Love v Thwaites & Anor [2014] VSCA 56

2 On 23 June 2009, the appellant's proceeding was dismissed. On 8 July 2009, the interlocutory injunction was discharged. Following the discharge of the interlocutory injunction, a judge of the Trial Division directed that there be an assessment of the respondent's damages incurred as a result of the injunction.

3 The assessment of the respondent's damages was heard by a judge in the Trial Division over four days in October 2012. On 14 November 2012, the judge ordered the appellant to pay the respondent damages assessed in the amount of $3,420,389.70 together with interest in the amount of $2,427,258.47.

4 The appellant has appealed the orders made on 14 November 2012. The appellant's grounds of appeal are as follows:

1. That the trial judge erred in law in accepting the evidence of Mr Robert Milner but then made a finding contrary to the evidence that the Appellant was liable for all loss relevant to the design and delay costs with respect to the O'Herns Road Overpass.
2. That the trial judge erred in law in finding that the Appellant foresaw damages flowing from the injunction in March 2003.
3. That the trial judge erred in law in failing to take into account the fact that the road between the southern bound carriageway of the Craigieburn Bypass and the protected area was sufficient for a safe haul road.
4. The trial judge erred in law in accepting the evidence of Mr Benjamin Byth that the alternative haulage route was not suitable as his evidence was that he had not inspected the site, nor measured it nor had any knowledge of the area.
5. The trial judge erred in law when he made findings that there was no evidence of the type of trucks that were used by Abigroup Contractors Pty Ltd on the haul routes when in fact Mr Benjamin Byth gave evidence of the types of trucks that were used by Abigroup Contractors Pty Ltd, the width of those trucks and the necessary haulage road width.
6. The trial judge erred in law when he failed to consider the evidence of the Appellant with respect to the distances between the protected area on the Craigieburn Bypass Road Reservation and the Hume Freeway southern bound carriageway.
7. The trial judge erred in law in finding that there was no delay with the direction that was given by Roads Corporation to Abigroup Contractors Pty Ltd to proceed with the design and construction of the O'Herns Road Overpass and the Water Course 4447 Culvert.
8. That the trial judge erred in law in failing to consider whether Roads Corporation had properly mitigated its loss between the critical period from March 2003 to June 2003.

5 The appellant was the owner of various parcels of land in Epping, north-west of Melbourne. On 11 February 2002, the respondent compulsory acquired from the appellant approximately 25.6 hectares of land and improvements situated at 410 Cooper Street, Epping for the purpose of construction of the Craigieburn Bypass. The land acquired included an area of land on the northern side of the protected area required for the construction of a bridge over the freeway at O'Herns Road. On 15 January 2003, the respondent took possession of this land.

6 On 23 January 2003, Abigroup Contractors Pty Ltd was awarded the contract for Stage 3 of the Craigieburn Bypass. The contract was a design and construct contract. The contract included the design and construction of a bridge over the Craigieburn Bypass at O'Herns Road on a deferred basis. While Abigroup had been provided with a series of concept design plans as part of the tender documents, it was responsible for the design and construction of the works and was entitled to determine the most cost effective design within the road reservation provided it met the respondent's requirements.

7 The terms of the contract between Abigroup and the respondent required the respondent to provide Abigroup with possession of the whole of the land reserved for the construction of the Craigieburn Bypass within seven days of acceptance of tender. While a tenant occupying Clonard agreed with Abigroup to vacate Clonard on 14 February 2003, the appellant obtained the injunction to which we have already referred.

8 At the trial of the assessment of the respondent's claim for damages, the respondent contended that it had incurred costs totalling $3,420,389.70 (including $3,405,139.70 paid to Abigroup) because of the injunction. Interest was sought from 21 December 2004, being the dates upon which payments were made by the respondent. The particulars of the respondent's damages were summarised at trial as follows:

Variation for the Design/Estimating Advice for interchange at Clonard

With the exception of items 4 and item 5, the balance of the damage suffered, $3,405,139.70 represents payment by Roads Corporation to Abigroup pursuant to its obligations arising under and in consequence of the contract. Of that sum, the contract superintendent certified $3,378,170.08, paid on 21 December 2004, as due to Abigroup, later formally confirmed by Contract Variation 5. Extension of Time Advice No 1 accompanied that variation, granting an extension of time for practical completion of 86 days. Roads Corporation contends that the payment of $3,378,170.08 so certified comprised damages flowing directly from the injunction. Roads Corporation contends that the payment of the remaining items also flowed directly from the injunction.[4]

9 The appellant resisted the various claims made against him. Specifically, he raised a number of objections to the assessment. The judge summarised the appellant's contentions as follows:

(a) Roads Corporation and Abigroup did not mitigate the extra expenses arising from the imposition of the protected area, particularly by failing to take up offers of assistance made by Mr Love on 13 March 2003 and at other times.

(b) The additional project costs recovered by Abigroup did not flow directly from the injunction but were caused by Roads Corporations' 'litigate, not mitigate' attitude. In respect of both the watercourse 4447 culvert and the O'Herns Road Overpass, each of Roads Corporation and Abigroup made no meaningful effort to develop design options to avoid the protected area between March and June 2003 to mitigate delay costs. Rather, Roads Corporation unsuccessfully attempted to lift the injunction.

(c) Roads Corporation failed to give timely directions to Abigroup to minimise the ultimate impact of the protected area on the cost of the project. That failure, not the existence of the injunction, caused or contributed to the losses claimed.

(d) Abigroup had not advanced far with detailed design when it learned of the injunction affecting the protected area. The claimed redesign costs were in fact initial design costs that Abigroup was contractually obliged to bear. It was feasible for Abigroup to have completed the project, avoiding the protected area. Not flowing from the injunction, the costs would have been incurred in any event.

(e) Abigroup used the existence of the protected area as an opportunity to recover profit from an under-costed tender on the project.

(f) Roads Corporation did not have the necessary approvals for the O'Herns Road Overpass, which was the cause of the delay claimed by Abigroup. In particular, Roads corporation had not complied with a condition of Federal Government approval under the Australian Land Transport Development Act 1988 (Cth).

(g) Roads Corporation failed to adopt the prudent and feasible alternative to move the entire overpass 20 metres to the north of the proposed northern overpass alignment. While this would have marginally added to the pavement costs it would have eliminated New Jersey Barrier costs, the electrical spotter cost, topsoiling costs and landscaping costs as the southern embankments could have been constructed with the same slope as originally designed.

(h) The capital cost of the relocated culvert did not allow for the savings that had been made or the potential difficulty of excavation through rock.

(i) Alternatively, the actual costs claimed for the O'Herns Road Overpass should be disallowed in part as not flowing from the injunction.

(j) The claim for change to haulage routes was caused by the failure of Roads Corporation to direct that Abigroup remove a tree that was not part of the protected area and adopt the haulage route suggested by Mr Love.

(k) The entrance to the Clonard Homestead was outside the protected area and the costs referred to as the CV06 Injunction amount were not attributable to the existence of the protected area.[5]

10 In his reasons, the judge set out the evidence called and tendered before him in some detail. His Honour set out the principles governing the assessment of damages as follows:

1. In Davinski Nominees Pty Ltd v I&A Bowler Holdings Limited,[6] Kaye J described the basis for the assessment of damages on an undertaking to the court as uncontroversial: damages flowing directly from the injunction and which could have been foreseen when the injunction was granted, following the decisions of the High Court in Air Express Limited v Ansett Transport Industries (Operations) Pty Ltd[7] and European Bank Limited and Robb Evans of Robb Evans & Associates.[8]
2. In Air Express, Aickin J held that in a proceeding of an equitable nature 'the damages should be those that flow directly from the injunction and which could have been foreseen when the injunction was granted'. On appeal, Barwick CJ agreed with the reasoning of Aickin J. Gibbs J identified the generally accepted view to be that 'the damages must be confined to loss which is the natural consequence of the injunction under the circumstances of which the party obtaining the injunction has notice' adding that _'_the party seeking to enforce the undertaking must show that the making of the order was a cause without which the damage would not have been suffered'. Stephen J referred to the court having the power, as far as monetary compensation allows, to make good the harm of which the grant of the injunction was a cause and that but for it he would not have suffered. Mason J said 'generally speaking, so long as the claim for damages is not trivial or trifling, an enquiry should be directed and the defendant will be entitled to recover the loss which is the natural consequence of the grant of the injunction.' The causal connection between the damage and the injunction is to be identified from the purpose for which the undertaking as to damages is designed to serve. That object is to protect a party from damage sustained in the event that it emerges that the plaintiff is not entitled to the relief sought. Its purpose is not to protect the defendant from damage otherwise sustained.
3. In European Bank, the High Court, in a joint judgment, affirmed Air Express, restating the significance of the nature of the undertaking. It is not a contract between parties or some other cause of action upon which a party could sue, but is given to the court for enforcement by the court. The joint judgment emphasised the phrase 'which could have been foreseen'. It is well established that for damage to be reasonably foreseeable it need only be damage of a type or character that is foreseeable or damage of a type or character that could not be considered unlikely.[9] Roads Corporation submitted that the tortious concept 'reasonable foreseeability' is a wider concept than the contractual 'reasonable contemplation'.[10] The High Court in European Bank makes it clear that the inquiry is not whether the actual loss suffered was foreseen at the time the undertaking was given, but is whether loss of a kind actually sustained could have been foreseen.[11]

11 His Honour then dealt with and rejected each of the appellant's contentions. His Honour concluded that the respondent had discharged the onus of proving the quantum of its damages claimed as flowing directly from the injunction and being in respect of damages which could have been foreseen when the injunction was granted.[12]

12 In ground 1, the appellant appeared to make two complaints: first, that the trial judge erred in law in accepting the evidence of a town planner called on behalf of the Roads Corporation, Mr Robert Milner; and secondly, that having accepted the evidence of Mr Milner, the judge then made a finding contrary to Mr Milner's evidence that the appellant was liable for all loss relevant to the design and delay costs associated with the construction of the O'Herns Road Overpass. At the outset one might say that the general acceptance of the evidence of a witness does not necessarily foreclose the possibility of making a finding contrary to the evidence of that witness. That said, we turn to deal with the appellant's argument in respect of ground 1.

13 In his written submissions, the appellant advanced no reason why the judge was not entitled to accept the evidence of Mr Milner. When this point was raised with the appellant in argument, the appellant accepted that, notwithstanding the terms of ground 1, the appellant did not contend that the judge was not entitled to accept the evidence of Mr Milner. Ground 1 was thus concerned with the second of the two complaints referred to above.

14 The appellant's argument on ground 1 centred upon paragraphs [69] and [70] of the judge's judgment. Putting those paragraphs in their context, the judge said:

1. Mr Love focussed his attack on the costs of constructing the overpass on the ultimate intention to provide for a four-lane two-bridge interchange, which I have already noted. In a nutshell, Mr Love contended that Roads Corporation built the northern bridge that it would ultimately have built in any event.

1. It was because of the injunction that the northern bridge was constructed after investigation of alternatives to the contract works. Mr Love contended not only that the decision to construct the northern bridge should have been immediately made but also that it should have been constructed a further 20 metres to the north. Mr Love contended that there was no need to modify the northern overpass structure at all. For that purpose land owned by the Urban Land Corporation should have been compulsorily acquired. Mr Love described his alternative proposal as prudent and feasible. While it would have marginally added to the pavement costs, there would have been other savings, referring to New Jersey Barrier costs, the electrical spotter cost, topsoiling costs and landscaping costs, as the southern embankments could have been constructed with the same slope as originally designed.
2. To expose the misconceptions in this contention, I must return to the Amendment C44 Panel hearings and report. Mr Robert Milner, a town planning expert whose evidence I accept, explained that the intention revealed from the planning history of Amendment C44 was that the overpass to be constructed under the contract was a single bridge within the existing road reserve. That is because the presently anticipated demand from road users only warranted a single bridge overpass without an interchange with the bypass. The Report noted that the City of Whittlesea's Epping North Strategic Plan contemplated, generally, future regional growth and, with O'Herns Road as a major local traffic route, in the longer term the emerging traffic demand would require the provision of ramps connecting between O'Herns Road and the bypass and the duplication of O'Herns Road to the east and west.
3. The Amendment C44 Report makes clear that the current amendment C44 would provide for an interchange that could be upgraded to cater for the future duplication of O'Herns Road and the future ramp connections to the bypass without further amendment to the interchange reservation boundaries. The northern bridge would not be required until sufficient land development has occurred in the surrounding area to generate the level of traffic that would justify the capital expenditure. The Panel noted that there were future contingencies that would affect the decision to construct the northern bridge and interchange and it was not likely to occur for many years.
4. Undeterred, Mr Love contended that the land to the north of the existing road reserve was owned by the Urban Lands Corporation, that the same Minister of the Crown was responsible for Roads Corporation and Urban Lands Corporation, and that providing additional land to Roads Corporation to permit the overpass to be aligned 20 metres to the north only required a wave of the ministerial pen. A simple one on one treaty or contract of sale could achieve it. Mr Milner rejected this suggestion. In his view, acquisition of that land for expanding the road reservation would require further planning scheme amendment.
5. Whether using the proposed location for the future northern bridge was feasible or suitable is beside the point. Roads Corporation and Abigroup respectively had no entitlement or obligation to construct the O'Herns Road bridge at that location from the regulatory approvals or by their contract and the certified additional costs that followed on the direction to do so directly flow from the injunction.
6. Mr Love's contention was misconceived.[13]

15 The appellant's criticism of the judge's treatment of Mr Milner's evidence is without foundation. There is no basis for contending that the judge made findings that were contradictory, or that the judge interpreted Mr Milner's evidence as 'meaning something different'[14] from the evidence Mr Milner actually gave.

16 The appellant's complaint appears to relate to the judge's statement in paragraph [70] of the reasons that the Amendment C44 Report provides for the future duplication of O'Herns Road and the future ramp connections to the bypass without further amendment to the interchange reservation boundaries. The appellant highlights that at page 11 of the Amendment C44 Report the following appears:

In its ultimate configuration, the overpass structure will be widened along its north side to match in with the duplication (widening) of O'Herns Road to the east. Ramp connections would also be provided to the Craigieburn Bypass to and from the north and south of O'Herns Road. The Public Acquisition Overlay for the proposed interchange encompasses the full extent of the ultimate interchange.

17 The appellant contends that acceptance of Mr Milner's evidence precludes the proposition set out in paragraph [70] of the Reasons to which we have referred. We reject that submission. Further, we see no error in his Honour's description of the Amendment C44 Report. Additionally, any difference between the language used in the Amendment C44 Report and paragraph [70] of the Reasons was not (and is not) material to any issue in dispute between the parties or in this appeal.

18 To the extent that the appellant contended that the judge was wrong to allow any costs in relation to the bridge at O'Herns Road because, as originally contemplated, the bridge was originally to be constructed within the road reserve (and not in the protected area), and the later contemplated interchange was to be built north of this position, the appellant's submissions must be rejected. While the bridge was originally planned to be constructed within the road reserve, the actual construction of the bridge at that point had the capacity to disturb the protected area. Indeed, that was the very basis upon which the appellant sought the injunction that was ultimately granted.[15]

19 In argument before this Court, it became apparent that the real complaint the appellant has in respect of paragraphs [69] and [70] of the reasons concerns the findings of liability in relation to items 2A and 2B of the particulars of damages (direct costs to construct northern bridge option and delay costs). These were argued by the appellant as part of ground 2, and will be dealt with below. Ground 1 must be rejected.

20 In ground 2, complaint is made concerning the judge's finding that the appellant foresaw the damages claimed flowing from the granting of the interlocutory injunction. His Honour dealt with the question of foreseeability in paragraphs [34] to [43]. His Honour said:

1. The contract (Contract No 5463) awarded to Abigroup was to design and construct Stage 3 of the Craigieburn Bypass and included the design and construction of an overpass at O'Herns Road. Although Abigroup was provided with concept design plans for tender, it was responsible for the design and construction of the works and was entitled to determine the most cost effective design within the land reservation that met Roads Corporation specifications.
2. Mr Love, who told me he was an experienced engineer and project manager, knew of this contract when he gave his undertaking. On 25 February 2003, an affidavit filed on behalf of Roads Corporation put Mr Love on notice that Abigroup had been awarded the contract on 23 January 2003 and that pursuant to that contract:

(a) Abigroup became entitled to possession on 30 January 2003 of land including the land the object of the injunction;

(b) Failure to give Abigroup clearance to commence work could constitute a breach of clause 27 of the contract allowing Abigroup to make a claim for an extension of time pursuant to clause 35.5 of the contract;

(c) Granting an extension of time pursuant to clause 35.5 of the contract may lead to a delay damages claim pursuant to clause 36 of the contract of up to $169,000 per week plus 10% for profit.

Another affidavit, dated 6 March 2003, informed Mr Love that Roads Corporation had asked Abigroup on 3 March 2003 to consider what impacts an injunction might have on the contract works. Abigroup responded that it would take some weeks for that assessment to be made, as it would need to develop its design sufficiently for that assessment.

1. Mr Love had expert advice from Mr Tom Brock of GHD, a civil engineer experienced in the design of major road projects. Mr Brock was familiar with the detail of the tender documents, having examined the project for an unsuccessful tenderer. Mr Brock reported to Mr Love extensively about the project, the terms of the contract and the details of the tender design. Mr Brock provided some analysis of the consequences that may flow if the injunction was granted. Mr Brock opined that the works could be constructed by avoiding the protected area but as the works were being delivered under a design and construct contract the elements of the detailed design were a matter for the contractor. Gratuitously, Mr Brock opined that the interchange should not be constructed at the location or in the form proposed by Roads Corporation. If the O'Herns Road Overpass was not constructed, there might be no impact on the works and insignificant impact on the required construction activities from the existence of the protected area but if either the overpass or a closed diamond interchange were constructed, avoiding the protected area would have implications for the permanent bypass works and construction phase activities.
2. Mr Brock's assessment is primarily expressed in terms of what can be constructed, rather than whether impact on the works and necessary construction activities may result in variation and delay costs for Roads Corporation in the administration of the contract. No doubt, Mr Love found that emphasis attractive. Mr Brock did not concede full force and effect to the nature of Abigroup's contract. For example, when considering the height of the bypass when it passes along the western side of the Clonard Homestead, a matter that affects the encroachment of cut or fill embankments onto the protected area, he acknowledged that Abigroup was likely to use a different gradient to the concept design in the tender documents, but expressed his opinion on the gradient that he developed for an unsuccessful tenderer. He could not do otherwise without knowing Abigroup's detailed designs but the critical point was that, without affecting variation of the tendered time and cost on which the contract was based and within certain constraints, those detailed designs were not a matter for Roads Corporations or, a fortiori, persons who were not parties to the contract. However, Mr Brock did report on the categories of additional costs that he anticipated Roads Corporation could be exposed to should an injunction be granted. Mr Brock's categories were additional costs of construction, additional costs flowing from the need to redesign parts of the project to avoid the protected area, and damages in the form of delay costs.
3. Using concept design plan drawing no. 51421 provided to Abigroup in the tender documents for contract no. 5463, Mr Brock developed the coordinates that precisely identified the protected area, providing the certainty of definition of the protected area identified by the court as a concern when discharging the interim injunction.
4. On the material, the real possibility of damage being sustained by Roads Corporation flowing from claims being made against it by Abigroup was in issue before Nettle J and his Honour concluded that:

One way or another there is a real possibility that once the design is determined by Abigroup it may impinge directly upon the area sought to be protected, or at least necessitate impingement upon the area sought to be protected_._ If that comes about, Roads Corporation could be caused some delay in reaching agreement with Abigroup on what it proposes and, to that extent, be put at risk of a claim for damages or compensation, and perhaps also claims of the more amorphous or nebulous kind ...[16]

That possibility was also recognised by the requirement that the undertaking be secured. Initially, when, on 20 May 2003, an application to vary the dimensions of the protected area was refused, a guarantee from Bank of Melbourne in the sum of $100,000 was required. On 29 July 2005, Osborn J ordered that an unconditional undertaking from Bendigo Bank Limited for $2,990,364 stand in place of the Bank of Melbourne undertaking as security for the usual undertaking as to damages from Mr Love, which undertaking was renewed.

1. The present significance of Mr Brock's report to Mr Love is that it directed Mr Love's attention, before he gave his undertaking, to three critical facts. Abigroup was the contractor obliged to construct the freeway on a design and construct basis. Abigroup, if so notified, was required to construct the overpass at O'Herns Road while the injunction remained in place. The types or categories of damage, which were likely to be sustained if the injunction ultimately granted was obtained, were identified. As I will explain, each head of damage that Roads Corporation seeks to recover under the undertaking falls within the categories that Mr Brock identified to Mr Love by his report of 6 March 2003.
2. The further land acquisition for the delayed possession area under the contract for the proposed interchange is also relevant to the question of foreseeability of the damage as it was in March 2003, that the Panel issued its Planning Report 'Whittlesea Planning Scheme Amendment C44 O'Herns Road Interchange'. The report followed Panel hearings on 17 and 18 February 2003, after a site visit on 5 February 2003. Mr Love was represented at the Panel hearings and made written submissions to the Panel. Before Mr Love gave the undertaking, he exhibited to an affidavit a copy of contract alignment plan sheet 16 of 21 for contract no. 5463 that locates the delayed possession area under the contract. That area includes land to the southeast of the protected area, centrally locating the protected area in the southeast quadrant of the interchange land.
3. The strategic transport and accessibility objectives in the City of Whittlesea's Epping North Strategic Plan, 2002 identified the need to acquire further land to duplicate the O'Herns Road Overpass as part of a full diamond interchange. The Panel identified that land required for the duplication will be on the north side. The Panel, in the executive summary to its report, reveals something of Mr Love's motives and of what understood of the implications of the injunction to protect Clonard. The report noted:

Love was a major submitter to Amendment C44. His submissions about C44 were largely influenced by his views about the route of the Craigieburn Bypass itself and the validity of the route, the acquisition of his land, VicRoads 'proposal to demolish the Clonard Homestead and other past related decisions.

I will return to this report in dealing with one aspect of Mr Love's objection to the damages assessment.

1. I am satisfied that the nature and extent of the damage that might flow from the injunction was foreseeable in March 2003. I am also satisfied that Mr Love foresaw it. First, there was his own interest in, and inquiries into, the process of land acquisition for the freeway and overpass, informed by his experience as an engineer and project manager. Second, there was the advice he sought and received from Mr Brock. Third, there was the information revealed to Mr Love on the applications for the injunction. Fourthly, almost immediately on the grant of the injunction, Mr Love sought to influence the manner in which Abigroup discharged its contract to minimise variation and delay costs to Roads Corporation arising from the impact of the protected area on the project. For the most part, Mr Love's defence of this assessment, his allegation of a want of mitigation, proceeds on the basis that Roads Corporation did not direct, and Abigroup did not implement, Mr Love's suggested solutions to the issues that were likely to arise from the existence of the protected area.[17]

21 As far as foreseeability was concerned, the judge made two relevant findings: first, that the nature and extent of the damage that might flow from the injunction was foreseeable in March 2003; and secondly, that the appellant actually foresaw the nature and extent of that damage. While ground 2 appears to cavil only with the second of these findings, it is the issue of foreseeability rather than whether the appellant actually foresaw relevant matters that must be determined.

22 The short answer to the foreseeability questions is that his Honour did not err in finding that the nature and extent of the damage that might flow from the injunction was foreseeable in March 2003. As the chronology of facts set out in the Reasons discloses, the nature and extent of the damage that might flow was plainly foreseeable at the time the injunction was granted and at the various times when the respondent sought to vary or discharge the injunction and/or obtain additional security for the appellant's undertaking as to damages. For the reasons given by the judge, the appellant's complaint that the nature and extent of the damage claimed by the respondent was not reasonably foreseeable must be rejected.

23 In the course of pursuing his argument under ground 2, the appellant made complaint about the trial judge's treatment of item 2C of the Particulars of Damage (Redesign of Culvert Crossing No 3) and the judge's treatment of the claim in respect of the redesigned bridge at O'Herns Road (which claim included the direct additional costs to construct a northern bridge (item 2A) and delay costs (item 2B)). In order to understand these claims and the bases for the judge's conclusions, it is necessary to set out in more detail the facts associated with them.

24 The relevant facts in relation to the Redesign of Culvert Crossing No 3 claim may be briefly summarised as follows:

(a) On 13 March 2003, at a meeting between the appellant, the respondent and Abigroup, Abigroup (having been advised of the terms of the injunction) stated that while detailed design was still being developed, one aspect that Abigroup was pursuing was squaring up Culvert Crossing 3.

(b) On 17 April 2003, Abigroup advised the respondent of its intention to commence drainage works, and that it would require access to Culvert Crossing 3 on 12 May 2003.

(c) On 30 April 2003, the respondent's solicitors wrote to the appellant's solicitors advising that Abigroup had undertaken its assessment of the impact of Culvert Crossing No 3 on Clonard. As a result, Abigroup requested access to the southern 20 metres of the protected area. The access was said to be necessary for the reconstruction of Culvert Crossing 3. On the same day, there was a further letter from the respondent's solicitors to the appellant's solicitors seeking to vary the injunction by varying the southern border of the protected area by 20 metres.

(d) On 2 May 2003, the appellant's solicitors wrote to the respondent's solicitors refusing the 30 April 2003 request to shift the boundary of the protected area in order for the reconstruction of Culvert Crossing No 3 to go ahead according to Abigroup's then design.

(e) On 15 May 2003, Abigroup provided the respondent with design options and an estimate of future delay in relation to Culvert Crossing No 3. On the same day there was a meeting between the respondent and the appellant to discuss the effect of the injunction on Culvert Crossing No 3 and potential costs that might be incurred.

(f) On 16 May 2003, the respondent wrote to Abigroup noting that it could not advise on the acceptability of the drainage design for Culvert Crossing No 3 with any certainty due to the injunction.

(g) On 19 May 2003, the respondent issued an application seeking to have the injunction lifted to enable construction of Culvert Crossing No 3 to go ahead.

(h) On 20 May 2003, the respondent was unsuccessful in its application to vary the injunction to enable the construction of Culvert Crossing No 3 to go ahead. However, the appellant was ordered to provide further security in the form of a bank guarantee in the sum of $100,000.

(i) On 5 June 2003, the respondent advised Abigroup that, as the appellant had paid the additional security ordered by the Court, Abigroup was not able to carry out the proposed Culvert Crossing No 3 drainage works inside the protected area.

(j) On 19 June 2003, Abigroup notified the appellant that they were required to amend the design for Culvert Crossing No 3 to ensure all work was clear of the protected area. Abigroup proposed to shift the Culvert Crossing approximately 60 metres to the south.

(k) On 3 July 2003, there was a site meeting. Minutes for the meeting note that Abigroup had revised the design for Culvert Crossing No 3.

(l) On 10 July 2003, Abigroup provided the appellant with a detailed design for Culvert Crossing No 3 which avoided the protected area.

(m) On 17 September 2003, Abigroup provided the respondent with details of the additional costs incurred to that time as a result of the restricted access to the protected area. These details included the redesign costs of the Culvert Crossing in an amount of $20,706 together with $2,500 for excavation costs associated with the revised design.

(n) In late-2004, after the claim and all supporting documentation was assessed by the project manager and the senior project delivery engineer as being reasonable, the respondent approved payment for the redesign of the Culvert Crossing in the sum of $23,260. This amount was then paid by the respondent to Abigroup.

25 The appellant submitted to the judge that the redesign work for the culvert was unnecessary because the detailed design of the culvert had not been commenced prior to 6 March 2003. The judge rejected this contention, saying that it was 'inconsistent with the minutes of design team meetings'.[18] With respect, the judge was plainly correct. The evidence well supported the conclusion that the modest amount claimed by Abigroup from the respondent, in relation to Culvert Crossing No 3, was caused by and payable as a result of the existence of the injunction. Further, the appellant was well on notice of his likely liability in respect of this matter having regard to the correspondence that passed between the parties concerning the respondent's requests to vary the injunction so as to permit the culvert to be constructed on the southern boundary of, and within, the protected area.

26 We turn now to consider the more substantial claim in relation to the northern bridge option at O'Herns Road and the related delay costs. The relevant facts in relation to this aspect of the claim may be summarised as follows:

(a) On 7 March 2003, the respondent wrote to Abigroup informing it of the injunction and attaching a drawing of the protected area.

(b) In March 2003 the Panel appointed to consider the O'Herns Road Interchange - Amendment C44 to the Whittlesea Planning Scheme - recommended the adoption of Amendment C44 to provide for construction of a full diamond interchange between Craigieburn Bypass and O'Herns Road. The Panel recommended the initial stage of construction include a bridge at O'Herns Road over the Bypass, with no ramp connections to the Bypass (interim design). The interim design was consistent with the tender drawings 514198 and 514121 which showed the positioning of the interim, or first stage, dual lane overpass at O'Herns Road.

(c) The design for the ultimate O'Herns Road diamond interchange provided for the interim O'Herns Road Overpass to be widened to the north side to match in with the duplication (widening) of O'Herns Road to the east. Ramp connections were also to be provided to the Craigieburn Bypass from the north and south of O'Herns Road.

(d) At the meeting on 13 March 2003 at the respondent's site office, Abigroup noted that changes to its tender design that would be necessary to minimise the impact on the protected area would come at a cost and that Abigroup would not bear that cost. Neither Abigroup nor Mr Mavroyeni of the respondent mentioned specific costs which may be incurred apart from those arising from the proposed relocation of the culvert by Abigroup.

(e) At a meeting on 18 March 2003, Abigroup confirmed that it had been instructed by the respondent that it was only required to construct the O'Herns Road overpass interim design, being the southern overpass and excluding ramps or widening to include the northern overpass.

(f) At a site meeting on 3 April 2003, the O'Herns Road Overpass was discussed and Abigroup advised that it was expecting to provide a response within the next few days as to the works required for the Craigieburn Bypass within the protected area.

(g) On 24 April 2003, the respondent wrote to the Minister for Transport advising of its adoption of Amendment C44 for the reservation of additional land required to construct the O'Herns Road diamond interchange.

(h) On 26 May and 5 June 2003 the appellant's solicitor wrote to the respondent's solicitors suggesting, among other things, that if the northern bridge was used to construct the O'Herns Road overpass its construction would not impact upon the protected area.

(i) By letter dated 4 June 2003, Abigroup informed the respondent that the redesign and construction of the bypass to avoid the protected area, including the interim arrangement at O'Herns Road, would require an extensive amount of preliminary design. Abigroup provided an estimate of redesign costs of between $10,000 to $15,000. Abigroup advised it had commenced the redesign work earlier requested by the respondent in order to mitigate potential impact on the project.

(j) On 20 June 2003, Abigroup provided design sketches to the respondent showing options for the re-arranging of the works so as to avoid the protected area.

(k) On 7 July 2003, Abigroup provided concept design sketches and budget estimates to the respondent for the extra over costs to construct the O'Herns Road overpass so as to avoid the protected area if the southern bridge of the proposed interchange was to be used at the overpass. The budget estimates for extra over costs for construction works alone were in the order of $2 million.

(l) On 24 July 2003, Abigroup provided an account for detailed design work in the amount of $19,469.62 following the design variation to avoid the protected area. This amount was assessed as reasonable by the respondent and paid to Abigroup.

(m) At a meeting on 4 September 2003, Abigroup confirmed that the then current design for the O'Herns Road overpass utilising the southern bridge still impacted upon the protected area.

(n) By letter dated 12 September 2003, the respondent served the appellant with a notice of intention to acquire the land identified by Amendment C44 required for the construction of the full diamond interchange at O'Herns Road.

(o) On 10 November 2003, the appellant applied to the Court for an injunction to restrain the acquisition of further land pursuant to Amendment C44. The application was heard on 20 November 2003, and dismissed on 4 December 2003.

(p) On 27 November 2003, the Notice of Acquisition of land acquired from the appellant pursuant to Amendment C44 for the future construction of the diamond interchange was gazetted.

(q) By letter dated 11 December 2003, the respondent informed the appellant of its intention to take physical possession of the land acquired for the future construction of the diamond interchange.

(r) On 16 December 2003, the respondent informed Abigroup of the likelihood of the injunction being in place on 22 April 2004 thus preventing the planned works from commencing in accordance with the contract unless additional works were undertaken to ensure the protected area was undisturbed. The respondent requested Abigroup provide estimates for the retaining wall options being considered including impact, cost and time estimates.

(s) On 6 January 2004, the respondent prepared an inter-office memorandum regarding its options given the impact of the injunction on the construction of the O'Herns Road interchange. The recommendations in the memorandum were made on the likely assumption that the injunction would remain in place until at least October 2004. The memorandum recommended that the respondent determine the optimal solution involving the construction of a retaining wall on either the southern or northern alignment of O'Herns Road as this option would avoid disturbing the protected area.

(t) At a meeting on 14 January 2004, the respondent asked Abigroup to investigate viable options for the construction of the O'Herns Road overpass without impacting upon the protected area.

(u) By letter dated 11 February 2004, the respondent wrote to Abigroup regarding the 14 January 2004 meeting and again requested Abigroup to investigate viable options for the construction of the O'Herns Road overpass without impacting upon the protected area. The respondent emphasised the need to resolve the design and cost options as soon as possible.

(v) On 27 February 2004, the respondent independently engaged Hyder Consulting (Aust) Pty Ltd ('Hyder') to develop and assess alternative O'Herns Road Overpass design options for the most cost effective method of constructing the O'Herns Road Overpass.

(w) On 2 and 3 March 2004, Abigroup provided the respondent various alternative design options and cost estimates to work around the protected area to construct the O'Herns Road Overpass interim arrangement. Abigroup recommended constructing the northern bridge alignment in the interim (in place of the southern bridge alignment) with a low height retaining wall as close as possible to the northern edge of the protected area. Abigroup considered this the most cost effective option.

(x) On 15 March 2004, Hyder provided the respondent with its review of the O'Herns Road overpass options. Hyder recommended constructing the overpass using the northern alignment rather than the southern alignment as the interim arrangement.

(y) On 19 March 2004, a meeting was held during which the respondent advised Abigroup that construction of the northern overpass would be its preferred option. Abigroup sought clarification of the request in writing in order to finalise the design.

(z) On 31 March 2004, a little over one year after the injunction was granted, the respondent wrote to the appellant seeking consent to the discharging of the injunction on the basis that there were no reasonable alternatives to proceed with the works pursuant to the contract without interfering with the protected area. The respondent referred to changed circumstances since the injunction was granted including the Amendment C44 land acquisition. The respondent referred to the cost estimates received from Abigroup for the five options identified and investigated which ranged from $4,890,000 to $8,317,309. The request to discharge the injunction was not agreed to and the injunction remained in place.

(aa) By letter dated 15 April 2004, the respondent directed Abigroup to proceed to design and construct the overpass at O'Herns Road in a manner different to the original works to ensure that the protected area remained undisturbed and that there was no breach of the injunction.

27 The appellant submitted that the judge was wrong to allow the amounts paid by the respondent to Abigroup being the additional costs of constructing a bridge to the north of where the original bridge was to be constructed and in allowing the amount referable to the 10.2 weeks of delay which the respondent said was caused by the time needed to consider the various options and to redesign what had originally been proposed. In substance, the appellant contended that while the initial stage of the bypass construction required only one bridge at O'Herns Road, an interchange (involving two bridges) was ultimately contemplated. It was then said that Abigroup and the respondent could simply have chosen to build the northern bridge, which they in fact built, away from the protected area at no additional cost to the respondent. As the judge noted, this contention also involved the proposition that further land could and/or should have been acquired from another statutory body (the Urban Land Corporation).

28 As the judge noted, the question of whether the two bridge interchange would be constructed at any and what point of time in the future was one of speculation. Indeed, some 10 years after these events occurred, no such interchange has yet been constructed. But for the injunction, the respondent would have constructed a bridge to the south of the bridge actually constructed. This bridge might one day have been the southern bridge of a two bridge interchange. Because of the injunction, the respondent was required to construct a bridge to the north of the bridge originally proposed. This involved the incurring of the additional direct costs referred to in item 2A of the Particulars of Damages. Further, having regard to the complexity of the issues and matters that needed to be debated, the claimed (and paid) delay period of 10.2 weeks (assessed under the contract at $2,284,953) could not have been held by the judge to have been unreasonable. The respondent was liable to pay this amount under the contract, and the liability to pay was brought about by the existence of the injunction. With respect, the judge was plainly correct in the way he dealt with these issues, and in relation to his assessment of them.

29 Again, as to the issue of foreseeability, it is of some note that on 31 March 2004, a little over a year after the injunction was granted, the respondent wrote to the appellant seeking to discharge the injunction and noting cost estimates of the various options in relation to the bridge which ranged from $4,890,000 to $8,317,309. Notwithstanding notice of these matters, the appellant again refused the respondent's request to discharge the injunction.

31 Grounds 3 to 6 deal with the 'change to haulage routes' claim of $193,600.[19] Essentially, the complaints made by the appellant are that the judge erred:

(a) in failing to find that the road between the southern bound carriageway of the Craigieburn Bypass and the protected area was sufficient for a safe haul road (ground 3);

(b) in accepting the evidence of Mr Benjamin Byth that an alternative route contended for by the appellant was not suitable - it being contended by the appellant that Mr Byth had not inspected the site, nor measured it, nor had any knowledge of the relevant area (ground 4);

(c) in wrongly finding there was no evidence of the type of trucks that were used by Abigroup on the haul routes (ground 5); and

(d) in failing to consider the distances between the protected area on the Craigieburn Bypass road reservation and the Hume Freeway southern bound carriageway (ground 6).

32 Mr Byth was Abigroup's project manager (earthworks and drainage) for the relevant part of the project. He gave evidence as to the unsuitability of the appellant's proposed haul road between the site of the bypass and the protected area. While Mr Byth was cross-examined at some length on the issues relevant to grounds 3 to 6, the short answer to these grounds is that the material does not disclose any error in his Honour's acceptance of Mr Byth's evidence on these matters.

33 The judge dealt with the haul route issue in paragraph [82] of his reasons as follows:

1. Mr Love submitted that the area between the protected area and the bypass was sufficient for the movement of articulated dump trucks and Abigroup could have avoided the need for alternative haul routes to avoid the protected area. Mr Love developed this submission upon an incorrect assumption that the largest vehicles using the haul road were articulated dump trucks referred to as 'Moxies', and on some measurements that he had taken of the distance between the protected area and certain points on the 'as constructed' bypass. Further, he gave no evidence of observations of the use of the haulage route by Abigroup during construction, instead extrapolating generally from his own experience with trucks in quarries. This evidence was of no value and I prefer the direct evidence of Mr Byth for Roads Corporation that the gap between the bypass and the eastern boundary of the protected area could not have been used as a haulage route without additional work to make it suitable.[20]

34 The appellant makes complaint that in dealing with this issue, the judge did not say more about the appellant's evidence on the topic. From this it is inferred that the judge erred in failing to have regard to the appellant's evidence. We reject these submissions. As was said in Whisprun Pty Ltd v Dixon,[21] a judge's reasons are not required to mention every fact or argument relied upon by a losing party as relevant to an issue. Specifically, his Honour was not required to set out in his reasons the various opinions of the appellant on the suitability or otherwise of particular areas of land for potential use as a haulage route. Even less, in the circumstances of this case, was the judge required to refer to measurements taken by the appellant in order to support the appellant's opinions.

35 In argument before us, the appellant took the Court to two photographs taken looking South from O'Herns Road towards his property and the protected area. The photographs show a one way path for vehicles on a flat area of land adjoining the boundary of the protected area. The path appears to be straight until it turns in the foreground of the photographs and avoids a tree in the protected area. The appellant noted that while the trunk of this tree was in the protected area, the tree itself was exempted from the operation of the injunction and could have been removed by the respondent. It was then submitted that the path shown in the photographs could have been used as an appropriate haul road at little or no cost to the respondent.

36 However, in evidence, Mr Blyth said that in 'typical haul road scenarios one would certainly wish to have enough width for a two way access for haul traffic with a distance between those two opposing streams of traffic and appropriate drainage control and other such controls on the haul road'. When the question of two way access was raised with the appellant in argument, he conceded that there was likely a fifty metre stretch of the track that was not wide enough for two way access. The appellant then contended that in an area where care had to be taken and safety was a priority, a system could be devised that would require one vehicle to wait while another traversed the narrower part of the path.

37 That said, in the present case, it is sufficient to say that so far as the haul route issues were concerned, his Honour was entitled to accept the evidence of Mr Byth. Further, his Honour's conclusions were, in any event, well supported by the evidence. Specifically, ground 5 is misconceived in that the judge did not make findings that there was no evidence of the type of trucks that were used by Abigroup on the haul routes. To the contrary, his Honour analysed the evidence given and concluded correctly that the claim for a change to haulage routes was made out by the respondent. Grounds 3, 4, 5 and 6 must be rejected.

38 In ground 7, the appellant appears to make complaint about a failure by the judge to find that some or all of the delay for which the respondent claimed damages was unreasonable, or was not (in any event) a result of the injunction. However, the question was not whether there was 'no delay' with the direction to proceed with the design and construction of the O'Herns Road Overpass, but rather whether any (or all of any) delay in formulating the northern bridge option was unreasonable so as to disentitle the respondent from recovering damages in respect of it and/or so as to negate any causal link that might otherwise be established.

39 The factual background to these issues was set out by the judge as follows:

1. On 4 June 2003, Abigroup informed Roads Corporation that extensive redesign for the construction of the Bypass, including the interim arrangement at O'Herns Road, to avoid the protected area was required. The estimate of redesign costs was $10,000 to $15,000. Abigroup had commenced the redesign work to mitigate potential impact on the project. During June and July 2003, Abigroup provided Roads Corporation with concept design sketches and budget estimates for the extra over costs to construct the overpass to avoid the protected area. The budget estimates for extra over costs for construction works alone were in the order of $2 million.
2. On 24 July 2003, Abigroup accounted for detailed design variation work to avoid the protected area amounting to $19,469.625. This amount was assessed as reasonable by Roads Corporation and paid to Abigroup.
3. At a meeting on 4 September 2003, Abigroup confirmed that the current design for the O'Herns Road Overpass still affected the protected area. On 12 September 2003, Roads Corporation served Mr Love with a Notice of Intention to Acquire the land identified by Amendment C44, the interchange land. The interchange land included the land required for the construction of the northern overpass of O'Herns Road.
4. On 10 November 2003, Mr Love commenced a proceeding in this court to restrain the acquisition of the interchange land pursuant to Amendment C44. On 27 November 2003, the Notice of Acquisition of Mr Love's land for the interchange was gazetted. The proceeding was dismissed on 4 December 2003 and on 11 December 2003, Roads Corporation informed Mr Love of its intention to take physical possession of the interchange land. The acquisition of this further land made it possible to avoid the impact of the O'Herns Road Overpass on the protected area by constructing the proposed northern bridge for the interchange (rather than a revised design of the southern bridge) as the interim solution.
5. On 16 December 2003, Roads Corporation informed Abigroup that the injunction was likely to still be in place on 22 April 2004, when, under the contract, the overpass works were scheduled to commence. The design of the embankment was critical. Roads Corporation sought estimates for retaining wall options including impact, cost and time estimates. Through January and February 2004, working on the assumption that the injunction would remain in place until at least October 2004, Roads Corporation considered its options, with internal advice that the optimal solution was a retaining wall on either the southern or the northern alignment of O'Herns Road to avoid disturbing the protected area. Roads Corporation asked Abigroup to investigate viable options for the construction of the overpass, emphasising the need to resolve the design and cost options as soon as possible.
6. On 27 February 2004, Roads Corporation independently engaged Hyder Consulting (Aust) Pty Ltd to develop and assess alternative design options for the most cost effective construction of the overpass.
7. On 2 March 2004, Abigroup provided Roads Corporation with various alternative design options and cost estimates to work around the protected area when constructing the overpass. Abigroup recommended that the most cost effective option was to construct the interim overpass on the northern bridge alignment with a low height retaining wall as close as possible to the northern edge of the protected area. On 15 March 2004, Hyder made substantially the same recommendation - that Roads Corporation construct the overpass using the northern alignment rather than the southern alignment as the interim arrangement.
8. On 19 March 2004, Roads Corporation advised Abigroup that construction of the northern overpass would be its preferred option. Abigroup sought written clarification of the request in order to finalise the design. On 31 March 2004, Roads Corporation invited Mr Love to discharge the injunction, as there were no reasonable alternatives for proceeding with the contract works without interfering with the protected area. Roads Corporation informed Mr Love of Abigroup's cost estimates for five identified and investigated options, which ranged from $4,890,000 to $8,317,309. Mr Love declined the request to discharge the injunction.
9. On 15 April 2004, to ensure that the protected area remained undisturbed and that there was no breach of the injunction, Roads Corporation directed Abigroup to design and construct the overpass in a different manner to the tender design. But for the injunction, Abigroup would have built the original interim design, the southern overpass, on the original land that had been acquired for the Bypass and the O'Herns Road Overpass.
10. The construction of the O'Herns Road Overpass as the northern bridge of the overpass partly on the original land and partly on the land further north, was only possible by reason of the land further north being acquired for the diamond interchange pursuant to Amendment C44. The most cost effective option for avoiding the protected area when constructing the overpass was for the northern bridge of the overpass to be built with some modifications in the form of a retaining wall. This option could not have been built before the Amendment C44 land was acquired in late 2003.[22]

40 His Honour then determined the relevant issues so far as this ground is concerned as follows:

1. Mr Love also contended that the delay in formulating the northern bridge option was unreasonable and the delay losses did not flow from the injunction. Mr Love was critical of the time taken by Roads Corporation to issue the direction to proceed with the design and construction of the northern bridge. These contentions were not advanced by reference to the terms of the contract. Clause 33 governs the progress and programming of the works and clause 35.5 governs extensions of time for practical completion. When, and for how long, the superintendent should certify an extension of time for practical completion usually requires careful evaluation of the current construction program. Mr Love did not ground his submission in evidence of the proper approach to be taken by the superintendent in assessing claims for extension of the time for practical completion.
2. I have set out above the chronology of relevant events, which reveals that design work had commenced on the original southern overpass bridge prior to June 2003 and the need for redesign because of the protected area was recognised. There were significant estimates for the costs of additional works to avoid the protected area while building the bridge contemplated by the contract. That the design still affected the protected area was noted and discussed in September 2003. At this time, the acquisition process for the interchange land was underway, which land, once acquired could enable construction of the northern bridge first, if this were considered a better solution to construct without interfering with the protected area, as it ultimately was. Abigroup was then directed to evaluate options of this sort and Roads Corporation did likewise. None of this work or these actions would have been necessary were it not for the injunction and the protected area.
3. Mr Love questioned why such directions and investigations were not taken much earlier. I accept that it is proper and appropriate for Roads Corporation to consider all options and consequences carefully (including costs consequences) before issuing a direction as they did. Mr Mavroyeni told me that he did not give that direction when he first informed Abigroup about the protected area because he was being careful about costs, careful to understand the consequences of a direction. The process adopted by Roads Corporation took into consideration what planning work, what design and what construction would be necessary in order to accommodate a change from Abigroup's tender design. That information was needed before a direction could be considered. I am satisfied that it was prudent for Roads Corporation to take the time to consider the options, to have Hyder, previously engaged for this express purpose, independently assess the options and finally determine the most appropriate option prior to the Superintendent issuing a direction. Mr Love has not persuaded me otherwise.
4. Further, the events were complex and the capacity to extend the footprint of the works beyond the land originally reserved evolved over time as I have explained. There was in any event, a significant period from the contract start date until the overpass works were scheduled. Precisely when within that period, and why, critical steps fell behind in the construction program was not identified by Mr Love as a basis to challenge the assessment by Roads Corporation and the certification of the superintendent of the delay claim. Roads Corporation led detailed evidence as to the sequence of events in 2003 and as to the time taken between December 2003 and April 2004 to finalise the concept design. Mr Love did not challenge that evidence. There could not be, and was not evidence of, any presumption by Roads Corporation at that time that Mr Love would be paying for these costs under his undertaking.[23]

41 In our view, and for the reasons given by the judge, there was no basis for the appellant to contend that any delay was unreasonable. Nor was there any basis for contending that the delay losses claimed did not flow from the injunction. For the reasons given by the trial judge, we would reject both of these contentions made by the appellant. It follows that ground 7 must be rejected.

42 In ground 8, complaint was made by the appellant that the judge failed to consider whether the respondent had properly mitigated its loss for the period from March 2003 to June 2003. The appellant's submissions under this ground centred on the proposition that the appellant's views should have been listened to and accepted by the respondent and Abigroup when it came to any redesign that the injunction might have necessitated. As the appellant put it, because he was potentially liable to pay damages in relation to the granting of the injunction, he had an interest in the performance of the contract, and the respondent and Abigroup were bound to take that interest into account when performing the contract.

43 Additionally, the appellant submitted that principles of mitigation of damage mandated that the respondent had to 'demonstrate by way of positive proof that real timely steps were taken to avoid the loss that [was] claimed'.

44 We reject these submissions. Assuming for present purposes that rules in relation to mitigation of damage had application in this case, there was in our view no basis for the judge to conclude that these principles operated to reduce any part of the respondent's claim against the appellant.

45 Under the contract between the respondent and Abigroup, it was Abigroup that was entitled to determine the most cost effective design for the performance of the works. Without creating a variation of the tendered time and costs upon which the contract was based, details of design were not a matter for the respondent (or indeed any other person). There was no basis upon which the Roads Corporation could require Abigroup to allow the appellant to be involved in the design and construction process. With respect, the matter was put correctly by the judge when his Honour said:

1. Mr Love could not identify any basis that permitted him to be involved in the design and construction process. It was not a consequence of obtaining an injunction, or of having given an undertaking to the court. Roads Corporation had contractually agreed that design and construction were Abigroup's responsibility based on the concept design and specifications submitted for tender. Neither the want of further meetings and discussions between Mr Love and Abigroup, nor the fact that Mr Love pointed, in general terms, to other ways in which he considered the works might have been designed or constructed, or the contract administered, established a want of causal connection between the injunction and the unchallenged contractual entitlements of Abigroup. No witness for either Roads Corporation or Abigroup accepted that Mr Love's suggested designs, construction proposals, or contract administration approach, in those respects that were actually put to them in the witness box, were appropriate.[24]

46 So far as principles of mitigation of damage are concerned, the judge said:

Mr Love's principal contention was that there was a failure to avoid or mitigate the damage that could flow from the injunction. The concept of mitigation is, principally, a common law doctrine that refers to the manner in which a claimant has avoided the consequences of a wrong, whether a tort or a breach of contract. MacGregor on Damages[25] suggests that this is the only exact use of the term, but its principal meaning comprises three different, closely interrelated, rules; a claimant cannot recover for avoidable loss, a claimant can recover for loss incurred in reasonable attempts to avoid loss and the claimant cannot recover for an avoided loss. As the classic statement of the principle by Viscount Haldane in British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Rail Co of London Ltd[26] demonstrates, the concept of mitigation is a necessary corollary to the compensation principle that serves to reduce the overall cost to the community of legally compensable injury. A defendant must only compensate for losses actually sustained.[27]

47 As we have said above, for present purposes, it may be accepted in the appellant's favour that the principles underlying the concept of mitigation of damage have application (at least by analogy, if not directly) in this case. That said, in European Banking Ltd v Evans,[28] the High Court said:

1. In Air Express, Mason J said that there was little to be gained from an examination of the authorities dealing with causation of damage in contract, tort and other situations; the Court was better advised to look to the purpose which the undertaking as to damages is to serve and to identify the causal connection or standard of causal connection which is most appropriate to that purpose.
2. A party seeking an equitable remedy is required to 'do equity' and this is the origin of the requirement that the party giving an undertaking as to damages submit to such order for payment of compensation as the court may consider to be just. Given its origin and application to varied circumstances in particular cases, the process of assessment of compensation cannot be constrained by a rigid formulation.[29]

48 The judge applied these principles to the assessment of the respondent's damages. With respect, that was an entirely correct approach. The appellant has not demonstrated any error in the judge's approach. No error having been demonstrated in respect of the judge's application of any principle concerning the assessment of the respondent's damages, ground 8 must be rejected.

49 During the course of argument, the appellant made complaint about the award of interest in the sum of $2,427,258.47. While there was no ground of appeal that complained about the award of interest, the appellant contended that one of the reasons the interest amount was so high was because the respondent delayed in pursuing the assessment of its damages. Initially, the appellant contended that the respondent delayed from 2004 until the hearing before the primary judge in 2012. However, when it was pointed out in argument to the appellant that the respondent could not have commenced to prosecute its claim for damages until the injunction was discharged in July 2009, the submission then became that there was unacceptable delay between July 2009 and the hearing in 2012.

50 The respondent gave two answers to the appellant's complaint in respect of the award of interest. First, the respondent noted that there was no ground of appeal directed to the question of interest. Secondly, the respondent contended that this

was a complex matter, and that time was needed to obtain relevant material from Abigroup in relation to the assessment of the respondent's damages.

51 While the matter was of some complexity, we do not think that the elapse of time between July 2009 and the hearing in 2012 can be explained entirely by reference to that complexity. That said, the respondent is correct to note that there is no ground of appeal dealing with the question of interest. Further, in argument the appellant ultimately conceded that his complaints concerning the question of interest fell to be determined by reference to his success or otherwise in respect of his grounds of appeal. In our view, this concession was correctly made, particularly having regard to the rate of interest ordered by the judge[30] and the fact that, during the period from the discharge of the injunction in July 2009 until the hearing before the judge, the appellant had the use of the money which he is now liable to pay to the respondent.

53 I have had the benefit of reading, in draft form, the reasons of the Chief Justice and Beach JA. I agree, for the reasons their Honours give, that the appeal should be dismissed.

54 This appeal illustrates the stringency of the 'usual' undertaking for damages given by a party who succeeds in obtaining an interlocutory injunction.

55 As their Honours note, the usual undertaking is 'to abide by any order the

Court may make as to damages in case the Court shall hereafter be of the opinion that the defendant shall have sustained any, by reason of this order, which the plaintiff ought to pay'.

56 On 6 March 2003 Mr Love was granted an interlocutory injunction to prevent the demolition or disturbance of a part of the property known as Clonard which was defined by four co-ordinates. This became the 'Protected Area'. An earlier application for an interlocutory injunction had been refused, although the judge had at that time been persuaded that there was a serious question to be tried as to whether the compulsory acquisition of Mr Love's land was vitiated on a number of grounds. Those grounds included that the decision to compulsorily acquire ignored the availability of an alternative strip of land. The decision was also challenged on the basis of a failure of an advisory committee to provide for minor route variations sufficient to save Clonard and other structures of historical significance.[31] His Honour left open the possibility that if it was later demonstrated by more precise drafting and cogent evidence that certainty and the avoidance of damage was possible, he would be prepared to make the order then sought.[32] At the time the injunction was granted the judge then took the view that the balance of convenience now favoured the grant of the injunction on terms which identified with precision the area subject to the restraint.[33]

57 The injunction was conditioned on two undertakings: the usual undertaking as to damages I have already mentioned, and an undertaking that Mr Love would not seek an advance payment from VicRoads of the compensation, or any part of it, which was payable or might be payable in respect of the compulsory acquisition of so much of Mr Love's property as constitutes the Clonard area.[34] Security was given to support the undertaking for damages.

58 The injunction was varied from time to time, as was the security on which it was conditioned, until it was discharged on 8 July 2009 when Mr Love was unsuccessful at trial. On an assessment of the damages incurred as a result of the injunction, Mr Love was ordered to pay damages in the amount of $3,420,389.70 together with interest in the sum of $2,427,258.47.

59 In European Bank Limited v Evans[35] the High Court observed that:

[T]he undertaking as to damages is given to the court, for enforcement by the court; it is not a contract between parties or some other cause of action upon which one party can sue the other. It is worth repeating the obvious proposition that such an undertaking is not lightly to be given.[36]

The undertaking as to damages and its origins in equity practice of the nineteenth century, if not earlier, were explained by Aickin J in Air Express and by Gleeson CJ, Gummow, Kirby, Hayne and Crennan JJ in Mansfield v Director of Public Prosecutions (WA). The authorities discussed in Mansfield included Russell v Farley, where Bradley J had explained the requirement of the undertaking as a response to the anxiety entertained by the court that otherwise its interlocutory order might lead to damage for which there could be no redress except by an order for costs.

...

A party seeking an equitable remedy is required to 'do equity' and this is the origin of the requirement that the party giving an undertaking as to damages submit to such order for payment of compensation as the court may consider to be just.[37]

61 In the circumstances arising here, Mr Love was given an opportunity to consent to the discharge of the injunction, including by letter dated 31 March 2004 from the solicitors for the Roads Corporation which adverted to the significant costs associated with the overpass and outlined the need for the urgent discharge of the injunction on the basis of changed circumstances which it identified. The invitation to discharge the injunction was repeated in a letter from the solicitors for the Roads Corporation dated 29 April 2004, which advised that the loss and damage caused by the injunction was ongoing and would be claimed pursuant to the undertaking as to damages in the event that the Roads Corporation was successful. On each occasion Mr Love refused to discharge the injunction and the undertaking as to damages continued in force.

62 While there is no suggestion that the usual undertaking was here given lightly, the consequences that have flowed from the failure of Mr Love to make out his case at trial have been significant. In my view, these consequences provide a salutary lesson to practitioners and their clients to appreciate the conditions governing the grant of an interlocutory injunction. The usual undertaking carries serious risks; it would be wholly erroneous to view it as no more than a ritual or a formality.

[1] While the court documents name two defendants to the proceeding below and two respondents to this appeal (The Honourable Johnstone William Thwaites and the Roads Corporation), the named first defendant/first respondent took no part in the assessment of damages below or in this appeal.

[2] The usual undertaking being 'to abide by any order the Court may make as to damages in case the Court shall hereafter be of opinion that the defendant shall have sustained any, by reason of this order, which the plaintiff ought to pay'.