of the Penalty Interest Rates Act 1983 as it thinks fit'. Relevantly, in Clarke, when addressing the discretion as to the rate, the Full Court stated:[136]

By directing the court to allow interest "at a rate not exceeding" the rate fixed under s 2 of the Rates Act the court is otherwise left at large and, to that extent, has a discretion in the matter. It is, of course, a discretion to be exercised judicially but, by the same token, such a discretion may not be circumscribed by attempts to define what must or must not be taken into account when the discretion falls to be exercised.

122 In Hartley Poynton, the Court of Appeal stated that the Victorian rate so prescribed (under the Penalty Interest Rates Act for the purposes of s 60(1)) 'reflects a policy that interest otherwise payable pursuant to statutory provisions, whether under the Act or elsewhere, should, where appropriate, do more than merely place the plaintiff in a position formerly held before the relevant claim was made.'[137] Further, the Court observed that in Victoria the prescribed rate 'has usually been well in advance of what might be earned by its investment on the money market on a conservative basis, whether at short term or long term rates, and, more often than not, is in excess of what might be expected to be obtained by way of return on other conventional investments.'[138]

123 In the present case, the Court's task in exercising its discretion is, as I have said, to fix an interest rate, in accordance with the terms of s 60(1) and by reference to the individual facts and circumstances of the case, which responds to and addresses the acknowledged purposes of an award of interest.

124 The Holihan parties acknowledge that the rate is a matter of judicial discretion and they submit that the Court should follow the Victorian 'pattern' or 'predisposition' and award interest on the damages at the rate(s) applicable from time to time under the Penalty Interest Rates Act.

125 The Amcor parties sought to have the Court exercise its discretion to vary the rate of interest awarded from the rate(s) applicable from time to time under the Penalty Interest Rates Act to a lesser rate. They submit that interest should be awarded at a standard commercial rate, conservatively set at around 2% greater than the RBA Cash rate applicable for the relevant period.[139] Relevantly, the Amcor parties contend that, in circumstances where the present case is 'far from the typical proceeding', a commercial rate should be awarded for the following reasons:[140]

(a) The Holihan parties would have the Court award more than $3 million in interest on a case in which the face value of OME supplies made by alternative suppliers which were found in their favour was $1.29 million;

(b) The nature of the expert evidence and calculations included within the expert reports was such that no party could take the face value of any group of OME invoices from alternative suppliers and readily form a view as to what loss would flow from such invoices. This is evidenced by the position of the Holihan parties to the effect that for jobs with invoices of a value of $1.29 million (GST exclusive) they should be paid almost $2.2 million plus a further $3 million in interest. It should be remembered these are jobs that were performed by other parties at a cost to Amcor of $1.29 million.

(c) The Holihan Parties' original claim was for loss on 1913 OME invoices totalling approximately $7.8 million. Following the various process of the Principal Judgment, the further rulings, the reports of Mr Mines and importantly the decision as to Displays in June 2019, the number of invoices were reduced to less than 420 and the face value approximately $1.29 million (GST exclusive). The substantial number of OME invoices that formed part of the original claim and which had to be considered was a significant reason this position has taken five years since the orders of September 2014 were made by Justice Vickery. Of those invoices Achilla has been successful in just over 20%.

(d) The delays were not caused by the Amcor Parties. They have put proposals as to how this could most efficiently be conducted. They have made concessions on the remaining contested invoices, they have been successful in respect of almost 80% of the invoices originally claimed in the counterclaim.

(e) The initial delays in the Holihan parties conducting the counterclaim so it could be prepared and made ready for a trial is outlined above and is the basis for the submission that no award of interest should be made until the orders of September 2014. However, to award a penalty interest rate for the five years following that date would result in an unjust penalty on the Amcor Parties and result in an amount that is excessively greater than appropriate to compensate the Holihan Parties. The objectives to ensure they are properly compensated for being out of any money is most fairly achieved by an award of interest on a commercial rate for the five years following the orders of September 2014. A rate using the RBA cash rate published plus 2% is appropriate to adopt a compensatory rate of interest rather than imposing any penalty component upon the Amcor Parties.

126 Having considered all of the matters advanced by the Amcor parties, in the context of the facts and circumstances of the particular case, I am not satisfied that there is any reason to award interest on the damages payable to Achilla at other than the penalty rate(s) applicable from time to time under s 60(1).

127 The Amcor parties acknowledge at the outset that the question of the appropriate rate of interest is intertwined with the question of the appropriate time periods for any interest to be awarded.[141] In the present case, the Court has found that, good cause to the contrary having been shown, it is appropriate that interest should run on the damages awarded to Achilla from 4 October 2010 (when APA was joined as a defendant and the relevant breaches were pleaded against it) rather than from 3 September 2007 (when the principal proceeding was commenced).

128 Once the Court determines to award interest, the terms of the award reflect the exercise of the Court's discretion by way of response to, and addressing, the policy considerations or objectives which underlie and inform the exercise of the discretion. In the present case, in determining to award interest to Achilla, the Court has recognised that from 4 October 2010 Achilla was effectively kept out of the proceeds of the lost OME work and the amounts it had been overcharged by APA, and as such it is entitled to be compensated, but the question remains as to what is the appropriate rate.

129 The obligations imposed on Achilla under the Second Sale Agreement were onerous. Relevantly, in the Reasons the Court found that:[142]

[1037] . . . Under clause 12.2 Achilla was effectively required to keep itself ready, willing and able to supply product to the Amcor parties as and when required, but no minimum (or indeed, maximum) supply condition was specified. In effect, Achilla was required to establish and maintain a ready capacity to supply, and thus it would have to incur all of the fixed costs necessary to have that capacity available to be called on. Achilla had no assurance that it would be called on, but when it was required to perform OME work at the request of the Amcor parties, it could charge only (or no more than) the amount determined by the PICK system using the D & D costing. In those circumstances, it was both reasonable and commercial that the fixed costs associated with establishing the capacity to perform the OME work required by the Amcor parties would be recoverable from that work alone. . . .

130 In the context of the lost OME work that was performed for APA by the alternative suppliers during the Claim Period, the position is that Achilla was ready, willing and able to perform that OME work but was denied the opportunity to do so, in breach of the agreement. That position entailed the consequence that Achilla had to incur all of the fixed costs necessary to have the capacity available to be called on by APA, but because it was not called upon to perform the lost OME work, Achilla was denied the opportunity to charge the (agreed) D & D pricing amounts for that work and thereby recover its costs.

131 The damages amount to be awarded to Achilla to compensate it for that lost OME work is $2,197,414, but the Court has recognised that Achilla has effectively been kept out of those proceeds since 4 October 2010 when it made its claim against APA. In the case of the clause 12.1 overcharge claim, the position is that APA overcharged Achilla $232,642.06, and Achilla has likewise effectively been kept out of that amount since 4 October 2010.

132 The Amcor parties have again pointed to the delays that attended the counterclaim, contending that delay is a factor that has to be taken into account in all the circumstances of the case. The Court has found that the delays encountered in having the counterclaim heard cannot be routed home solely to the Holihan parties as a disentitling factor. As I have said, I am not satisfied that the alleged delay was caused by them or of their own making, but in any event, the Amcor parties have had the use of the total amount of $2,430,056.06 for the whole of that time.

133 When viewed against that background, and having regard to the circumstances of the particular case, I am not persuaded that an award of interest at a standard commercial rate, conservatively set at around 2% greater than the RBA Cash rate applicable for the relevant period is likely to meet the objectives or purpose of an award of interest. The rate proposed by the Amcor parties is, as the Holihan parties submitted, an entirely arbitrary one,[143] and as such, in my view, it does not address the particular circumstances of this case. The Amcor parties acknowledge that the objectives of the award of interest are to ensure that the wronged party is properly compensated for being kept out of their money. In my view, if interest is awarded to Achilla at the penalty interest rate(s) from 4 October 2010, that objective will be achieved without imposing any unjust penalty on the Amcor parties.

134 Further, in my view, the comparison the Amcor parties seek to draw between, on the one hand, the amount of interest (if awarded at the penalty rates for the whole of the period from commencement of the principal proceeding) and the face value of the OME supplies made by the alternative suppliers does little, if anything, to inform the exercise of the Court's discretion. By allowing the alternative suppliers to perform the OME work, APA acted in breach of clause 12.2 and in so doing it denied Achilla the opportunity to perform that work and recover its costs. As the Full Court noted in Clarke, the interest is being awarded to compensate the plaintiff for being deprived of its money, not to punish the defendant. And as will be apparent, with the attenuation of the relevant period for which interest runs, from 3 September 2007 to 4 October 2010, even if interest is awarded at the penalty rates, the amount of interest payable will be significantly reduced.

135 In all the circumstances, in the exercise of the discretion conferred on the Court, I propose to award interest on the amount of the damages award at the penalty rate(s) applicable from time to time under s 60(1).

136 In summary, the conclusions reached by the Court are as follows.

137 In respect of Achilla's claim for damages for APA's overcharging as a result of the breaches of clause 12.1 of the Second Sale Agreement, Achilla should be awarded damages of $232,642.06.

138 In respect of Achilla's claim for damages for lost OME sales as a result of APA's breaches of clause 12.2 of the Second Sale Agreement, the Court, doing the best it can with the information before it, has determined that the appropriate course is for it to fix the quantum of Achilla's damages at the sum of $2,197,414, arrived at by adopting the methodology applied by the joint experts in their October 2019 report.

139 The Court has found that Achilla is entitled to an award of damages totalling the sum of $2,430,056.06, comprised of the overcharging amount of $232,642.06 and a sum of $2,197,414 for the lost OME sales, together with interest thereon pursuant to s 60 of the Act. Accordingly, interest should be calculated on the sum of $2,430,056.06.

140 In the present case, the Court has found that, good cause to the contrary having been shown, it is appropriate that interest should run on the damages awarded to Achilla from 4 October 2010 (when APA was joined as a defendant and the relevant breaches were pleaded against it) rather than from 3 September 2007 (when the principal proceeding was commenced).

141 As to the rate of interest, the Court has determined, in the exercise of its discretion, to award interest on the amount of the damages award at the penalty rate(s) applicable from time to time under s 60(1).

142 I will hear from the parties as to the precise form of the appropriate orders for judgment and the separate orders dealing with matters such as the adoption of the joint experts' reports and the timetable for the hearing as to the question of costs.

(FORMERLY AMCOR PACKAGING (AUSTRALIA) PTY LTD) (ACN 004 275 165)

SPECIALTY PACKAGING GROUP PTY LTD (FORMERLY SERVICE CONTAINERS PTY LTD) (ACN 005 319 666)

AUSTRALIAN CORRUGATED BOX CO PTY LTD (FORMERLY ACHILLA PTY LTD)

AUSTRALIAN CORRUGATED BOX CO PTY LTD (FORMERLY ACHILLA PTY LTD)

(FORMERLY AMCOR PACKAGING (AUSTRALIA) PTY LTD) (ACN 004 275 165)

(FORMERLY AMCOR PACKAGING (AUSTRALIA) PTY LTD) (ACN 004 275 165)

AUSTRALIAN CORRUGATED BOX CO PTY LTD (FORMERLY ACHILLA PTY LTD)

[1] Much of this background summary first appeared in Ruling No 3, but it is reproduced here for convenience.

[3] The relevant exception or 'carve out' is contained in clause 12.2 of the Asset Sale Deed dated 2 June 2003 (described in the Reasons as the 'Second Sale Agreement') at CB1492. The carve out is expressed in the following terms: _'_other than due to Achilla's inability to supply consistently and on a basis which is commercial and reasonably acceptable in terms of price, quality and availability'.

[4] [2018] VSC 21 ('Ruling No 1').

[5] See paragraph 7(a) of Annexure B to the 6 February 2018 orders.

[6] See Annexure A (Letter of Instruction to Special Referee) to the 6 February 2018 orders.

[7] [2018] VSC 137 ('Ruling No 2').

[8] Mines Report, reference overview dated 2 November 2018, at p 1.

[9] [2019] VSC 393 ('Ruling No 3').

[12] See Holihan parties' outline of submissions dated 11 November 2019 and Holihan parties' outline of submissions in reply dated 18 November 2019.

[13] Submissions of the Amcor parties on Final Orders dated 11 November 2019 and Reply submissions of the Amcor parties on Final Orders dated 19 November 2019.

[14] Being direct wages/salaries, direct annual leave - employees, direct superannuation - employees, direct payroll tax - employees and direct workers' compensation - employees.

[18] Being the undated Asset Sale Deed between the first defendant by counterclaim (ACN002693843 Box Pty Ltd) on the one hand, and ACB Australia Pty Ltd, Achilla and Craig Anthony Holihan on the other (Exhibit H2). The Court found that completion of the Second Sale Agreement took place on 31 July 2003: Reasons at [33]-[34].

[19] APA is the second defendant by counterclaim, Orora Limited. The former name of the second defendant by counterclaim was Amcor Packaging (Australia) Pty Ltd.

[20] Being the second plaintiff by counterclaim, ACB Australia Pty Ltd.

[21] Being the Fixed and Floating Charge between the second plaintiff by counterclaim (ACB Australia Pty Ltd) on the one hand and the first (ACN002693843 Box Pty Ltd, formerly Australian Corrugated Box Co Pty Ltd) and second (Amcor Packaging (Australia) Pty Ltd) defendants by counterclaim on the other (Exhibit H3).

[22] See Annexure D to the Holihan parties' primary submissions.

[23] Calculated up to and including 25 November 2019, with interest accruing at the rate of $665.77 per day thereafter.

[24] See Annexure E to the Holihan parties' primary submissions.

[25] See Amcor parties primary submissions, at [31].

[26] The Amcor parties submit that it would be contrary to the established principles governing an award of interest for the Court to include interest on the amount of damages that constitutes GST because the GST would have been remitted to the Australian Taxation Office, and not retained by the Holihan parties. That is because Achilla, as a company engaged in a supply to Amcor, would have been required to remit all such GST when invoices for OME were paid and it cannot argue it is "out of its money" in this regard.

[27] Reasons, at [1048]-[1049] and [1059].

[28] McCudden Affidavit, exhibit CMM-15.

[29] The RBA's published cash rates from September 2007 are in the first column of the table at exhibit CMM-17.

[31] Transcript 25/11/19, at 3 (Mr Maiden QC).

[33] Relevantly, the period from 27 September 2005 to 31 July 2008.

[35] A copy of Vickery J's order appears as exhibit JCJH-31 to the supplementary Humphris affidavit.

[36] Reasons, at [32]-[33] (emphasis added).

[37] A reference to the Second Sale Agreement

[38] Being the 'Achilla method', the 'Amcor method' and the 'straight-line method', discussed at Reasons, [1060].

[41] Ibid, at [1064]-[1074] (Mr Meredith) and at [1075]-[1079] (Ms Meredith).

[42] Ibid, at [1077]-[1079] (emphasis added).

[43] Conclave (Wright), Transcript 31/07/15, at T2960.

[48] Transcript 25/11/2019, at pp 97-98 (Mr Tran).

[49] See Fourth Further Amended Statement of Claim dated 16 February 2015 at [4], [7] and [8] and [A] of the Prayer for Relief.

[50] See Fourth Further Amended Statement of Claim dated 16 February 2015 at [5], [6] and [8] and [A] of the Prayer for Relief.

[51] The calculation is set out at Annexure C to the Holihan parties' primary submissions. It adopts the penalty interest rate as fixed from time to time during the period from 3 September 2007 to 25 November 2019.

[52] Amcor parties' reply submissions, at [31].

[53] See e.g. Bucic v Arnej Pty Ltd (No 2) [2019] VSC 394, at [31] (Zammit J) ('Bucic').

[54] Bucic [2019] VSC 394, at [33] (Zammit J) citing Marsh v Ruby [1975] VicRp 20; [1975] VR 191, at 193 (Gowans J); Ahrkalimpa Pty Ltd v Schmidt (No 4) [2019] VSC 246, at [12] (Elliott J).

[55] Clarke v Foodland Stores Pty Ltd [1993] VicRp 81; [1993] 2 VR 382, at 394 (Fullagar, Marks and J D Phillips JJ); Hartley Poynton Ltd v Ali [2005] VSCA 53; (2005) 11 VR 568, at [102]-[103] (Ormiston JA; Buchanan and Eames JJA agreeing); Foxeden Pty Ltd v IOOF Building Society Ltd [No 3] [2006] VSC 207, at [5] (Habersberger J).

[56] The Holihan parties provided their outline on 3 December 2019 and the Amcor parties provided theirs on 9 December 2019.

[57] Holihan parties' submissions as to construction of s 60(1), at [2]; Amcor parties' submissions as to construction of s 60(1), at [1]-[5].

[58] Holihan parties' submissions as to construction of s 60(1), at [2].

[59] Amcor parties' submissions as to construction of s 60(1), at [6]-[7].

[60] Clarke v Foodland Stores Pty Ltd [1993] VicRp 81; [1993] 2 VR 382 ('Clarke')

[61] Ibid, at 389 (Fullagar, Marks and J D Phillips JJ)

[62] [2003] VSC 244, at [45] ('Johnson Tiles [No 3]').

[63] See e.g. Foxden Pty Ltd v IOOF Building Society Limited (No 3) [2006] VSC 207, at [5] (Habersberger J); Berengo v Amaca & Anor [2011] VSC 276 at [18] (T Forrest J); Hodgson v Amcor (No 9) [2012] VSC 205, at [35] (Vickery J); Texxcon Pty Ltd v Austexx Corporation Pty Ltd & Ors (No 2) [2013] VSC 343, at [4] (Davies J); Weatherbeeta Limited v Hammersmith Nominees Pty Ltd Pty Ltd (No 2) [2019] VSC 713, at [19]-[20] (Connock J) ('Weatherbeeta [No 2]').

[64] [2019] VSC 394, at [31] (emphasis added).

[65] [2003] VSC 244, at [46].

[66] (2005) 11VR 568 ('Hartley Poynton')

[67] Ibid, at 617-618 [106]-[107] (emphasis added).

[68] [2000] HCA 42; (2000) 201 CLR 321 at 328-329 [16].

[69] See Amcor parties' post-hearing note on interest, at [6].

[70] [2019] VSC 713, at [24].

[71] [2012] VSC 205.

[72] Ibid, at [36] (Vickery J) (emphasis in original).

[73] Hartley Poynton [2005] VSCA 53; (2005) 11 VR 568, at 617 [106]. The statutory rate is a 'benchmark' (Fullagar, Marks and JD Phillips JJ in Clarke [1993] VicRp 81; [1993] 2 VR 382, at 389-390, 394, 396-7 (Fullagar, Marks and JD Phillips JJ)) and 'As a general rule, the starting point is the penalty rate ... the penalty rate is routinely awarded by the Court' (Hargrave J in Kalenik v Apostolidis (No 2) [2009] VSC 410, at [78]).

[74] Johnson Tiles [No 3] [2003] VSC 244, at [46].

[75] Clarke [1993] VicRp 81; [1993] 2 VR 382, at 389-390, 394, 396-7 (Fullagar, Marks and JD Phillips JJ).

[76] Kalenik v Apostolidis (No 2) [2009] VSC 410, at [78].

[77] Weatherbeeta [No 2] [2019] VSC 713, at [35].

[78] [2009] VSC 410, at [36].

[79] [1993] VicRp 81; [1993] 2 VR 382, at 393-394 (Fullagar, Marks and J D Phillips JJ).

[80] A reference to David Leahey (Aust) Pty Ltd v McPherson's Ltd [1991] VicRp 77; [1991] 2 VR 367.

[81] Johnson Tiles [No 3] [2003] VSC 244, at [61] (Gillard J).

[82] [2009] VSC 410, at [83] (Hargrave J).

[83] [1996] VSC 348; [1996] 1 VR 17 ('Braeside Bearings'). In Braeside Bearings, the Court of Appeal (Tadgell JA, with whom Phillips and Callaway JJA agreed) held (at p 19) that a 'proceeding' in s 60(1) 'is to be understood to mean not the subject of a justiciable dispute but the means or vehicle by which the subject matter of a dispute is brought before the court for adjudication.'

[84] [2003] VSC 244, at [48].

[86] [1993] VicRp 81; [1993] 2 VR 382, at 400.

[87] [2003] VSC 244, at [51].

[88] [2019] VSC 246, at [12]-[17] ('AHRKalimpa [No 4]').

[89] Equitable compensation is a form of damages for the purposes of s 60: see Talacko v Talacko [2009] VSC 579, at [9] (Kyrou J), and the cases there cited.

[90] Clarke v Foodland Stores Pty Ltd [1993] VicRp 81; [1993] 2 VR 382, 389.2 (Fullagar, Marks and JD Phillips JJ).

[91] Subject to the matters set out in s 60(2).

[92] Kalenik v Apostolidis (No 2) [2009] VSC 410, at [12] (Hargrave J), citing Marsh v Ruby [1975] VicRp 20; [1975] VR 191, at 193.4 (Gowans J).

[93] In this regard, the court is entitled to consider all the evidence before the court and not only that led by the defendants: Clarke v Foodland Stores Pty Ltd [1993] VicRp 81; [1993] 2 VR 382, at 394.9. Elliott J went on to note (at [23]) '[i]n circumstances where a defendant withholds relevant information, that defendant cannot take advantage of that position for the purpose of any assessment of loss' citing Ramsay v BigTinCan Pty Ltd [2014] NSWCA 324; (2014) 101 ACSR 415, at 417 [5] (McColl JA, agreeing with Macfarlan JA), 437 [122] (Gleeson JA) and the cases there cited; Heydon, Leeming and Turner, Meagher, Gummow & Lehane's Equity Doctrines and Remedies (5th ed, 2015), at 829 [23-275].

[94] Marsh v Ruby [1975] VicRp 20; [1975] VR 191, at 193.1.

[95] Ibid, at 193.4, referred to with approval in Clarke [1993] VicRp 81; [1993] 2 VR 382, at 393.6.

[96] Ibid, at 194.3 (Gowans J), a decision with respect to s 79A of the Act. See also Kalenik v Apostolidis (No 2) [2009] VSC 410, at [19] (Hargrave J) with respect to the authority of Marsh v Ruby.

[97] Clarke [1993] VicRp 81; [1993] 2 VR 382, at 393.1.

[98] [2011] VSC 568, at [21].

[99] Amcor parties' reply submissions, at [22].

[102] Transcript 25/11/19, at pp 91 (Mr Maiden QC) and 93 (Mr Tran).

[103] McCudden affidavit, exhibit CMM-1.

[104] McCudden affidavit, exhibit CMM-2.

[106] The principal judgment records 30 March 2011 as the commencement date of the trial but the agreed procedural chronology states that the trial was listed to commence on 16 May 2011 and was proposed to be conducted in two phases: the first between 16 May and 30 June 2011, and the second between 1 August to 10 August 2011.

[108] At that point there was no cross-claim on foot.

[109] McCudden affidavit, exhibit CMM-4.

[110] Hodgson v Amcor Ltd (2012) 264 FLR 1; [2012] VSC 94 (the 'principal judgment').

[111] McCudden affidavit, exhibit CMM-5.

[120] McCudden affidavit, exhibit CMM-13 (Transcript of directions hearing on 19 December 2013 at T 2.14-18).

[122] Ibid; McCudden affidavit, exhibit CMM-14.

[123] McCudden affidavit, exhibit CMM-15.

[125] Supplementary Humphris affidavit, at [6] and exhibit JCJH-31.

[126] In September 2013 Amcor sought and obtained leave to bring their 'change of control' cross-claim against the Holihan parties.

[127] In the Reasons the Court noted (at [344]):

It will be recalled that in the principal proceeding, Vickery J discussed the Deed of Accession, finding that it was entered into on or about 21 March 2005, and made between ACB Co Vendor, APA, Mr Holihan, ACB Co Purchaser and Australian Corrugated Box Co Pty Ltd (formerly, Achilla). Relevantly, his Honour said:

Deed of Accession - Second Sale Agreement

[1752] On or about 21 March 2005, ACB, APA, Holihan, the ACB Purchaser and Australian Corrugated Box Co Pty Ltd (formerly, Achilla) entered into a transaction known as the "Deed of Accession" (the "Deed of Accession"). The Deed of Accession in effect substituted APA for ACB [ACB Co Vendor] in relation to "all capacities and for all purposes under or pursuant to the Second Sale Agreement". ...

[1753] The Accession Date is 21 March 2005.

[128] In his affidavit, Mr Humphris deposes (Humphris affidavit at [17]-[19]) that the application for leave to file a further amended statement of claim and to add two further plaintiffs (including Amcor Packaging Australia Pty Ltd (now Orora Limited) (APA)) was made in December 2009. On 19 May 2010, Emerton J delivered reasons for decision, granting leave to further amend the statement of claim. On 1 October 2010, Emerton J ordered, amongst other things, that:

(a) APA be joined as a defendant to Achilla's counterclaim (paragraph 7);

(b) the Holihan parties have leave to file and serve an amended counterclaim by 4 October 2010 (paragraph 8);

(c) a defence to the amended counterclaim be filed and served by 22 October 2010 (paragraph 9);

(d) the defendants by counterclaim file and serve an affidavit of the documents that are relevant to the questions raised in the counterclaim proceedings by 5 November 2010 (paragraph 10).

[129] McCudden affidavit, exhibit CMM-3.

[130] At footnote 16 the Amcor parties state: 'The OME jobs sent to the Joint Experts are within the date range from 27 September 2005 to 31 July 2008. In Annexure 1A to the letter to the Experts, 172 jobs are dated after 3 September 2007.' See also Transcript 25/11/19, at pp.110-111 (Mr Tran).

[131] Transcript 25/11/19, at pp 91-92 (Mr Maiden QC).

[132] Counsel for the Amcor parties said he accepted that what Mr Maiden QC stated about the amendments relating back to the commencement of the proceeding: see Transcript 25/11/19, at p 93 (Mr Tran).

[133] Transcript 25/11/19, at p 93 (Mr Maiden QC).

[135] As was noted earlier, in the context of their face value of the invoices argument, the Amcor parties submitted that no interest should be awarded on the GST component of any award of damages payable to Achilla. However, at times during oral submissions, counsel for the Amcor parties appeared to suggest that this argument may have a broader application. To the extent that the argument might be said to have relevance in the context of any award of damages payable to Achilla, I note that no coherent position was articulated, and counsel later confirmed that the position contended for in relation to GST is as set out in the Amcor parties submissions, at [6]: see Transcript 25/11/19, at p128 (Mr Tran).

[136] [1993] VicRp 81; [1993] 2 VR 382, at 389 (Fullagar, Marks and J D Phillips JJ)

[137] [2005] VSCA 53; (2005) 11 VR 568, at 618, [106] (Ormiston JA, with whom Buchanan and Eames JJA agreed).

[139] The RBA published cash rates from September 2007 are set out in the McCudden affidavit, in the first column of the table at exhibit CMM-17.

[140] Amcor parties' reply submissions, at [32].

[141] Amcor parties reply submissions, at [30].

[143] Transcript 25/11/19, at p 125 (Mr Maiden QC).