North East Solution Pty Ltd v Masters Home Improvement Australia Pty Ltd

2 For the reasons set out in the judgment, the Court gave judgment for the Plaintiff, North East Solution Pty Ltd, in the sum of $10.875 million plus interest. The Court reserved the question of costs and invited the parties to be heard on the issue. The Court also invited the parties to discuss a form of orders that would give effect to the judgment. Upon receiving judgment, the Defendants foreshadowed that they wished to be heard on the question of the Plaintiff's entitlement to interest.

3 Orders have been proposed by the Plaintiff, in relation to which the Defendants take issue in two respects. First is the amount of interest to be awarded, and the second is the certification of fees for Senior Counsel for the sum of $9,900 per day and $990 per hour. The Plaintiff provided written submissions with respect to these issues, as did the Defendants.

4 For the sake of convenience, these reasons adopt the terminology used in the judgment.

5 The Plaintiff proposes orders in the following form:[2]

(1) Judgment for the plaintiff against the defendants in the sum of $10,875,000 together with $XXX damages by way of interest (calculated from the date of issue of the Writ on 10 May 2012 to the date of judgment).

(2) That the defendants pay the plaintiffs costs of the proceeding including reserved costs to be taxed on a standard basis with fees for Senior Counsel certified at $9900 per day and $990 per hour inclusive of GST.

(3) That the bank guarantees totalling $465,000 provided by the plaintiff by way of security for costs be released to the solicitors for the plaintiffs.

6 Section 60 of the Supreme Court Act 1986 ("the Act") makes provision for an award of interest by the Court as follows:[3]

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

...

(3) If the damages awarded by the Court or jury include or if the Court in its absolute discretion determines that the damages awarded include any amount for -

...

(b) compensation for loss or damage to be incurred or suffered after the date of the award;

the Court must not allow interest in respect of any amount so included or in respect of so much of the award as in its opinion represents any such damages.

7 The critical provision which lies at the heart of the difference between the parties in the present circumstance is s 60(3) which, as has been seen, requires that if the Court determines that the damages awarded include any amount for compensation for loss or damage to be incurred or suffered after the date of the award, interest must not be awarded on that amount.

8 The authorities make it clear that an award of interest by the Court is intended to be compensatory. Thus, in MBP(SA) Pty Ltd v Gogic, the High Court said:[4]

The function of an award of interest is to compensate a plaintiff for the loss or detriment which he or she has suffered by being kept out of his or her money during the relevant period.

9 Similarly, in Haines v Bendall, the High Court said:[5]

An award of interest up to the date of judgment is an award of interest in the nature of damages. This statement acknowledges that the award of interest is an integral element in the attainment of the object of damages, namely, to compensate a plaintiff for injuries sustained. Hence the award of interest is compensatory in character.

10 Woolworths submit that in light of these decisions of the High Court and the decisions which follow them, the relevant question to be asked in this case is: "What detriment did the Plaintiff suffer as a result of being 'kept out of ... [its] money'?" It is submitted that this question is not to be answered in a theoretical or hypothetical manner, but by looking at the "real and practical ... losses" that a plaintiff will suffer as a result of the breach in question.[6] Woolworths says that the authorities indicate that this is a more complex exercise than simply awarding interest on the whole of the judgment sum from the date of breach, or commencement of proceedings, to the date of judgment.

11 Developing this submission, Woolworths makes reference to the High Court decision in Fire and All Risks Insurance Co Ltd v Callinan where, in considering amounts to be earned in the future, the Court said that consideration must be given, at a practical level, of what moneys the plaintiff was kept out of.[7] Particular reference is made to the following passage in the joint judgment of the Court:[8]

In the case of loss of earning capacity, interest should ... be allowed only on that part of the damages awarded under that head which represents compensation for those detriments the practical impact of which, in terms of economic loss actually incurred, has already, at the date of judgment, been experienced by the plaintiff.

12 On this basis, Woolworths submit that the practice adopted in fatal accident and personal injury claims is instructive in this respect. In such cases, it is said, it is the practice of the courts to split the award into two parts - the first part reflecting loss of dependency or earnings before trial, and the second part reflecting loss of dependency or earnings after that date - and to award interest only on the loss before the date of trial, making no award for interest in respect of the loss to be suffered after that date.[9] As loss of dependency or earnings that would be suffered after the date of judgment is not amenable to an award of interest because the plaintiff would plainly not have earned those amounts at the date of judgment, there should be no entitlement to compensation for an inability to use or invest those amounts prior to trial. Thus it is said that because a plaintiff is not "kept out of the damages" in respect of prospective losses - that is, losses incurred after the date of judgment - to compensate a plaintiff with interest on prospective losses at that date would be to award to that plaintiff a windfall by granting the plaintiff an ability to use or invest funds that it would not yet have earned.

13 NES does not dispute that the award of interest is compensatory in character[10] or that it is intended to compensate a plaintiff for the loss or detriment it has suffered by being kept out of his, her or its money during the relevant period[11] - in this case, throughout the proceeding - or that interest should only be allowed on losses which have actually been incurred at the date of judgment.[12] NES does, however, make two, and in my view significant, points in this respect. The first is that s 60(3)(b) of the Act confers an absolute discretion on the Court to make a determination with respect to future loss or damage in terms of those provisions, but does not require the exercise of the discretion in this respect. Secondly, that authority in this Court, in similar circumstances, supports the contention by NES that there is no loss or damage to be incurred or suffered after the date of the award for the purposes of s 60(3) of the Act.

14 For the reasons which follow, I am of the opinion that it is not necessary to pursue the first point, but that the second point is well made on the basis of the judgment of Habersberger J in Foxeden Pty Ltd v IOOF Building Society Ltd (No 3).[13]

15 In Foxeden, Habersberger J specifically considered the question whether, in a lost opportunity case, where the measure of damages was calculated by reference to expected future earnings, the Court should refuse to award interest in respect of that component of damages calculated by reference to earnings expected to be received after the date of judgment. In rejecting the same argument in relevant respects which is now put by Woolworths, that interest should not be awarded in these circumstances, his Honour said:[14]

[14] ... [It was submitted] that in the context of the present case, whilst it might be argued that what the plaintiff(s) had been compensated for was the loss of an opportunity, which opportunity was lost on or about 30 June 1999, the practical measure of the damages had been calculated by reference to earnings expected to be received from 1 July 1999 through to the end of 2012. In those circumstances, he argued that the Court should specify the component of the damages awarded as compensation for loss to be incurred after the date of judgment, and then not award any interest in respect of such amount.

[15] I do not accept that IOOF has shown "good cause to the contrary" by virtue of the above submission. As the plaintiff(s) pointed out in their submissions, the argument advanced by IOOF appeared to overlook the fact that the damages awarded to the plaintiff(s) had been discounted to take into account not only the degree of probability that the lost chance may not have come to pass at all or in part but also "that any lost income would have been received over time and not all at once on 1 July 1999". In deciding on the appropriate rate to use in discounting the lost income back to a net present value as at 1 July 1999 I accepted the evidence of the defendant's expert, Ms Murone, in preference to that of the plaintiff(s) expert, Professor McMaster, and used a figure of between 10% and 15%. Therefore, it seems to me that it is not correct to regard the damages awarded to the plaintiff(s) as including any amount for "compensation for loss or damage to be incurred or suffered after the date of the award". On the contrary, as the damages have been assessed, in accordance with the general rule, as at the date of the first defendant's breach, the plaintiff(s) must be regarded as having been kept out of the whole of the discounted amounts since 1 July 1999. Accordingly, there is no reason not to award interest on the full amount from the date each proceeding was commenced.

16 Habersberger J also expressly considered the application of Ruby v Marsh[15] and its relevant aspects as relied upon by Woolworths.[16] In relation to the application of the principles articulated in Ruby v Marsh, as they apply to lost opportunity cases, his Honour said:[17]

[16] Furthermore, I do not agree with IOOF's analysis of the decision in Ruby v Marsh. It seems to me that whatever may have been the view of Gibbs J, and the minority judges, Stephen J and Jacobs J, about interest on damages for loss of an injured plaintiff's earning capacity, the reasoning of the majority clearly favours the conclusion that the damages in this case, which have been discounted back to the net present value as at the date of breach, should bear interest for the whole period. I include Gibbs J in the majority on this point because his Honour clearly distinguished between damages for personal injury and damages for the lost chance to earn income. Gibbs J said that the former:

[R]epresent compensation for all the consequences of the injury; those consequences may include loss incurred or damage suffered in the future. For example, it may be seen that as a consequence of the injury it will be necessary to incur medical and hospital expenses after the date of the award and an amount awarded in respect of those expenses will be compensation for a loss to be incurred after the date of the award. It is further my opinion that damages for economic loss that will probably be incurred in the future as a result of the injury come within s.79A(3)(b).

Viewed solely from the point of view of pecuniary loss, the position of a widow or child whose husband or father has been killed is analogous to that of the owner of a profitable business which has been forced to close; such an owner suffers a loss when the business ceases, and not at some later time when he might have received income from the business if it had continued to remain in existence.

17 Having considered Ruby v Marsh, Habersberger J then considered the decision of the Victorian Court of Appeal in Hartley Poynton Ltd v Ali[18] as it related to whether interest should be awarded on damages for various lost opportunities that formed part of the judgment awarded. His Honour said:[19]

[17] Finally, I consider that this first submission of IOOF is shown to be incorrect by a passage in the judgment of Ormiston JA, with whom Buchanan and Eames JJA agreed, in Hartley Poynton. In relation to the issue whether the rates prescribed by the Penalty Interest Act should be awarded on top of damages for loss of opportunity, his Honour said:

I would see no reason ordinarily to deprive a party of interest at the rates prescribed unless it was unfair to do so and in particular unless it could be shown that there was in effect double counting by awarding interest on those damages.

By virtue of the discounting back to a net present value as at 1 July 1999 there is, in my opinion, no element of the unfairness or double counting referred to by Ormiston JA.

18 As Habersberger J found in Foxeden,[20] as no "good cause to the contrary" had been established that would justify a departure from the ordinary rule under s 60(1) of the Act, his Honour entered judgment for the plaintiff together with interest pursuant to statute.[21]

19 Consequently, in my view, it is not correct, as Woolworths contend, that Habersberger J failed to consider in Foxeden the considerations discussed in the authorities upon which Woolworths rely in support of the proposition that compensation for loss or damage to be incurred or suffered after the date of the award is the effect of the judgment in these proceedings. The authorities upon which Woolworths rely are principally personal injuries cases in which, as is the common course, future loss or damage is contemplated as a result of the injury suffered by the plaintiff. It is the case, as Woolworths observes, that Habersberger J apparently did not consider - at least not expressly - the High Court decision in Atlas Tiles Ltd v Briers,[22] nor the advice of the Privy Counsel in Thompson v Faraonio.[23] Nevertheless, these decisions do not, in my view, affect the position with respect to the nature of damages in loss of chance cases, as explained by Habersberger J. Again, they are personal injuries cases, involving loss of earnings capacity after trial, and hence raise different issues.

20 For the reasons which follow, I am of the view that the present case is relevantly on all fours with Foxeden and that Woolworths have drawn a false analogy between situations, such as personal injury cases, where further loss and damage is anticipated in the future and a loss of chance case such as this where, as is true, predictions as to future events are inherent in the calculation of the present value of loss and damage suffered. The reference to likely future events in the latter type of case is simply part of the process of determining the present value of the plaintiff's loss and damage discounted according to the process applied in such cases. The process involves calculation of loss at a present time - historical present or otherwise - and not a calculation which is or can be affected by what actually happens in the future.

21 In essence, Woolworths submit that, because the exit value of the land was calculated as at the conclusion of the Lease and the surplus rent was determined over the life of the Lease, the whole of the capital appreciation of the land and most of the surplus rent - around $9.6 million of the $10.7 million - constitute "compensation for loss or damage to be incurred or suffered after the date of the award" within the meaning of s 60(3)(b) of the Act. Accordingly, Woolworths submit that the amount of damages on which interest is payable must be reduced from $10.875 million - the judgment amount - to less than $650,000. In the result, Woolworths contend that NES is entitled to interest of around $256,000 - as distinct from the approximately $4.3 million that would be payable on the entire judgment amount. For the reasons which follow, I accept the submissions of NES that these submissions are misconceived.

22 The detailed bases of these submissions by Woolworths are as follows:[24]

1. The Court assessed the damages at $14.5m, but then discounted that assessment by 25% to $10,875m upon its application of the principles in the Sellars case.[25] In arriving at its initial assessment of $14.5m, the Court rejected the Capitalisation of Income method used by Mr Stone and Ms Wright for the assessment of the plaintiff's (NES) damages, which method capitalises the value of a store as at the date of completion based on yields of comparable income producing properties. The Court held that because NES intended to hold onto the Strathdale site for the duration of the Lease and to realise the full benefits of the rent payable by Masters during that time, the application of the Capitalisation of Income method would "have the effect of undervaluing the cash flows that NES would in fact have obtained from the property".[26]
2. By way of summary, the Court held: [27]

there is no principled reason that NES should be fixed with the value of the Strathdale site at the completion of the development when it in fact had no intention of selling the development at that time.

1. The Court subsequently concluded that a form of Discounted Cash Flow method should be applied to assess NES' loss. The Court held that this method more realistically reflected the losses that NES would suffer over the term of the Lease. The Court stated that: [28]

the Court should, in my view, look to value the actual cash flows NES would have achieved, having regard to when these would have been achieved and the risks of those cash flows not being achieved.

1. Under this method of assessment, the (pre-Sellars discount) damages were calculated by the Court on the basis of:

(a) the net present value (NPV) of rental surplus that NES would have achieved over the course of the 42 year term of $10,722,842; and

(b) the NPV of the net equity of the Strathdale site at the end of the 42 year term of between $3,705,216 and $3,906,035.[29] Given the final total assessment of $14.5m (pre-Sellars discount),[30] the Court implicitly adopted a midway point of $3,777,158 under this head of damage.

1. Accordingly, although the final damages award was expressed as a global sum, the Court's award is predominantly comprised of amounts for loss and damage to be incurred or suffered after the date of the award (ie. the NPV of that portion of the rental surplus to be earned by NES after the date of judgment, together with the whole of the NPV of the net equity of the Strathdale site at the end of the 42 year term). It is appropriate for the Court to,[31] and the Court should,[32] determine this to be the case.
2. This is not the type of case where the damages cannot be divided between past and future loss,[33] or where it is necessary to do so "in quite a broad way".[34] Indeed, it can be done so precisely.
3. Using the calculations relied upon by the Court, the $10,722,842 of rental surplus in paragraph 18(a) above, $9,857,230 would have been earned by NES between the date of judgment[35] and the year 2052, and $865,612 would have been earned by NES between 2011 and the date of judgment.[36] Using the Sellars discount rate of 25% applied by the Court, these amounts reduce to $7,392,922.50 and $649,209, respectively.
4. Similarly, the whole of the net equity in the land in paragraph 18(b) above of $3,777,158 is referrable to the value of the site as at 2052. This value would evidently not have been seen by NES for some time given, as already noted, the Court's finding that NES in fact had no intention of selling the development.[37]

23 As foreshadowed, however, I am of the view that these submissions are misconceived. They confuse what has been lost - and that for which damages are compensating "for" - namely, the loss of a chance or opportunity to develop the property, with the method by which that lost opportunity is valued - in this case, although not always, by reference to a stream of potential benefits that the lost opportunity may have afforded. In so doing, the submission ignores the single loss that was in fact suffered by NES, namely, the loss of an opportunity to complete a development. Having done so, the Woolworths submissions impermissibly elevate and characterise the stream of potential benefits that the lost opportunity may, or may not, have afforded to separate heads of loss or damage "to be" incurred or suffered in their own right. The submissions also confuse the time at which the loss or damage is "incurred or suffered" - namely, at the time the opportunity or chance was lost, being the date of breach, with the time at which the benefits that opportunity may, or may not, have afforded may, or may not, have accrued.

24 The loss that is being measured is a single lost opportunity, incurred with the termination of the agreement, well before the date of the award, and not lost rent or capital that will be suffered or incurred in the future. This is evident from the application of a discount rate to the damages amount in order to reach a "net present value" of the lost rent and capital "as at the date of the breach".[38]

25 Moreover, the Court noted in the judgment that: "There is no dispute between the parties that any damages payable to NES must be discounted to the date of breach".[39] Damages were calculated accordingly.

26 In the present context, the significance of the application of a discount rate, which incorporates a discount for the time value of money, in order to derive a net present value as at the date of the breach, is that the application of that discount necessarily reflects that the loss in question is a loss suffered or incurred as at that date - and not later. In this case, the net present value, as at the date of breach, reflects that the loss in question was incurred by NES on 6 May 2010 when Woolworths terminated their agreement with NES. No loss was or is to be suffered after this date; a situation which, it might helpfully be observed, is in marked contrast to the usual position with personal injuries cases of the type to which reference has been made and principally relied upon by Woolworths. The application of a Sellars[40] discount to the damages award is further evidence that the damages award is not compensation for the loss of rent or capital "to be" sustained in future but, rather, compensation for the loss, on the date of breach, of the chance or opportunity to earn some or all of that income, which chance is determined by reference to "the degree of probability that an event would have occurred or might occur".[41]

27 Further considerations are raised in the submissions by NES as to the consequences of the position contended for by Woolworths. Thus it is submitted by NES that were the position not that for which it contends and if an award of damages for the loss of an opportunity could be dissected into its constituent components or assumptions for the purpose of awarding interest, as contended by Woolworths, then anomalous outcomes would result. By way of example, NES submits that interest would not be payable on a damages award for the loss of an opportunity to develop land if that lost opportunity was valued by calculating the potential stream of income or capital that may be generated by the land - the discounted cash flow method - whereas interest would be payable on a damages award for the same lost opportunity if that opportunity was valued by reference to the market value of the land as at the date of the breach or completion - the capitalisation of income method contended for by Woolworths.[42] This would be so despite the market implicitly valuing the potential income and capital that may be generated by the land in setting the market price.

28 The example put by NES does indicate that if the Woolworths approach were to be accepted, the result would be that the method of calculation of the lost opportunity, and not the substance of the loss being compensated, or the date on which the loss was incurred, would be determinative of whether interest could be awarded. In my view, such an application of s 60(3)(b) of the Act could serve no proper purpose but would unnecessarily and artificially distort the choice of valuation methods adopted in lost opportunity cases.

29 Thus, by way of conclusion, NES submits that because of the compensatory nature of an award of interest, it is entitled to interest on the entire judgment amount for the duration of the proceeding. The damages awarded in this case, if properly characterised, are not compensation for the loss of rent or capital that is to be incurred in the future, but is the amount of compensation that Woolworths or Masters would have had to pay to NES on 6 May 2010 in order to put NES in the same financial position that it would have been in had Woolworths not breached their duty of good faith and thereby deprived NES of the opportunity to develop the Bendigo site. Failing to recognise that the award of damages represents the financial value of the opportunity lost by NES, on 6 May 2010, and failing to pay interest on that amount for the duration of the proceeding, would, in my view, deprive NES - as a successful plaintiff - of the compensation to which it is entitled for having been kept out of the lost opportunity - or its financial equivalent - for the duration of the proceeding.

30 For the preceding reasons, it follows, in my view, that on the proper construction of s 60(3) of the Act, and having regard to the usual principles relating to interest, NES is entitled to interest on the entire judgment amount from the date the proceeding was commenced until judgment. Thus NES is entitled to damages in the nature of interest as set out in Schedule A to these reasons.

31 It is well established that justice and fairness require a wholly successful party to receive his, her or its costs, other than in special cases.[43] As such, a successful litigant has a reasonable expectation of obtaining an order for costs.[44]

32 In the present proceedings, there are no operative Calderbank[45] offers or offers of compromise to consider, and there are no special circumstances that would warrant the payment of costs on a special basis.[46] NES, as the wholly successful party in the proceeding, seeks its costs of and incidental to the proceeding, including any reserved costs, and the costs of this hearing, on a standard basis. The entitlement to NES of costs in the proceeding on this basis is not disputed.

33 The only matter in issue with respect to costs is whether the Court should also certify the fees of Senior Counsel for NES. The Court has power to do so under r 63.34(3) of the Supreme Court (General Civil Procedure) Rules 2015 ("the Rules"). That is, NES seeks an order under r 63.34(3) certifying a daily and hourly rate for Senior Counsel that is higher than the fee set by the Court scale. The scope for operation of r 63.34 is limited, and the Court may only exercise its discretion "on special grounds arising out of the nature and importance or the difficulty or urgency of the case". In relation to this element, Woolworths contend that there are no such special grounds which would justify the making of such an order and that, in any event, the matter is properly one for the Costs Court. It follows, in my view, that two issues arise. The first is whether the Court at this stage should exercise the discretion under r 63.34 and, secondly, whether, if the discretion is to be exercised now rather than treated as a matter to be considered by the Costs Court, the discretion should be exercised in favour of the position contended for by NES.

34 Appendix A of the Rules contains the Supreme Court Scale of Costs.[47] Item 19 of the Scale of Costs provides that subject to items 19(j) and 19(k), fees for Senior Counsel will be allowed up to $8,094 per day for appearances and $810 per hour for other matters. The fees charged by Mr Bick QC are $9,900 per day and $990 per hour. It is said that Mr Bick's fees are virtually identical to those of Mr Crutchfield QC who appeared for Woolworths - the inference being, as I take it, that this shows that the proposed fees are not unreasonable and that the parties, NES and Woolworths, considered that the proceeding involved such a multiplicity of complex issues and questions as to justify retaining Senior Counsel, who command fees at this level.

35 Item 19(k) of the Scale of Costs relevantly provides that:

Where costs are taxed pursuant to an order of the Supreme Court, Counsel's fees in excess of scale are not to be allowed unless the Supreme Court otherwise orders, but in any other case, the Costs Court has discretion to allow fees in excess of scale.

36 Rule 63.07 of the Rules permits the Court to fix costs, or any portion thereof, including Counsel's fees, rather than order that they be taxed in default of agreement. The power to fix fees is discretionary. There are many and varied circumstances in which a trial judge may decide to exercise the discretion to fix or certify costs. These circumstances include where fixing costs would be relatively simple and would save or reduce the difficulties, inconvenience or expense of taxation of those costs[48] or where the trial judge has a unique insight into the nature or the complexity of the case.[49]

37 NES submits that in this case the exercise of certifying costs for Senior Counsel is a simple and discrete exercise which the trial judge is best placed to perform given his understanding and appreciation of the nature and complexity of the case. The discretion of the Court to allow fees above scale is to be exercised judicially having regard to various considerations in the Scale of Costs, including the complexity of the matter, the difficulty or novelty of the questions involved, the skill, specialised knowledge and responsibility involved by the legal practitioner, research and considerations of questions of law. These are factors which, with more particularity, are the subject of provisions of the Scale of Costs, provisions to which I now turn.

(j) in allowing a fee to Counsel, the Costs Court shall have regard to the following criteria -

(i) all criteria in item 17 of the Scale; and

(ii) the other fees and allowances to Counsel in the matter; and

(iii) payments made for interlocutory work where that work has reduced the work which would otherwise have been necessary in relation to the brief; and

(iv) the standing of Counsel;

39 Item 17 of the Scale provides (under the heading Skill, Care and Responsibility):

An additional amount may be allowed, having regard to the circumstances of the case, including -

(a) the complexity of the matter;

(b) the difficulty or novelty of the questions involved in the matter;

(c) the skill, specialised knowledge and responsibility involved and the time and labour expended by the legal practitioner;

(d) the number and importance of the documents prepared and perused, regardless of length;

(e) the amount or value of money or property involved;

(f) research and consideration of questions of law and fact;

(g) the general care and conduct of the legal practitioner, having regard to the instructions and all relevant circumstances;

(h) the time within which the work was required to be done;

(i) allowances otherwise made in accordance with this Scale (including allowances for attendances in accordance with item 1);

(j) any other relevant matter.

40 As I said at the conclusion of the hearing of the issues the subject of these reasons, I think the work of all counsel in this proceeding, and particularly Senior Counsel, who were the predominant oral advocates, is to be commended in all respects - substance, clarity, research and analysis, and assistance to the Court. Moreover, there is no doubt in my mind that this is and has been an important case to the parties. The trial has been conducted over a reasonably significant period of time and complex issues were raised, including, particularly, with respect to good faith, on the liability side. The lost opportunity issues on the quantum side as well as the quantum of the claim - which will exceed $15 million including interest - are of a similar nature. In my view, it follows that the skill, specialised knowledge and standing of counsel in this proceeding would justify the certification of fees for Senior Counsel above scale. The result of the case means that the fees of Mr Bick QC are in question in this context.

41 For the reasons I have identified in relation to the nature of the proceeding, together with the specialised knowledge and standing of Mr Bick QC, I will certify his fees as Senior Counsel, pursuant to r 63.07, as sought. Moreover, as is implicit in these reasons, I am satisfied that the discretion should also be exercised in this respect. In my view, this serves to reduce the difficulties, inconvenience or expense of taxation of those costs in circumstances where the present issue is relatively simple for me, as trial judge, to determine, and where I have a unique insight into the nature and complexity of this case. Otherwise, the Costs Court would be expected to gain this insight from spending significant time in reading and considering the 256 pages and 394 paragraphs of the detailed material which is the judgment.

42 For the preceding reasons, the following orders will be made:

(1) That there be judgment for the Plaintiff against the Defendants in the sum of $10,875,000 together with damages by way of interest in the sum of $4,297,636.13.

(2) That the Defendants pay the Plaintiff's costs of and incidental to the proceeding including reserved costs and the costs of today, such costs to be taxed on a standard basis with fees for Senior Counsel certified at $9,900 per day and $990 per hour inclusive of GST.

(3) That the bank guarantees totalling $465,000 provided by the Plaintiff by way of security for costs be released to the solicitors for the Plaintiff.

[1] [2016] VSC 1.

[2] Defendants' Submissions Regarding Orders (22 February 2016) [3].

[4] [1991] HCA 3; (1991) 171 CLR 657 at 663.

[5] [1991] HCA 15; (1991) 172 CLR 60 at 66.

[6] John Fairfax & Sons v Kelly (1987) 8 NSWLR 131 at 142.

[7] [1978] HCA 31; (1978) 140 CLR 427.

[8] [1978] HCA 31; (1978) 140 CLR 427 at 432 (Woolworths' emphasis).

[9] See, eg, State Government Insurance Office (Qld) v Biemann [1983] HCA 34; (1983) 154 CLR 539 ("Biemann"); Fire and All Risks Insurance Co Ltd v Callinan [1978] HCA 31; (1978) 140 CLR 427.

[10] Haines v Bendall [1991] HCA 15; (1991) 172 CLR 60 at 66.

[11] MBP(SA) Pty Ltd v Gogic [1991] HCA 3; (1991) 171 CLR 657 at 663.

[12] Fire and All Risks Insurance Co Ltd v Callinan [1978] HCA 31; (1978) 140 CLR 427.

[13] [2006] VSC 207.

[14] Foxeden Pty Ltd v IOOF Building Society Ltd (No 3) [2006] VSC 207, [14]-[15].

[15] [1975] HCA 32; (1975) 132 CLR 642.

[16] See especially Defendants' Submissions Regarding Orders (22 February 2016) [19]-[20].

[17] Foxeden Pty Ltd v IOOF Building Society Ltd (No 3) [2006] VSC 207, [16].

[18] ([2005] VSCA 53; 2005) 11 VR 568 at 618.

[19] Foxeden Pty Ltd v IOOF Building Society Ltd (No 3) [2006] VSC 207, [17].

[20] Foxeden Pty Ltd v IOOF Building Society Ltd (No 3) [2006] VSC 207, [15].

[21] Foxeden Pty Ltd v IOOF Building Society Ltd (No 3) [2006] VSC 207, [27]. Habersberger J also rejected a number of other submissions, including that changes to the plaintiff's loss and damage case somehow disentitled them to interest (see at [24]-[25]).

[22] [1978] HCA 37; (1978) 144 CLR 202.

[23] [1917] HCA 36; (1979) 24 ALR 1.

[24] Defendants' Submissions Regarding Orders (22 February 2016) [15]-[22].

[25] Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332.

[26] North East Solution Pty Ltd v Masters Home Improvement Australia Pty Ltd [2016] VSC 1, [352], [357].

[27] North East Solution Pty Ltd v Masters Home Improvement Australia Pty Ltd [2016] VSC 1, [375].

[28] North East Solution Pty Ltd v Masters Home Improvement Australia Pty Ltd [2016] VSC 1, [356].

[29] North East Solution Pty Ltd v Masters Home Improvement Australia Pty Ltd [2016] VSC 1, [345]-[346].

[30] North East Solution Pty Ltd v Masters Home Improvement Australia Pty Ltd [2016] VSC 1, [391]

[31] Ruby v Marsh [1975] HCA 32; (1975) 132 CLR 642.

[32] Ruby v Marsh [1975] HCA 32; (1975) 132 CLR 642.

[33] Ruby v Marsh [1975] HCA 32; (1975) 132 CLR 642.

[34] Ruby v Marsh [1975] HCA 32; (1975) 132 CLR 642, quoting Smith J in De Nitis v Seekts [1962] VicRp 60; [1962] VR 417 at 417.

[35] Note that the Defendants have assumed for the purposes of this calculation that judgment will be entered either on or shortly after 26 February 2016.

[36] Court Book 5985. This figure incorporates the net present value of the rental surplus for the years 2011, 2012, 2013, 2014 and 2015 (ie. in total, $830,067), and one sixth of the net present value of the rental surplus for 2016 (being the monthly payments that the Defendants would have made to NES in respect of January and February 2016 rental ie. $35,545.33). Again, this calculation assumes that judgment will be entered either on or shortly after 26 February 2016.

[37] North East Solution Pty Ltd v Masters Home Improvement Australia Pty Ltd [2016] VSC 1, [375].

[38] That the Net Present Value of the Plaintiff's loss is calculated "as at the date of breach" is evident from inter alia paragraphs [345], [346] and [375] of the judgment.

[39] North East Solution Pty Ltd v Masters Home Improvement Australia Pty Ltd [2016] VSC 1, [375].

[40] Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332.

[41] North East Solution Pty Ltd v Masters Home Improvement Australia Pty Ltd [2016] VSC 1, [389].

[42] Assuming completion was before the date of the award.

[43] Oshlack v Richmond River Council [1993] HCA 11; (1998) 193 CLR 72 at 97; Baillieu Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359 at 362.

[44] Donald Campbell & Co Ltd v Pollack [1927] AC 732 at 811; Scherer v Counting Instruments Ltd [1986] 1 WLR 615 at 621.

[45] Calderbank v Calderbank [1975] 3 All ER 333.

[46] Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225 at 234; Spencer v Dowling [1996] VSC 51; [1997] 2 VR 127 at 147.

[47] The Scale of Costs was inserted by the Supreme Court (Chapter 1 New Scale of Costs and Other Costs Amendments) Rules 2012 which came into force in April 2013.

[48] Australasian Performing Rights Association Ltd v Marlin [1999] FCA 1006, [4].

[49] Cf Henwood v Nansor Australia Pty Ltd [2013] VSC 655.