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Submissions as to Consequential Orders

Interest

6. The Appellant claims interest in relation to two amounts found to be owing by the Respondent. These relate to “the Painting Stage” and “Practical Completion”. The Appellant was found to be entitled to $63,750 in relation to the Painting Stage and $21,250 in relation to Practical Completion.

7. The total amount found to be owing by the Respondents to the Appellant was thus $85,000.

8. The magistrate awarded the Respondents liquidated damages of $5,200 in compensation for the Appellant’s delay. That finding was undisturbed on appeal and thus a sum of $5,200 is to be paid by the Appellant to the Respondents.

9. The Appellant seeks to offset that sum against the amount owed for Practical Completion arguing that the two aspects bear a relationship to each other. It is proposed then that the sum claimed in relation to Practical Completion be reduced to $16,050.

10. The total sum, excluding interest, to be paid to the Appellant by the Respondents is $79,800.

11. There are three aspects to the Appellant’s claim for interest: (a) The painting stage; (b) Practical Completion; and (c) The judgment sum.

Painting stage

12. In relation to the Painting Stage, the Appellant was found at [121] of the judgment handed down on 16 October 2025 to be entitled to claim interest on the sum owing at the rate of 20% to run from 10 business days after the claim for payment of the sum (uncontroversially said to be 7 July 2022) until the date of judgment in the proceedings.

13. It is to be observed that the contract provided for interest on the unpaid sum to be “adjusted weekly compounding”. However, the Appellant submits that the interest be calculated without weekly adjustment and compounding, leading to a lower amount claimed by way of interest. I accept that while this is not in accordance with the contract, it reflects more closely the finding at [121] and I will adopt the approach proposed by the Appellant.

14. The Appellant provided a Minute of Order representing the claimed interest. In relation to this claim, the Minute provides for the payment of interest at 20% from 7 July 2022 to 6 March 2026, not the date of judgment, being 16 October 2025.

15. The Court’s finding at [121] is for interest of 20% from 7 July 2022 until date of judgment. There is no submission advanced nor reason why following judgment the contract rate of interest of 20% should continue on so much of the money for the Painting Stage as remains unpaid. Rather from the date of judgment, 16 October 2025, until payment of the sum, interest at the rate determined by the Court Procedure Rules 2006 (ACT) from time to time should apply.

Practical Completion

16. As to the sum owed to it by the Respondents in relation to Practical Completion, at [122] of the Judgment the Appellant was found to be entitled to pre-judgment interest on that sum to run from 10 business days after the claim for payment of 26 June 2022 (7 July 2022). The Appellant claims that interest at the rate specified in the Court Procedure Rules 2006 (ACT) from time to time until the date of judgment.

Interest on the Judgment sum

17. The Appellant claims interest on the amount found owing to it, namely $79,800, calculated in accordance with the rate specified in the Court Procedure Rules 2006 (ACT) from time to time and excluding interest on the sums owed after the date of the entry of these orders. The Respondents’ contentions

18. The Respondents oppose the making of any orders consequential on the findings in the judgment whether as to costs or interest. The Respondents submit there should be no order and provide three apparent bases for this submission. First, they assert that there are errors in relation to facts found in the judgment and assert as correct a contrary version of the facts. Next, they argued that because the matter was complex, there should be no costs or interest and, finally, the Respondents argue that to make the orders would be unfair because they are in a position of financial hardship.

19. As to the Respondents’ financial hardship, they contend that they have expended $96,000 in legal costs (I note that the parties represented themselves during the hearing of the appeal) and expended $148,000 to complete the work on the property, the subject of the dispute. That property was sold. The Respondents contend that after payment of the mortgage and “medical treatments for the first respondents (sic)”, there was a “total financial loss”. There was no evidence proffered to support the claims of financial hardship.

20. It should not be thought that the Respondents are naïve litigants. They conducted the appeal and preliminary hearings acting for themselves in a competent way. Their failure to produce any evidence to support the claims of financial hardship nor how the sale proceeds of the house were disbursed is significant. I decline to accept their assertions without any evidence to support them.

21. The litigation was not, in fact, particularly complex and even if it were, that is no basis on which to avoid the consequential orders flowing from findings. That the Respondents dispute findings in the judgment, again does not operate to prevent the making of orders consequential on the findings in the judgment.

Interest

22. The Respondents argue that, while the contract to which they were a party included a provision for the payment of interest on money owed, to make orders reflecting that would be to “re-litigate” the question of interest and represent a procedural unfairness. The question of interest to be paid on outstanding sums was squarely a matter raised in the appeal (as it was before the Magistrate) and findings were made in the judgment as to the Appellant’s entitlement to sums owed to it by the Respondents and the interest to accrue on it. There is, in my view, no re-litigation nor any procedural unfairness.

23. Next, the Respondents argue that the rate of 20% is a penalty and unconscionable. The rate formed part of the contract to which the Respondents were a party. I do not accept that the rate included in the contract to which they agreed is, in those circumstances, unconscionable. In the same vein, the Respondents argue that the provision in the contract for the compounding of the interest is prohibited under the Court Procedure Rules 2006 (ACT). That argument falls away given the Appellant’s concession that it is not seeking either to adjust the interest weekly or to compound the interest.

24. Finally, the Respondents argue that in claiming interest over the whole sum owed, the Appellant is seeking a payment of “interest upon interest”. I do not accept that argument. The Appellant’s claims are clearly delineated as to pre- and post-judgment interest and have excluded the interest to be paid on the amounts owing for the Painting Stage and Practical Completion for the purpose of the calculation of post-judgment interest.

25. I do not accept that, from the date of the judgment, the Appellant is entitled to interest other than at the rate specified in the Court Procedure Rules 2006 (ACT).

26. I propose therefore to award interest as follows: (a) Practical Completion - $16, 050 from 7 July 2022 until date of judgment 16 October 2025 at the rate specified in Pts 2.1-2.2 of Sch 2 of the Court Procedure Rules 2006 (ACT) from time to time until the sum is paid. (b) Painting Stage - $63,750, at 20% per annum from 7 July 2022 until 16 October 2025 and thereafter at the rate specified in in Pts 2.1-2.2 of Sch 2 of the Court Procedure Rules 2006 (ACT) from time to time until the sum is paid. (c) On the two sums found owing to the Appellant, $79,800, interest to be calculated at the rate specified in Pts 2.1-2.2 of Sch 2 of the Court Procedure Rules 2006 (ACT) from date of judgment, 16 October 2025, until payment.

Costs

27. The Appellant seeks an order for costs on two bases – that the Respondents pay the Appellant’s costs on the usual basis up to and including 31 May 2024 and, thereafter, from 1 June 2024, the Respondents pay the Appellant’s cost on an indemnity basis.

28. As to the first basis, it was contended that costs should “follow the event” in the usual way and, here, the Appellant was successful in its claim and should have its costs. I accept that contention. I note, however, that the Appellant’s submissions contend that “…at a minimum, the Appellant should be awarded its costs of both the proceedings below and the appeal on the ordinary basis”. No further submissions were directed to whether the Appellant was entitled or did in fact claim the costs of the proceedings before the Magistrate and I do not propose to engage with the contention further.

29. The basis on which indemnity costs are claimed are two offers of compromise made by the Appellant to the Respondents, being offers on 24 May 2024 and 26 August 2024.

30. On 28 July 2022, the Appellant made a “Calderbank” offer of compromise to the Respondents (Calderbank v Calderbank [1975] 3 All ER 333). The offer was in the following terms: …we are instructed the our client it (sic) remains willing and able to re-commence work on the Site provided the following amounts are paid as requested in our open letter to you date 21 July 2022: 1. $63,750 in payment of the 7 June 2022 Tax Invoice for “Painting Stage – Internal and External Painting Completed’; and 2. $36,777.50 in payment of the difference between the permitted inclusion/allowances, and the actual cost of the inclusions/allowances chosen by your clients.

31. The offer was not accepted and after attending a dispute resolution meeting as required by the contract, the proceedings were commenced in which the Appellant claimed $132,733 together with interest of 20% in accordance with the contract or, alternatively, in accordance with the Court Procedure Rules 2006 (ACT), and costs.

32. A counteroffer by the Respondents was not accepted. The Respondents joined a number of Third Parties to the proceedings and those parties were released after an interlocutory hearing.

33. In pursuing indemnity costs, however, the Appellant relies on the offers made on 24 May 2024 and on 26 August 2024.

34. After proceedings were commenced and after the parties had attended an unsuccessful Court ordered mediation, the solicitor for the Appellant made a further Calderbank offer to the Respondents on 24 May 2024. The offer was in the following terms: ...You pay the Plaintiff the sum of $150,000 inclusive of the Plaintiff’s costs and disbursements (Settlement Sum) within 28 days of acceptance of this offer. That upon payment of the Settlement Sum: The proceeding be discontinued with an order to that effect that each bear their own costs and disbursements; and The Third-Parties immediately release you from the liability to pay their costs and disbursements under Orders 6 and 7 of the Interlocutory decision; and That each party, including the Third Parties, enter into a Deed of Settlement and Release with, which we will prepare, that encapsulates the terms of this offer, includes boiler plate terms as to confidentiality etc, and otherwise prevents any further litigation between the Plaintiff and the Third-Parties and yourselves.

35. The offer was expressed to be open until 31 May 2024. It was not accepted. The Respondents made a counter offer on 19 August 2024.

36. On 26 August 2024 following the filing of the Notice of Appeal, the Appellant made a further Calderbank offer that included the following statement: We are therefore instructed to reject the Offer and to make the following Counter-Offer: a. that you pay the appellant the sum of $94,000 (Settlement Sum); b. That subject to you paying the Settlement Sum and the parties, including the Third-Parties, entering into a Deed o f Settlement and Release containing mutual releases and indemnities from all claims (including costs orders and alleged defamation claims) the subject o f the Magistrates Court Proceedings, the Supreme Court Proceedings and the Court of Appeal Proceedings, the parties execute and file consent orders in the respective proceedings to the following effect: 1.That the Supreme Court Proceedings be dismissed. 2. That each party bear their own costs of the Supreme Court Proceedings 3. That the Court of Appeal Proceedings (including your Cross-Appeal) be dismissed. 4. That each party bear their own costs of the Court of Appeal Proceedings.

37. This offer was not accepted. Indemnity Costs

38. The awarding of costs is discretionary and, absent any special circumstances, a successful litigant is entitled to recover their costs from the opposing party. The result must be a fair one having regard to the particular facts and circumstances of the proceedings in the interests of justice: Clarkson Williams Partners Pty Ltd v Vaughan (No 2) [2016] ACTCA 8 at [8], citing Lewis v Chief Executive, Department of Justice and Community Safety (ACT) (No 2) [2014] ACTSC 196.

39. There is a strong public interest and interest of the litigants in the acceptance of reasonable offers of compromise.

40. In determining whether costs ought to be awarded here, where the Appellant served its offer in the form of a “Calderbank letter”, it is necessary to consider whether the offer was “unreasonably rejected”.

41. In Hulanicki v Walton (No 2) [2015] ACTCA 45, the Court said at [14] – [15]: When a Calderbank offer has been made, the issue is whether it was unreasonable to reject the offer, considering all the circumstances of the case, including the apparent strength of each party’s case at the time that the offer was made: Quirk v Bawden (1992) 112 ACTR 1 at 6; Leichhardt Municipal Council v Green [2004] NSWCA 341 at [56]; South Eastern Sydney Area Health Service v King [2006] NSWCA 2 at [90]. In Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435 at [25] the Victorian Court of Appeal noted that other matters that should be taken into consideration when evaluating the reasonableness of a rejection are: (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. Even where it is found that a Calderbank offer should have been accepted and the offeree achieves a result that is no better than the offer, it does not automatically follow that indemnity costs will be awarded against the offeree: Evans v Braddock (No 2) [2015] NSWSC 518 at [49]. Was the result obtained by the Appellant “no less favourable” that the offer?

42. The offer made on 24 May 2024 was “$150,000 inclusive of the Plaintiff’s costs and disbursements”. The affidavit of the Appellant’s solicitor said that, at this stage, the costs and disbursements incurred were in the order of $110,000 plus GST, of which some $22,965 related to the Third Party’s disbursements. As to the offer in August 2024, the Appellant offered to settle with the Respondents paying $94,000 to the Appellant. The Appellant’s solicitor observed that at this stage, the Appellant had incurred in the order of approximately $46,000 by way of disbursements.

43. As a result of the decision, the Respondents will be ordered to pay to the Appellant $79,800 together with interest and costs. The Appellant’s submissions asserted that in relation to both offers the result ultimately obtained was “no less favourable” to the Appellant but gave no basis for that assertion. Certainly, in relation to the second offer, the Appellant’s solicitor calculated the interest to be paid on the sums owed under the judgment as being $46,356.66. The interest, together with the judgment sums of $79,800, comes to $126,156.

44. In relation to the second offer, the result was “no less favourable” to the Appellant than the offer.

Was it unreasonable for the Respondents to reject the offer?

45. The Respondents submitted that the offers were not reasonable as each involved a “full capitulation” and were not genuine offers to compromise. I do not accept that assertion. Both offers and particularly the second set out the basis on which the Appellant asserted that it was a reasonable compromise of the actions, making particular reference to the incurring of disbursements. I find they were genuine offers.

Should an order for indemnity costs be made?

46. As I have said, whether or not such an order is made is a matter for the exercise of discretion.

47. The second offer was made following the filing of the Notice of Appeal and the Respondents were in possession of the Grounds of Appeal when the offer was made.

48. Here there is no doubt that the Respondents acted unilaterally to exclude the Appellant from the building site precipitating the date of Practical Completion and the following financial consequences.

49. Given the amounts involved in the proceedings and the spectre of an appeal, in my view, the Respondents were unreasonable in rejecting the second offer and it is appropriate that an indemnity costs order should be made in the proceedings from 24 September 2024. Orders:

50. The orders of the Court are: (1) The Respondents pay the sums and interest on the sums found to be owed by them as follows: (a) Practical Completion - $16,050 from 7 July 2022 until date of judgment 16 October 2025 at the rate specified in Section 2 of Schedule 2 of the Court Procedure Rules 2006 (ACT) from time to time until the sum is paid. (b) Painting Stage - $63,750, at 20% per annum from 7 July 2022 until 16 October 2025 and thereafter at the rate specified in Section 2 of Schedule 2 of the Court Procedure Rules 2006 (ACT) from time to time until the sum is paid. (c) On the two sums found owing to the Appellant, $79,800, interest to be calculated at the rate specified in Section 2 of Schedule 2 of the Court Procedure Rules 2006 (ACT) from date of judgment, 16 October 2025 until payment. (2) The Respondents pay the Appellant’s costs of an incidental to the appeal on a party and party basis up to and including 24 September 2024 and thereafter to pay the Appellant’s costs on an indemnity basis.

I certify that the preceding fifty [50] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Acting Justice Ainslie-Wallace. Associate: Date: 28 April 2026