Geneville Constructions Pty Ltd v Leslight

Relevant legislation

1. Section 98(1) and (2) of the Civil Procedure Act 2005 provide as follows: "98 Courts powers as to costs (1) Subject to rules of court and to this or any other Act: (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis. (2) Subject to rules of court and to this or any other Act, a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court."
2. Sections 100 and 101 of the Civil Procedure Act provide as follows: "100 Interest up to judgment (1) In proceedings for the recovery of money (including any debt or damages or the value of any goods), the court may include interest in the amount for which judgment is given, the interest to be calculated at such rate as the court thinks fit: (a) on the whole or any part of the money, and (b) for the whole or any part of the period from the time the cause of action arose until the time the judgment takes effect. (2) In proceedings for the recovery of a debt or damages in which payment of the whole or a part of the debt or damages has been made after the proceedings commenced but before, or without, judgment being given, the court may include interest in the amount for which judgment is given, the interest to be calculated at such rate as the court thinks fit: (a) on the whole or any part of the money paid, and (b) for the whole or any part of the period from the time the cause of action arose until the time the money was paid. (3) This section: (a) does not authorise the giving of interest on any interest awarded under this section, and (b) does not authorise the giving of interest on a debt in respect of any period for which interest is payable as of right, whether by virtue of an agreement or otherwise, and (c) does not authorise the giving of interest in any proceedings for the recovery of money in which the amount claimed is less than such amount as may be prescribed by the uniform rules, and (d) does not affect the damages recoverable for the dishonour of a bill of exchange. (4) In any proceedings for damages, the court may not order the payment of interest under this section in respect of the period from when an appropriate settlement sum was offered (or first offered) by the defendant unless the special circumstances of the case warrant the making of such an order. (5) For the purposes of subsection (4), appropriate settlement sum means a sum offered in settlement of proceedings in which the amount for which judgment is given (including interest accrued up to and including the date of the offer) does not exceed the sum offered by more than 10 per cent. 101 Interest after judgment (1) Unless the court orders otherwise, interest is payable on so much of the amount of a judgment (exclusive of any order for costs) as is from time to time unpaid. (2) Interest under subsection (1) is to be calculated, at the prescribed rate or at such other rate as the court may order, as from: (a) the date on which the judgment takes effect, or (b) such later date as the court may order. (3) Despite subsection (1), interest is not payable on the amount of a judgment if the amount is paid in full within 28 days after the date on which the judgment takes effect, unless the court orders to the contrary. (4) Unless the court orders otherwise, interest is payable on an amount payable under an order for the payment of costs. (5) Interest on an amount payable under an order for the payment of costs is to be calculated, at the prescribed rate or at any other rate that the court orders, as from the date the order was made or any other date that the court orders. (6) This section does not authorise the giving of interest on any interest payable under this section. (7) In this section, a reference to the prescribed rate of interest is a reference to the rate of interest prescribed by the uniform rules for the purposes of this section. Note. See section 136 in relation to the order in which payments on account of a judgment debt are to be appropriated."
3. Part 42.1 of the Uniform Civil Procedure Rules 2005 provides as follows: "42.1 General rule that costs follow the event Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs."

Principles relating to Calderbank offers by a plaintiff

1. In Zhang v Harmstorf (No 2) [2019] NSWDC 116 I considered the principles applicable to Calderbank offers where a judgment has been obtained by a plaintiff which is for a sum greater than an offer. I considered the circumstances in which an indemnity costs order should be made in favour of a plaintiff. I stated the following in paragraphs 8-12 of Zhang: "8. The rejection of a Calderbank offer by a party does not mean that indemnity costs follow as a matter of course. The applicant must demonstrate to the court that the rejection of the offer was "unreasonable" in all the circumstances of the case: Leichhardt Municipal Council v Green [2004] NSWCA 341 at [19]; Jones v Bradley (No 2) [2003] NSWCA 258 at [12]; Russell v Edwards (No 2) [2006] NSWCA 52 at [8]; Trustee for the Salvation Army (NSW) Property Trust v Becker (No 2) [2007] NSWCA 194 at [7]. 9. In NRMA Insurance for the Nominal Defendant v Al-Bayati (No 2) [2019] NSWCA 14, the Court of Appeal stated in paragraph 10 as follows: [10] The party making an offer of compromise or Calderbank offer bears the onus of satisfying the court that it should exercise the costs discretion in its favour: Evans Shire Council v Richardson (No 2) [2006] NSWCA 61; Commonwealth of Australia v Gretton [2008] NSWCA 117 at [46]; County Securities Pty Ltd v Challenger Group Holdings Pty Ltd (No 2) [2008] NSWCA 273 at [31] ..." 10. In Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344, Basten JA (with whom McColl and Campbell JJA agreed) stated as follows at paragraphs [8]-[16]: [8] The willingness of the courts to take account of a "without prejudice" offer of settlement in disposing of costs was originally tempered by the view that the practice should only be adopted where the alternative of a payment into court was unavailable: Cutts v Head [1984] Ch 290. The practice was, however, adopted in this jurisdiction without the restriction: Messiter v Hutchinson (1987) 10 NSWLR 525 (Rogers J); SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 at [45] (Giles JA). The expansion of formal rules providing for offers of compromise has not diminished the willingness of the courts to act upon informal offers, rather the contrary. However, there is no presumption that an offeree who does not accept an offer and does not obtain a judgment more favourable than the offer will necessarily pay indemnity costs from the date of the offer: Leichhardt Municipal Council v Green [2004] NSWCA 341 at [19] (Santow JA, Stein AJA agreeing); Jones v Bradley (No 2) [2003] NSWCA 258 at [6]-[9]; Ambulance Service of New South Wales v Worley (No 2) [2006] NSWCA 236; 67 NSWLR 719 at [18]. The approach frequently adopted in this jurisdiction has been to ask two questions, namely whether - (a) there was a genuine offer of compromise, and (b) it was unreasonable for the offeree not to accept it. Genuine offer of compromise [9] There is authority for the proposition that both an offer of compromise under the rules and an informal offer must involve "a real and genuine element of compromise": Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) [2006] NSWCA 120; 67 NSWLR 706 at [8]. While this terminology is not entirely apposite, it has been described as "serviceable": Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [25] (Spigelman CJ, Beazley and McColl JJA). To characterise an offer by reference to epithets such as "real" or "genuine" adds little to the requirement of compromise, and may imply (wrongly) that the appropriate inquiry is as to the subjective intentions of the offeror: Hancock v Arnold; Dodd v Arnold (No 2) [2009] NSWCA 19 at [23] (Ipp, McColl and Basten JJA); Evans of Robb Evans & Associates v European Bank Ltd (No 2) [2009] NSWCA 170 at [17]-[18]. As explained by Giles J in Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358 at 368: Compromise connotes that a party gives something away. A plaintiff with a strong case, or a plaintiff with a firm belief in the strength of its case, is perfectly entitled to discount its claim by only a dollar, but it does not in any real sense give anything away, and I do not think that it can claim to have placed itself in a more favourable position in relation to costs unless it does so. Unreasonable refusal [10] Most cases will turn on the second element, namely whether there has been an unreasonable refusal by the offeree. This in turn involves a number of considerations. (a) timing [11] It is not in doubt that the response of the offeree must be assessed at the time it was made, and not with the benefit of hindsight resulting from a known outcome, recorded in a judgment: Regency Media at [33]. However, that factor should not entail a detailed investigation into the state of preparation or knowledge of the offeree as at the date of the offer. The expense and use of resources which settlement is intended to avoid include those involved in the assessment and preparation of a case. (b) relevant factors [12] In Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; 13 VR 435 the Court of Appeal (Warren CJ, Maxwell P and Harper AJA) identified the factors relevant to determining whether the rejection of an offer was unreasonable as including the following: (a) the stage of the proceeding at which the offer was received; (b) the time allowed to the offeree to consider the offer; (c) the extent of the compromise offered; (d) the offeree's prospects of success, assessed as at the date of the offer; (e) the clarity with which the terms of the offer were expressed; (f) whether the offer foreshadowed an application for indemnity costs in the event of the offeree's rejecting it. [13] The court rejected the suggestion that an offer need set out with specificity the bases upon which it was said that the offeree should accept the compromise proffered. The relevance of such material would depend upon the extent to which the issues had already been canvassed, for example by way of pre-litigation correspondence, and whether there were circumstances with which the offeror might reasonably expect the offeree not to be conversant. In some circumstances greater leniency may be accorded to a defendant offeree at an early stage of proceedings, than to a plaintiff offeree. [14] The extent of the compromise offered will always be a relevant factor in determining the reasonableness of the offeree's rejection. In Robb Evans & Associates an offer in compliance with the UCPR, r 20.26, involved an effective amount (after deducting a sum as to which there was no dispute) of less than $2,000 to settle a claim in excess of $800,000. The court stated: [20] … If the offer were based on a legal assessment of the likelihood of success in an amount in excess of $800,000, the claim should have been struck out as frivolous and vexatious. It ultimately failed in this Court, but could not, on any view, be so categorized. It is implausible that the appellant so categorized it in quantifying his offer. [21] If the appellant had carried out a commercial evaluation, rather than a pure legal assessment of the likelihood of success, he would undoubtedly have concluded that, even if ultimately successful, he would be unlikely to recover many thousands of dollars of costs incurred if the litigation proceeded. A commercially based offer would have taken that matter into account. This offer clearly did not. … [23] … The amount offered, beyond that amount which was not in dispute, is properly characterized as trivial or contemptuous. It does not engage the costs consequences provided by r 42.15. [15] A similar approach was applied in Regency Media, where an offer of $10,000 was made in response to a claim of approximately $600,000: at [16]. The court noted at [32]: If a derisory offer, of the kind made in these proceedings, could result in an order for indemnity costs, then it is likely that many, perhaps most, contract interpretation disputes would result in an indemnity costs order, if the formality of an offer in accordance with the rules had been made at an early stage. If the appellant were to succeed in the present case, it is quite likely that such an offer would accompany most statements of claim as a matter of commercial practice. The purpose of the special order - to encourage settlement - would no longer be served. An order for indemnity costs could, in our opinion, become the normal order in many commercial disputes. (c) onus of proof [16] The general rule is that costs payable under an order of the court are to be assessed on the ordinary basis: UCPR, r 42.2. The court may otherwise order, but the burden of persuading the court will lie with the offeror: Black v Lipovac [1998] FCA 699; 217 ALR 386 at [217] (Miles, Heerey and Madgwick JJ), which has been regularly followed in the Full Court - see, eg, CGU Insurance Ltd v Corrections Corporation of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173 at [75] (Moore, Finn and Jessup JJ). Again, however, the reference to onus of proof is not intended to suggest that an application for indemnity costs be turned into a mini-trial. Generally, such applications are dealt with on the papers, a practice which should be maintained. It is nevertheless correct, as a matter of principle, to say that it is the offeror which must persuade the court that the rejection of the offer was, in the circumstances at the relevant time, unreasonable." 11. The Miwa decision has been followed in numerous later cases: see Hanna v Raoul [2018] NSWCA 201 at [154] per Beazley P and Ku-ring-gai Council v Chan (No 2) [2018] NSWCA 73 at [6]. The Miwa case was relied on by both parties in their written submissions. 12. The principles applicable therefore appear to be as follows: (a) A party who is forwarded an offer who does not accept an informal Calderbank offer and thereafter obtains a judgment which is less favourable than the offer made will not necessarily be required to pay indemnity costs to the offeror from the date of the offer; (b) Whether indemnity costs should be awarded to the offeror depends on first, whether there has been a genuine offer of compromise and secondly, whether in all the circumstances it was unreasonable for the offeree not to accept the offer; (c) A number of factors are relevant. These include the following; (d) The stage of the proceedings at which the offer was received and whether the offeree was conversant with the issues in the case; (e) The extent of the compromise offered; (f) Whether the amount offered was properly characterised as trivial or contemptuous; (g) The time allowed to the offeree to consider the offer; (h) The offeree's prospects of success, assessed as at the date of the compromise; (i) The clarity of the offer; and (j) Whether the offer foreshadowed an application for indemnity costs in the event of the offeree rejecting it."
2. I will apply the principles stated by me in Zhang v Harmstorf (No 2).

Submissions of the parties

1. The parties have relied on detailed written and oral submissions in relation to the different issues to be determined concerning costs and interest.

Costs

1. As s 98(1) of the Civil Procedure Act and Part 42 of the Uniform Civil Procedure Rules (UCPR) make clear, the appropriate order as to costs in proceedings is in the discretion of the court. That discretion must be exercised judicially and in accordance with established principle. The usual order as to costs is that costs follow the event and are awarded on the ordinary basis: Part 42.1 and Part 42.2 of the UCPR. In the context of Part 42.1, "the event" means the result of the proceedings: Baker v Towle [2008] NSWCA 73 at [11]. In Baker, Beazley JA held "the party who succeeds on the claim before the court is awarded costs, unless the court, pursuant to the discretion conferred by r 42.1, makes "some other order"": at [11]. See also Network Ten Pty Ltd v TX Australia Pty Ltd (No 2) [2019] NSWCA 51. Exceptions to the general rule are offers of compromise and Calderbank offers. Depending on the facts of a particular case, these may result in an award of indemnity costs in favour of the successful party from a certain date.

The Cross-Claim

1. The defendant was unsuccessful with his Cross-Claim. No particular matter was put forward by the defendant in his submissions as justifying a different costs order to that contemplated by Part 42.1 in relation to the Cross-Claim. I do not read paragraphs 18-21 of the defendant's written submissions in chief as suggesting a different order as to costs on the Cross-Claim. In oral submissions, nothing was said by counsel for the defendant in support of an order contrary to the usual order for costs in relation to the Cross-Claim. In my view, the plaintiff is entitled to at least the usual order as to costs in relation to the Cross-Claim. To the extent the defendant suggests that some different order should be made in relation to the costs of the Cross-Claim, I reject the submission. The defendant was completely unsuccessful as to his Cross-Claim and the usual order under Part 42.1 should, in the exercise of my discretion, follow.

The Statement of Claim proceedings

1. I now turn to consider whether the plaintiff is at least entitled to an order as to its costs, as agreed or assessed, in relation to the Statement of Claim proceedings. This order has already been made by the court in the Main Judgment, but was subject to an application for a different order. I take the defendant's written submissions to be an application for a different order. Similarly, the plaintiff has sought an indemnity costs order from a particular date.
2. The defendant submits that the plaintiff should only have 50% of its costs in the Statement of Claim proceedings on the basis of its unsuccessful contract claim. He also relies on additional time taken at the hearing by the failure by the plaintiff to paginate the exhibits to affidavits which were read. The plaintiff submits that it should have all of its costs of the unsuccessful Statement of Claim proceedings and, in the alternative, if the defendant's submission as to Nadilo v Souris (No 2) [2019] NSWSC 246 is accepted, it should have at least 75% of its costs of the Statement of Claim proceedings. However, the plaintiff submits that the decision of Leeming JA in the Nadilo case, above, upon which the defendant placed some reliance, can be clearly distinguished from the present case for the reasons set out in its submissions (see written submissions paragraphs 23-24).
3. In the Network Ten case, above, Bathurst CJ (with whom Meagher and Gleeson JJA agreed) stated as follows in paragraph 13: "13. One circumstance where the discretion may be exercised differently is where the successful party has been unsuccessful on discrete issues raised by it in the proceedings. However, generally speaking, an apportionment to take account of that fact will only be made when the issues on which the successful party was unsuccessful were clearly dominant or separable: Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15 at [64]; Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd (No 2) [2018] NSWCA 266 at [10]- [14]."
4. In my view, the contractual claim in the present case was not "clearly dominant" in terms of evidence or submissions. It was one of the two bases on which the plaintiff claimed to have entitlements in the Statement of Claim proceedings. However, in my view it was a separable issue. It clearly was an alternate basis asserted for the plaintiff to succeed on its pleaded claim. The contractual claim was nevertheless relevant in determining what the plaintiff had agreed to do with the defendant and what tasks and work it had agreed to provide gratuitously. It provided some proper guidance for the assessment of the claim in quantum meruit.
5. Some considerable time was spent on the contractual claim in the final hearing, including in the written submissions of the parties. The legal argument of the plaintiff as to the contractual claim was detailed and sophisticated. It required close attention by counsel for the defendant and the court. In Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd (No 2) [2018] NSWCA 266, the Court of Appeal considered costs orders in matters involving discrete issues at [7]-[14]. McColl JA (with whom Macfarlan JA agreed) stated at [14] that where there is a mixed outcome in proceedings the question of apportionment of costs between issues on which the party who has overall been successful and those on which that party has failed is "very much a matter of discretion, and mathematical precision is illusory."
6. In my view, the submission made relating to the pagination of the affidavit exhibits should be rejected. This consumed very little time in the course of the trial.
7. Having considered Nadilo carefully, in my view it can be distinguished. The facts are quite different to those in the present case and the evidence on the relevant contractual issue taken into account by Leeming JA appears to have been considerable. His Honour also described the contractual argument which led to a reduced costs order as being an argument which "should never have been brought" and which was "foredoomed to fail": at [30]. In my view, the contractual argument made here was arguable.
8. Standing back, and considering the conduct of the proceedings by the parties as a whole including the submissions and the time taken up at the hearing, in my view the appropriate order is that the plaintiff should have 80% of its costs of the Statement of Claim proceedings paid by the defendant, as agreed or assessed. It was important in my view for the basis of the agreement between the parties to be considered and determined. This was relevant to determine aspects of the quantum meruit claim, including what was agreed, what was accepted and what benefits it was unjust of the defendant to retain without appropriate payment. However, the defendant was successful on the contract claim and some reduction on this discrete issue is in my view appropriate. That reduction should be 20%.

Indemnity costs

1. In relation to the Cross-Claim proceedings, in my view an order for indemnity costs as sought by the plaintiff should not be made.
2. The plaintiff, as applicant, must demonstrate to the court that the rejection of the Calderbank offer dated 17 November 2017 made by the plaintiff to the defendant was "unreasonable" in all the circumstances of the Cross-Claim. The offer clearly included the Cross-Claim: see the penultimate paragraph on the first page of the 17 November 2017 letter. Having regard to the fact that there were complex expert evidence issues between the parties which ultimately were principally determined by the Referee, at the time the Calderbank offer was made, I do not consider that the rejection of the offer in relation to the Cross-Claim proceedings was "unreasonable" in the circumstances. The defendant had expert's reports at the time supporting its claim.
3. In relation to the Statement of Claim proceedings, in my view the plaintiff has a stronger argument.
4. The defendant submits that an indemnity costs order would not be fair and that the rejection of the offer by him was not unreasonable. He relies on: 1. The short period of time available under the offer which was made on 17 November 2017 but which was required to be accepted by 5pm on 24 November 2017; 2. The fact the plaintiff's costs were not disclosed at that time such that the true effect of the plaintiff's offer could not be determined; 3. Having regard to these matters, the plaintiff's offer should be regarded as not a genuine compromise but rather an attempt to trigger costs' sanctions in the circumstances and therefore it was not unreasonable for the defendant to reject the offer; 4. A term of the 17 November 2017 offer was that the respective payments be made within 28 days of the offer, which meant within 21 days of the expiry of the offer. That time stipulation was said to be unreasonable having regard to the time period if judgment had been entered: see s 101(3) of the Civil Procedure Act; 5. The 2017 Calderbank offer referred to and relied upon what was stated to be a 19 March 2014 "settlement offer" The defendant submitted that the 19 March 2014 letter from the solicitors for the plaintiff was not an offer of settlement but a demand for payment, relying on the claim in contract; 6. The offer made was not clear in its terms.
5. In its written submissions, the plaintiff points to earlier offers which had been made to the defendant, the fact that the 17 November 2017 offer was made shortly before the commencement of the trial when the parties were fully familiar with the issues and that a substantial compromise was made by the plaintiff in the offer. It also submits that the offer was genuine, reasonable and should give rise to an order for indemnity costs. The short period allowed to consider the offer was explained by the short period of time until the proceedings commenced. Further, it is submitted that the letter accompanying the offer was detailed, fully set out the basis of the offer and made clear that it was made in accordance with the principles in Calderbank v Calderbank [1975] 3 All ER 333.
6. In my view, the extent of the compromise offered by the plaintiff was considerable, could not be described as trivial or contemptuous and was made when the defendant was conversant with the issues in the case. In my view it was a genuine offer of compromise. The plaintiff expressly stated in the letter that it was willing to forego any entitlement to interest and costs. I reject the submission of the defendant that the reliance on the 19 March 2014 letter somehow qualified the nature of the offer. I also reject the defendant's submissions that the time period for payment was unreasonable. In my view, a period of 21 days for payment was not unreasonable. The fact the plaintiff's costs had not been quantified was also in my view not to the point - both sides, to the knowledge of each other, would very likely have incurred substantial legal and expert costs by November 2017. Costs are sometimes not quantified in valid Calderbank offers.
7. However, in my opinion an indemnity costs order as sought should not be made in favour of the plaintiff in relation to the Statement of Claim proceedings for the following reasons: 1. The period to consider the offer was only a week. This is a short period of time particularly if clarification was required (see further below). The case can be distinguished from Woollahra Municipal Council v Secure Parking Pty Ltd (No 2) [2015] NSWSC 452 relied on by the plaintiff as that was a commercial case between "sophisticated litigants". This was a home building matter and was complex. Each case must turn on its own facts; 2. The plaintiff failed in relation to the claim in contract, one of its two claims in the proceedings; 3. The claim for the plaintiff's delay costs substantially arose out of the report of the Referee. The amount which I have held is recoverable for the plaintiff's delay costs is considerable; 4. I have reduced the plaintiff's overall costs' entitlement in the Statement of Claim proceedings because of its failure as to its contractual claim. The plaintiff submitted that this was not a relevant matter to be taken into account. I disagree. In my view, the fact I have reduced the amount of costs to be paid by the defendant is a factor to be taken into account in the exercise of the costs' discretion as to indemnity costs; 5. The Calderbank offer letter dated 17 November 2017 is detailed and comprehensive. However, one of the terms of the offer was that the parties were "to execute a deed of settlement on reasonable terms providing for payment, confidentiality, indemnities and releases on usual terms". It is unclear and not obvious to me what was meant by "indemnities and releases on usual terms". The defendant submitted that the lack of clarity in this term meant that the failure to accept the Calderbank offer was not unreasonable; 6. A Calderbank offer must be made on clear terms. The plaintiff relies on the English Court of Appeal decision of Phyllis Trading Ltd v 86 Lordship Road Ltd [2001] 2 EGLR 85 for the proposition that a duty exists on an offeree to seek clarification where an offer was claimed to be otherwise, lest the offeree be held to have unreasonably rejected the offer. I could find no binding Australian appellate consideration of this case. While I accept, as was stated by the English Court of Appeal judgments in Phyllis Trading, above, that the power to award costs should be exercised in such a way as to encourage rather than discourage settlements, any obligation to seek clarification as to an offer has to be seen in the context of the short period that the offer was open. The plaintiff submitted that the term was qualified by the word "reasonable." However, in my view that was not sufficient to provide clarity. Did the term mean indemnities in relation to the conduct of the defendant or, for example, potential actions by third parties? What was meant by the words "on usual terms"? This was uncertain and in my opinion made the offer unclear.
8. Taking into account all of the above matters, and exercising the discretion which I have as to costs, in my view the rejection of the offer to settle in the Calderbank offer dated 17 November 2017 by the defendant was not unreasonable in all the circumstances. I therefore decline to order indemnity costs in favour of the plaintiff in relation to the Statement of Claim proceedings as sought.

Interest on costs and disbursements

1. The plaintiff applies for interest on costs and disbursements pursuant to s 101(4) of the Civil Procedure Act 2005. The defendant seeks an "otherwise order".
2. I have taken into account the matters set out in paragraphs 30-33 of the defendant's written submissions in chief dated 23 May 2019. None of those matters persuades me that I should depart from the usual order in s 101(4) of the Civil Procedure Act. The order proposed by the plaintiff in substance is in accordance with the form of order determined by Justice Campbell in the Supreme Court as being appropriate in Lahoud v Lahoud [2006] NSWSC 126. The order will have to be varied to account for the 80% of costs awarded as set out above. The appropriate rate of interest is the prescribed rate. Interest should be paid from the date on which the costs or disbursements concerned were paid. I note that the order as made in Lahoud was approved by the Court of Appeal in Leda Pty Ltd v Weerden (No 2) [2007] NSWCA 283 at [7]-[9]. See also the analysis of Parker J in Tjiong v Tjiong (No 2) [2018] NSWSC 1981 at [49]-[84]. In substance, I accept the plaintiff's written submissions at paragraphs 25-27 dated 14 June 2019 subject to the reduction in the percentage of costs awarded in the Statement of Claim proceedings.

Pre-judgment Interest

1. There is a difference between the parties in relation to the plaintiff's claim for interest on the amount awarded as a quantum meruit.
2. As stated above, the defendant asserts first, that the pre-judgment contractual interest rate of 20% as found should not be applied as the contract was held to be unenforceable, and, secondly, if interest was recoverable in relation to the quantum meruit claim, interest could not properly accrue until the court had ordered, and the order was entered, the amount of the quantum meruit: paragraphs 4-17 of the defendant's written submissions dated 23 May 2019. Reliance was placed on a number of cases which doubted what was described as a "free-standing" right to the recovery of interest where the defendant has had the use of the plaintiff's money in circumstances which indicate an unjust enrichment at the expense of the plaintiff: The Commonwealth of Australia v SCI Operations Pty Ltd (1998) 192 CLR 285 at [72]; Peet Ltd v Richmond [2011] VSCA 343 at [125]-[127]. Neave JA and Judd AJA agreed with Justice Nettle's comments in Peet, above.
3. In his reply submissions, the defendant also noted that only a claim for interest under the Civil Procedure Act was claimed in the Amended Statement of Claim: reply submissions dated 24 June 2019 paragraph 13. In my view, this is not an answer as a claim for pre-judgment interest was foreshadowed in the pleadings and there can be no reasonable suggestion that the defendant would have run his case any differently if he was aware that the present claim for common law interest would be made.
4. The plaintiff relies on s 100 of the Civil Procedure Act and states that the plaintiff is entitled to interest on the quantum meruit amount contemporaneously with the provision of the work by the plaintiff without payment from the defendant and, in the alternative, an entitlement to common law or equitable interest: see paragraphs 28-34 of the plaintiff's written submissions dated 14 June 2019. It is submitted that the 20% per annum contractual amount should be the appropriate interest rate applied as it reflects what was agreed as being the "true cost to the plaintiff" arising from the defendant's failure to pay fair and reasonable value for the works.
5. First, in my view these proceedings were clearly "proceedings for the recovery of money" within s 100(1) of the Civil Procedure Act. It is difficult to see how the proceedings in restitution could be categorised in any other way. These words are sufficient to cover a claim for compensation in restitution on a quantum meruit basis.
6. Secondly, in paragraph 126 of Peet, above, Nettle JA noted that the so-called "free-standing right to recovery of interest" has been recognised in New South Wales. In my view it has been in the decision of the Court of Appeal in Nu-Line Constructions Pty Ltd v Fowler [2014] NSWCA 51 at [39], [181] and [183]-[207]. It seems that interest would be payable from the time when retention of the moneys or works became unjust: Perricoota Boat Club Investments Pty Ltd v Watson [2014] NSWSC 378 at [59].
7. I agree with the defendant's submission that the rate of 20% for any award of interest is inappropriate. This was the contractually agreed rate and the contract was held to be unenforceable. Despite paragraph 33 of the plaintiff's written submissions, there was no evidence before me as to the plaintiff's financing costs' interest rate. An award of pre-judgment interest is aimed to compensate the plaintiff for the injury or loss sustained: MPB (SA) Pty Ltd v Gogic (1991) 171 CLR 657 at 663.
8. The plaintiff only succeeded on its quantum meruit claim. Formal written contracts could have been entered into by the parties in order to protect the plaintiff's right to the agreed contractual interest rate on unpaid goods and services.
9. In my view, the appropriate order is for interest to be paid on the judgment amount for a period up to judgment pursuant to s 100(1) of the Civil Procedure Act.
10. Various submissions are made in relation to the date when interest should commence. The plaintiff submitted that the payment should arise contemporaneously with the provision of those works without payment: written submissions paragraph 31.
11. It is further submitted that as the works were undertaken over a period of time during the works, the period over which the works were performed should be halved in the calculation of interest or alternatively half the rate for the whole period should be used: written submissions paragraph 34. The defendant submits that interest should only be payable, if at all, on a quantum meruit basis, from the date judgment is entered.
12. First, as stated above, I can see no reason why pre-judgment interest should not be awarded under s 100(1) of the Civil Procedure Act on the amount awarded on a quantum meruit basis. If I had to determine the matter, I would find that interest is also payable at common law consistently with the decision of the Court of Appeal in the new Nu-Line case, above. It is unnecessary for me to consider the position of equitable interest. I note that restitution is a common law remedy.
13. Delaying the date from which interest is to be paid to the date the order is entered, as asserted by the defendant, in my view gives no proper regard to the unjust nature of the failure by the defendant to promptly pay for works performed and his acts in keeping the plaintiff out of its money. The defendant points to the uncertain amount to be paid as the contract claim could not be enforced. Whilst that is true, the court considers the payment of interest after the correct amount has been ascertained. The defendant should not obtain the benefit of his unjust failure to pay for legitimate works and services. He could have offered to pay a substantial amount subject to the precise entitlement being determined. The evidence at the trial established that the defendant received the invoices claimed by the plaintiff to have been sent.
14. Complex questions arise as to the date which should be used as the date from which interest should be calculated. I have considered the various claims in paragraphs 441-459 of the Main Judgment. Clearly, the amount found to be payable was different to the invoiced amount. Further, the final invoices were not sent until March 2014 when they accompanied the letter from the plaintiff's solicitors to the defendant dated 19 March 2014 which is Exhibit "HHU-1" to Ms Usher's 14 June 2019 affidavit.
15. Although the precise amount owed under a quantum meruit could not be determined until the Main Judgment was handed down, a focus on the unjust retention of the benefit of the works and services is in my view appropriate.
16. Having considered the different submissions put by the parties, in my view interest on the quantum meruit amount should be payable at the prescribed rates from the date one month after 19 March 2014. This would allow for the receipt of the letter dated 19 March 2014 from the solicitors for the plaintiff, a consideration of that letter and its attachments (including the new invoices) by the defendant and a consideration by the defendant of the works and services which had been provided by or through the plaintiff. Accordingly, in my view the prescribed interest on the quantum meruit amount should be calculated from 19 April 2014.
17. The parties should prepare agreed Short Minutes of Order reflecting these reasons. If there is any disagreement, alternative orders should be prepared by the parties with detailed calculations and with supporting written submissions not exceeding five pages each and I will seek to determine the matter in chambers. If that cannot be done, I will relist the matter for further oral submissions.
18. There has been a degree of success by each party in the applications. My view is that the appropriate costs order is that each party should meet its own costs of the current applications before the court.
19. Accordingly, the orders I make are as follows: 1. The parties are to bring in agreed Short Minutes of Order within 14 days reflecting these reasons. 2. In the event that there is continued disagreement, each party should prepare orders it or he proposes with detailed calculations attached and with supporting written submissions of no more than five pages relating to the orders sought and serve such proposed orders and submissions on the legal representatives for the other party and the Associate to Dicker DCJ. 3. There be no order as to costs in relation to the applications before the court with the intent that each party should pay its or his own costs of such applications. 4. Liberty to apply within 14 days if a different costs order is sought to that in (3) above.

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