NETLINE PTY LTD v QAV PTY LTD

The [appellant] pay [the respondents'] costs with respect to the assessment of damages, including the costs of the assessment before Master Sanderson and of the assessment before Justice Whitby, and of the issue of costs, to be taxed if not agreed.

1. The appellant submitted that there should be no order as to costs. In the alternative the appellant sought orders that:

(1) The [appellant] pay [the respondents'] costs of and incidental to the matter from 6 October 2022 to 10 April 2025 on a standard basis, to be assessed if not agreed.

(2) The [respondents] pay [the appellant's] costs of and incidental to the matter from 11 April 2025 on an indemnity basis, to be assessed if not agreed.

1. In the further alternative the appellant submitted that the appropriate costs order was that the appellant pay the respondents' costs fixed in the sum of $60,000.

1. On 25 September 2025 the primary judge made the costs order as sought by the respondents.
2. In her Honour's reasons for the costs decision the primary judge referred to s 37 of the Supreme Court Act and the general rule that costs follow the event [12]. Her Honour stated, conformably with authority, that the determination of who is the successful party requires the court to determine who was successful in the 'underlying, real contest' between the parties [13]. The primary judge observed that an award of nominal damages may disentitle a successful party from costs. There was, however, no invariable rule to this effect given the court's wide discretion to award costs [14]. Her Honour then considered what was meant by 'nominal damages' [16].
3. The primary judge held that, although the damages as assessed were 'small', they were not nominal damages [16].
4. In addition, the quantum of damages as assessed had to be considered in the context of two matters. First, prior to the assessment before the primary judge the parties had entered into a commercial compromise as to the respondents' claim for future loss. This resulted in a reduction of the quantum of damages claimed by the respondents at the assessment. However, there was no relevant abandonment insofar as the compromise resulted in the respondents securing an entitlement under a fixed return rental agreement [17]. Second, although the respondents had claimed $443,753 at the assessment of damages before Master Sanderson in 2020, in the time that passed thereafter the respondents had received monthly payments and top-up payments from the appellant. That also resulted in a reduction of the respondents' damages claim [18].
5. The primary judge stated:

I do not accept that [the appellant] had success in reducing the amount of damages claimed by [the respondents] - instead it was time and commercial compromise that had that effect [18].

1. The appellant's proposed grounds of appeal do not challenge this finding.
2. The primary judge stated that the issue to be resolved at the assessment of damages before her Honour concerned the appropriate apartment comparator to use in the assessment of the respondents' loss. The respondents were 'wholly successful' on that issue. There was, in the primary judge's view, no reason to depart from the usual order entitling the respondents to recover their costs of the assessments of damages [19].
3. As to the last matter, the appellant relied on various offers in contending that the court should depart from the usual order as to costs. The first offer, dated 4 April 2019, was in an amount of $25,353.02. The second offer, dated 11 June 2019, was in an amount of $24,050.87. The third offer, dated 10 April 2025, was said to be made pursuant to the principles in Calderbank v Calderbank.[6] By this offer the appellant offered to pay the respondents the amount of $130,000 in full and final settlement of the dispute. The respondents were also provided with a choice as to whether to remain or leave the letting pool.
4. The appellant claimed that the respondents unreasonably rejected the offers. In alleging that the offers were unreasonably rejected the appellant relied on the ultimate quantum of damages that was awarded.
5. The primary judge found that the respondents did not unreasonably reject the 2019 offers so far as, among other things, those offers made no provision for legal costs (those costs inclusive of expert fees amounting to over $250,000 at the time of the 2019 offers) [22] ‑ [23]. In relation to the Calderbank offer, her Honour referred to the relevant principles and factors as discussed in Ford Motor Company of Australia Ltd v Lo Presti[7] and Currie v Currie.[8] The primary judge accepted that the respondents rejected the Calderbank offer because it did not provide for the respondents' legal costs. By this time the respondents' costs had increased by a further $100,000 [29]. The primary judge then concluded that:

[T]he [respondents] did not unreasonably reject the Calderbank Offer at the time that it was made. While the assessment of damages appears to be modest in comparison to the Calderbank Offer, [the respondents'] legal costs and disbursements incurred were considerable at that time. Further, the ultimate assessment of damages is not wholly reflective of the outcome achieved by the litigation - [the respondents] and [the appellant] also agreed on fixed rental payments until 31 January 2028 [30].

1. There were three proposed grounds of appeal:
   1. The primary judge made an error of law and fact in awarding 'costs follow the event' in circumstances where nominal damages awarded and Supreme Court jurisdiction used as an abuse of process. The respondents should not be rewarded for obtaining nominal damages in circumstances where the proceedings were more appropriate as a tenancy dispute in a tribunal.
   2. The primary judge made an error of law and fact in assessing the Calderbank principles misapplied (sic). The rejection of the offer by the respondents was not reasonable in the circumstances.
   3. The primary judge made an error of law and fact in assessing the proportionality of an award of coats (sic). The primary judge did not give proper weight to the disproportion between the modest judgment and the significant costs and resources of two Supreme Court assessments; nor with the appellant's submission that this was, in substance, a lower jurisdiction claim as determined.
2. The appellant acknowledged that it required leave to appeal. The appellant said that there was a risk of injustice if a not insignificant amount of costs was awarded in a matter where the damages as awarded were under $30,000. The appellant relied on the claim having been brought in the jurisdiction of the Supreme Court in circumstances where no other equitable orders were sought. The appellant claimed that an error had been made in exercising the costs discretion which resulted in an outcome that was unreasonable and plainly unjust.
3. There was, however, no proposed ground of appeal alleging in terms that the costs order as made was unreasonable or plainly unjust.

1. The applicable legal principles on an application for leave to appeal from an order as to costs only were summarised in the recent decision of Hooper v Cockles Pty Ltd [No 2].[9] For present purposes it suffices to repeat the following:

Leave to appeal from an order as to costs only should be granted if, in all of the circumstances, it is in the interests of justice that there be a grant of leave. In this context the factors that are commonly considered in evaluating the interests of justice include: (1) whether the costs decision was wrong or, at the least, attended with sufficient doubt to warrant its being reconsidered; (2) whether the application for leave raises a question of general public importance, an issue of principle or the applicant for leave can demonstrate that significant injustice is likely to result (sometimes referred to as a 'reasonably clear injustice') if leave is not granted; and (3) whether the likely costs of the appeal are proportionate to the issues at stake [22].

1. At the outset it should be observed that the appellant's proposed appeal did not raise any question of general public importance. Nor did it raise an issue of principle. Rather, properly understood, the appellant's proposed appeal did no more than raise the application of accepted and well-settled costs principles to the particular factual scenario before the court in the primary proceedings. The appellant's complaint was one of application, and supposed injustice, rather than principle.
2. It might be, however, that the likely costs of the proposed appeal were not disproportionate to the issues at stake. The respondents claim to have incurred costs exceeding $350,000. That $350,000 was incurred prior to the two‑day hearing for the assessment of damages before the primary judge. Accordingly, it is to be expected that the costs and disbursements incurred by the respondents will well exceed the $350,000 noted by the primary judge. We would infer that the respondents will seek to recoup a significant proportion of those costs on any assessment pursuant to the primary judge's costs order.
3. The fact that the costs of a proposed appeal will not be disproportionate to the likely amount of the costs orders which are the subject of the proposed appeal does not require that leave to appeal be granted. That is even so where the proposed appeal has some reasonable prospect of succeeding. Satellite litigation as to costs should be discouraged and it is seldom in the interests of justice, nor consistent with the goal and objects enshrined in O 1 r 4A and r 4B of the Rules of the Supreme Court 1971 (WA), that a litigant be permitted to challenge a discretionary costs order. Thus, ordinarily as a matter of fact, a grant of leave to appeal on a costs issue is rare: Grove v Grove;[10] Hooper v Cockles Pty Ltd [No 2] [24].
4. Most significantly, in the present case we are not satisfied that the primary judge's costs decision was attended with sufficient doubt to warrant its being reconsidered. Proposed ground 1 was wholly misconceived. The primary judge was correct to find that the respondents recovered more than nominal damages. 'Nominal damages' does not mean small damages; it is a technical phrase which indicates the infraction of a legal right where the claimant proves no more than the defendant's breach: Baume v The Commonwealth.[11] In the present case the damages were undoubtedly small; but they were not nominal. In Barrett-Lennard v River Wind Pty Ltd[12] this court, applying Baume, held that an award of $5,000 damages was plainly not an award of nominal damages. There is no basis for the secondary contention in proposed ground 1 that the action in the Supreme Court constituted an abuse of process. Nothing in the appellant's submissions sought to sustain this serious allegation. It should not have been pressed.
5. The appellant made submissions in support of proposed ground 1 that exceeded the scope of the ground. It is not necessary to deal with those submissions. It suffices to state that, so far as the appellant argued that the primary judge misapplied the general rule that costs followed the event, there is no substance in the appellant's contention that the primary judge erred by treating the respondents as having been wholly successful. That contention is not maintainable in circumstances where the appellant did not challenge the finding reproduced at [12] above.
6. Proposed ground 2 was no more than an assertion. The primary judge referred to the orthodox principles in considering the Calderbank offer. No appellable error is revealed in her Honour's recitation of the relevant factors in assessing whether the respondents unreasonably rejected the Calderbank offer. In contending that the rejection of the offer was not reasonable in the circumstances the appellant submitted as follows:

The appellant made three offers: 4 April 2019 ($25,353.02), 11 June 2019 ($24,050.87) and 10 April 2025 ($130,000 global Calderbank). Her Honour concluded the rejections were not unreasonable, primarily because offers did not include costs and because of then incurred costs/outcomes. Respectfully, that approach undervalued the objective superiority of the outcomes offered (particularly the $130,000.00 global offer) over the result achieved and did not adequately weigh the Lo Presti/Hazeldene's factors - including timing (post-evidence, imminent trial), extent of compromise, and clarity/foreshadowing. A reasonable offeree would have accepted the 2025 offer (or, at worst, accepted from the offer date), warranting at least a departure from 'all respondents' costs' after 10 Apr 2025. (appellant's submissions par 10)

1. The 2019 offers are irrelevant to the rejection of the Calderbank offer. So far as proposed ground 2 invokes Calderbank principles, only the Calderbank offer need be considered. We otherwise disagree with the appellant's submission that a reasonable offeree would have accepted the Calderbank offer. The Calderbank offer made inadequate provision for the respondents' previously incurred costs and disbursement. In any case the question is not whether a reasonable offeree would have accepted the Calderbank offer. The relevant inquiry is whether the respondents' rejection of the offer was unreasonable in all of the circumstances: Ford Motor Company of Australia Ltd v Lo Presti [16] ‑ [20], [23].
2. The appellant did not demonstrate any appellable error in terms of proposed ground 2. It was well open to the primary judge, in the exercise of the discretion as to costs, to conclude that the respondents' rejection of the Calderbank offer was not unreasonable in all of the circumstances.
3. Proposed ground 3 asserted a weighting error. The primary judge was exercising a wide judicial discretion as to costs - one informed by the interests of justice. In such circumstances a disagreement only on matters of weight does not, in itself, justify appellate interference: Gronow v Gronow.[13] The attribution of weight to one or more factors in a combination of factors is the essence of a discretionary judgment. The extent to which matters of weight may justify appellate intervention in respect of a discretionary judgment was discussed by Latham CJ in Lovell v Lovell as follows:

If completely irrelevant considerations have been taken into account and they have really affected the decision the case is clear, and the order, though made in the exercise of a discretion, should be set aside. Similarly, if relevant considerations are plainly ignored the same result follows. But when the appellate tribunal is considering questions of weight it should not regard itself as being in the same position as the learned trial judge. In the absence of exclusion of relevant considerations or the admission of irrelevant considerations an appellate tribunal should not set aside an order made in the exercise of a judicial discretion ... unless the failure to give adequate weight to relevant considerations really amounts to a failure to exercise the discretion actually entrusted to the court.[14]

1. Ordinarily, where concerned with a discretionary decision, a weighting error is not, of itself, an independent ground which justifies appellate intervention: Meyer v Solomon.[15]
2. The weighting error raised by proposed ground 3 did not bespeak any failure to exercise the discretion actually entrusted to the court. We acknowledge that sometimes the language of 'weighting error' is intended to support a contention that the outcome or result of a judicial officer's exercise of a discretion is unreasonable or plainly unjust. There are echoes of that in the appellant's written submissions. However, having regard to the whole of the circumstances, we are not driven to conclude that there must have been some misapplication of principle by the primary judge. It cannot be said that a substantial wrong has occurred. The costs order as made was within the limits of a sound discretionary judgment.
3. Proposed ground 3 could not sustain a grant of leave to appeal.
4. Having examined the proposed grounds of appeal, in the context of the appellant's case and the primary judge's reasons, we were not satisfied that the costs decision was attended with sufficient doubt to warrant its being reconsidered. It followed that leave to appeal ought to be refused. That was all the more so where the proposed appeal did not raise any question of general public importance or issue of principle. So far as the appellant asserted that there was a risk of injustice, there was no reasonably clear injustice in that the proposed grounds of appeal failed to disclose sufficient doubt to warrant the reconsideration of the costs decision. In all of the circumstances we were not satisfied that it was in the interests of justice to grant leave to appeal.

1. For these reasons we refused the appellant's application for leave to appeal. It followed that the appeal was to be dismissed. We made orders accordingly. Costs followed the event.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Netline Pty Ltd v QAV Pty Ltd [2025] WASC 232 (S) (primary reasons).

[2] Netline Pty Ltd v QAV Pty Ltd [2025] WASC 232 [1] - [9].

[3] Netline Pty Ltd v QAV Pty Ltd [No 2] [2015] WASC 113.

[4] Netline Pty Ltd v QAV Pty Ltd [2020] WASC 23.

[5] Netline Pty Ltd v QAV Pty Ltd [2022] WASCA 131.

[6] Calderbank v Calderbank [1975] All ER 333.

[7] Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1.

[8] Currie v Currie [No 3] [2018] WASC 306.

[9] Hooper v Cockles Pty Ltd [No 2] [2025] WASCA 157 [22] ‑ [28].

[10] Grove v Grove [2022] WASCA 86 [34] - [35].

[11] Baume v The Commonwealth [1906] HCA 92; (1906) 4 CLR 97, 116 ‑ 117.

[12] Barrett-Lennard v River Wind Pty Ltd [2019] WASCA 199; (2019) 55 WAR 403 [119] - [120].

[13] Gronow v Gronow [1979] HCA 63; (1979) 144 CLR 513, 519.

[14] Lovell v Lovell [1950] HCA 52; (1950) 81 CLR 513, 519. See also Mallet v Mallet [1984] HCA 21; (1984) 156 CLR 605, 614.

[15] Meyer v Solomon [2021] WASCA 168; (2021) 58 WAR 464 [144].