Plaintiff v Defendant

2 On 21 December 2012, NCON applied to reopen its case upon the grounds set out in the affidavits of:

(iv) Derek John Barnes, sworn 19 December 2012; and

(v) Peter Gregory Richards, sworn 21 December 2012.

3 NCON further applied that it have leave to file and serve a proposed further amended particulars of loss and damage exhibited to the affidavit of Mr Gregory Gill.

4 For the following reasons, I refuse the application.

5 Both parties agree that a threshold issue arises in this matter: that is, should NCON be permitted to make the application that it seeks to make, in view of the fact that it previously applied for leave to reopen its case, which application was ultimately unsuccessful.

6 The proceeding was commenced by a writ of summons issued 10 August 2009. The trial commenced on 15 February 2011 and concluded on 2 March 2011. I reserved my decision. Several weeks later, on 23 March 2011, I caused to be delivered a memorandum to the parties in which I said that I proposed to reconvene the hearing of the proceeding to hear submissions on whether or not NCON wished to apply to reopen its case on damages, in view of the possible findings open to be made if I were to find a breach of contract and the pleadings, evidence, and submissions of the parties on damages remained as they were.

7 As a consequence, on 14 April 2011, NCON applied to reopen its case, file and serve further amended particulars of loss and damage, and rely upon a number of affidavits filed and sworn that day. The application of NCON came on for hearing before me on 9 May 2011. I reserved my decision.

8 On 23 June 2011, I granted the application of NCON to reopen its case, and leave was also given to NCON to file and serve further particulars of loss and damage and to lead evidence "of the kind referred to" in three specified affidavits filed on behalf of NCON. A date was fixed for the further hearing of the trial.

9 My decision of 23 June 2011 was appealed. On 2 September 2011, Mandie JA (with whom Bongiorno JA agreed) granted leave to Spotlight to appeal. The appeal was heard on 12 September 2012 by Harper and Tate JJA and Beach AJA. The appeal was allowed, and the orders of 23 June 2011 were set aside and the matter was remitted to me so that I could complete the task of writing the judgment reserved after the conclusion of final addresses on 2 March 2011.

10 The history of NCON's claim for damages is set out in great detail in my decision in NCON Australia Ltd v Spotlight Pty Ltd (No 4)[1] and NCON Australia Ltd v Spotlight Pty Ltd.[2] I will not repeat what I have said in those two judgments. It is sufficient to note that NCON initially claimed damages on a loss of profit basis. During the trial, it abandoned that claim and substituted a claim based on loss of revenue.

11 In its submissions, Spotlight pointed out that such a claim was not sustainable, as damages for breach of contract should have been made on a loss of profits basis. On the final day of the trial, after those submissions had been made by Spotlight and after questions from me about the damages claim, NCON produced a loss of damages calculation and made submissions on that calculation. NCON did not, however, seek to reopen its case to make a claim on the basis of the new calculation, nor -for that matter - to formally amend its particulars of loss and damage. Nor did NCON seek to call further evidence to make out the loss of profits claim. There were several items of expense included in the claim about which there was no evidence.

12 It was apparent to me that senior counsel for NCON was exhausted when explaining the new calculation to me. He had worked, so I was informed, throughout the night to produce the calculation.

13 Under the application currently before me, NCON wishes to reopen its case to effectively do the same thing as it sought in the previous application, that is, make a loss of profits claim, amend its particulars of loss and damage to make such a claim, and call further evidence to prove the loss and damages claim. On the previous application by NCON to reopen its case, the Court of Appeal held that I erred in permitting NCON to reopen its case.

14 NCON says that there are two distinguishing features between the application that was previously made and the current application. NCON says that the first is that it had previously indicated that it was seeking to call further evidence that another source of finance was available if Societé Generale had not provided finance for the discounting of the rental stream. Under the current application before me, NCON no longer seek to introduce such evidence but is content to rely on the likelihood that Societé General would have provided finance (as Mr Reibel said in his evidence).

15 In P Dawson Nominees Pty Ltd & Anor v ASIC & Ors (No 2),[3] Goldberg J of the Federal Court of Australia was faced with a fresh application that had previously been unsuccessfully made to him. His Honour said that in order for the applicants to satisfy the threshold issue, they needed to persuade him that since the previous application, one or more of the following factors had occurred or were satisfied:

(a) that there is new material or new evidence which was not available, or reasonably available, to the applicants at the time of the first application;

(b) that there has been a material change in the circumstances since the previous orders were made;

(c) that there are exceptional circumstances which warrant re-consideration of the matter; and

(d) that as a matter of discretion, the justice of the matter requires that the applicants be allowed to revisit the matter. [4]

16 During the course of this proceeding, NCON has made several calculations of the damages it seeks to recover on a loss of profits basis:

17 I set out these various sums to show that NCON has had difficulty in fixing on a loss of profits claim. This is in part understandable, as the calculations, by their varying nature, are only an estimate, as these costs were never incurred. Rather, they are an estimate of the costs that would probably have been incurred if the contract went ahead (rather than being wrongly repudiated by NCON, as I have found).

18 NCON does not contend that the current claim for damages (though different to other versions of the claim) is based on any new material that was not available or reasonable available to NCON at the time of the first application in April 2011. The evidence of Mr Gill, in his affidavit of 19 December 2011, and the other deponents I have referred to earlier, was all available when the first application was made.

19 Rather, NCON says that there has been a material change in circumstances since the first application in April 2011. NCON says that it now has the benefit of a judgment in its favour on liability, and the consequences of NCON not being able to reopen its case are now firmly established.

20 NCON says there are also exceptional circumstances which warrant reconsideration of the matter, and that the clear error of its legal team cannot be fixed or remedied other than by reopening the case and permitting NCON to establish its loss and damage. NCON says that unless this is permitted, it will be left without a remedy. NCON says that it will suffer a catastrophic injustice unless it is permitted to make the fresh application.

21 At this stage, it is convenient to refer to the various factors that the Court of Appeal took into account in allowing the appeal from my decision to permit NCON to reopen its case on damages.

[17] There are good reasons why the circumstances must be exceptional before a court may allow a case, having been closed and judgment reserved, to be reopened. The need for finality in litigation is one. It is no answer to this point to say that the further evidence sought to be adduced by the respondent in this case is confined to the quantum of damages. Were applications to reopen to be allowed almost as of course, such applications would be regularly made. That would add enormously to inefficiencies in the administration of justice, even if the reopened hearing was strictly confined. The discipline which ought to attend the conduct of litigation by highly competent litigators would also inevitably decline.

[18] The very strict rule that, subject to any applicable process of appeal or review, the presentation of their cases by parties to litigation must conclude with the end of the trial, has another important justification. It is that, very often, the boundaries of the reopened issues would be hard to define and as difficult to protect. The reopened hearing would then be bedevilled by arguments about whether one party or the other was seeking to take advantage of the reopening to polish parts of its case which were more or less within the scope of the reopened proceeding but not clearly on one side or the other of the prescribed limits.

[19] This case serves as an example. His Honour restricted the evidence which the respondent would be permitted to lead on the rehearing to 'evidence of the kind referred to' in the specified affidavits. Yet already there are complaints, which may or may not be justified, that the respondent has sought to introduce, within the interstices of the materials which it has been given leave to file and serve, evidence which does not meet his Honour's description. The appellant contends that a whole new field of discovery, not properly confined, has been invaded by the respondent. In particular, it complains that the respondent seeks to take opportunistic advantage of the grant of leave to introduce evidence which supports what the appellant characterises as an hitherto entirely unexplored aspect of the respondent's claim.

[20] The appellant's position warrants further, albeit brief, reference. The respondent intended to obtain finance for the manufacture of the fittings (referred to as 'Yes boxes') which, it alleges, the appellant contracted to have installed in the appellant's retail premises - some 106 stores throughout Australia. The financier from whom the respondent initially sought the requisite financial accommodation declined (for reasons with which this Court is not concerned) to provide it. The appellant contends that, if it were otherwise bound to proceed with the installation of the fittings, it was released from that obligation by the respondent's failure to obtain the funds without which the respondent could not fulfil its side of any bargain.

[21] The respondent now seeks to call evidence that it had another source of finance available to it. Such a claim was never made during the trial, and does not fall within the scope of the leave granted to the respondent by his Honour - or, at least, such is the appellant's contention. As the inevitable extension of this argument, the appellant asserts that it would be quite wrong to allow the respondent to enlarge its case in this way.

[22] It was differences such as this about the width and breadth of any reopening which, we suspect, was one of the reasons why agreement could not be obtained about the formulation of the summary of facts and issues.

[23] There is another, fundamental, reason why this appeal must succeed. Were the trial to be reopened, two documents - the judge's memorandum of 23 March 2011, and his judgment of 23 June that year - would assume pivotal importance, no matter how hard the judge and the parties might seek to keep them entirely off-stage. In the circumstances which would then obtain, they could not but influence the way the parties - and especially the respondent - tailored their reopened cases. They could not, in those circumstances, be described otherwise than as the vehicles by which the respondent's case on damages had been reopened; and not merely reopened, but reopened with the benefit of the judge's observations about the very same deficiencies which were the reason for the reopening in the first place.

[24] We should refer to two authorities upon which reliance was placed during argument on the appeal. The earliest in time is Inspector-General in Bankruptcy v Bradshaw. The applicants had 'from the commencement of the proceeding ... determined to carry their case without seeking to quantify their loss.' They then sought leave to reopen their case for the purpose of pursuing the very quantification which they had originally spurned.

[25] Kenny J refused the application. There were, in her Honour's opinion four recognised classes of case in which a court may grant leave to reopen; and the appellants could not bring themselves within any of them. The four classes (with which we respectfully agree) are: (i) where fresh evidence, unavailable or not reasonably discoverable before, becomes known and available; (ii) where there has been inadvertent error; (iii) where there has been a mistaken apprehension of the facts; and (iv) where there has been a mistaken apprehension of the law.

[26] These classes are not closed; but the present case shares with Bradshaw the distinction that it falls into none of them, and no applicable new category is suggested. The overriding principle is that the court consider whether, taken as a whole, the justice of the case favours the grant of leave to reopen. We are satisfied that, in the present case, it does not.

[27] The second case to which reference should be made is Brown v Dream Homes SA Pty Ltd. The appellant, Ms Brown, bought a home after the respondent, which she had engaged for the purpose, carried out an inspection and pronounced the house structurally sound. So (as a subsequent further inspection established) it was; but the respondent's report failed to mention the existence of a crack, noticed by the inspector, which indicated the possibility that it was not. In the meantime, Ms Brown determined to sell, and claimed damages for the costs thrown away in her original purchase and subsequent sale.

[28] The Full Court of the Supreme Court of South Australia upheld the magistrate's finding that the appellant would have opted out of the purchase during the prescribed 'cooling off' period had the crack then been brought to her attention. A more difficult question was whether the appellant should be allowed to reopen her case to claim the correct measure of her damages - which, as the Full Court unanimously held, differed from that which she had claimed in the Magistrates Court and which the magistrate had allowed.

[29] The Full Court decided by a majority (Doyle CJ and Kourakis J) that her application to reopen should be remitted to the judge of the trial division who heard the appeal from the magistrate. The basis upon which Doyle CJ came to that decision, with which we respectfully agree, is apparent from the following passages from his Honour's judgment:

"The remaining issue is whether the case should be remitted to the single judge to permit Ms Brown to renew her application to call further evidence. As I understand it, she wants to lead evidence to prove that between the time of the purchase of the house, and the time of its resale, the value or market price of the house, and of houses of the same kind (I pass by the question of how the kind of house is to be identified) rose by an amount that can be established. Building on this she wishes to argue that the Court should find that because of the commitment involved in acquiring the house in question, she was not in a position to acquire a replacement home until she had sold the house in question. By then, she argues, she was at a disadvantage because the price and value of an equivalent home had risen with the general rise in market prices for housing. On this basis she argues that the amount credited against her claim, on account of the proceeds of sale of the house, should be reduced by the amount by which the market price of equivalent houses had risen over the relevant period.

In effect, Ms Brown wishes to prove the facts necessary to establish a claim that includes, as one element, the gain that she would have made by entering into another transaction (the purchase of a similar house). She argues that the defendant's breach of contract deprived her of the opportunity to do so, because her money was tied up in the house in question.

...

I agree with Layton J that to support this aspect of Ms Brown's claim, it may be necessary for Ms Brown to give further evidence. It might be necessary for her to give evidence that she acted reasonably in not selling the house until she did sell it, and that she could not have sold the house sooner than she did. The fact that she has not acquired a replacement house might also be relevant, and might be a matter on which she will need to give evidence to support the claim. One cannot say at this stage whether or not the valuation evidence will prove contentious, and whether or not the defendant will wish to call answering evidence.

The claim that Ms Brown now wishes to advance is one that should have been identified and advanced from the outset. It was not identified, or at least not adequately identified, before the magistrate, and was promoted for the first time before the single judge. The explanation for the failure to promote this aspect of the claim before the magistrate is likely to be that given by Kourakis J. That is, that the difficulties inherent in the correct approach to the assessment of loss, reflected by the differing views expressed in differing judgments in this case, meant that Ms Brown's representatives failed to identify this claim and failed to advance this aspect of her case when it should have been advanced. It is also true, as Kourakis J says, that the defendant can be compensated in costs for costs thrown away as a result of the damages claim being reopened. But against that, a judge ruling on the application to be made by Ms Brown would have to bear in mind the need for finality, and the need for litigants to have reasonable confidence that once their case has been heard and decided, the case will not be reopened to enable one party to litigate issues that could have been raised earlier but were not raised.

This review of the relevant considerations persuades me that Ms Brown's application to reopen her case should be remitted to the single judge. To some extent, I have had to speculate about what is involved in the reopening of the claim for damages. The application for permission to do so can be decided satisfactorily only with a full understanding of the case now to be put, and with an appreciation of what that involves by way of evidence on either side. On what I know, the matter appears to be finely balanced. I express no view on the question of whether the application should be granted."

[30] It is clear from those passages that Doyle CJ was (as, with respect, it seems to us) alive to the problems to which the reopening of a case can give rise. It is, in our opinion, also clear that Brown v Dream Homes SA Pty Ltd can be distinguished from the present case.[5]

23 These reasons disclose that the Court took into account, in substance, the following factors:

(1) NCON was seeking to introduce evidence that it had another source of finance available to it if Societé Generale declined to provide finance, which issue was not raised during the trial.

(2) NCON was provided with my memorandum of 23 March 2011 and my judgment of 23 June 2011, and these would assume pivotal importance in allowing NCON to tailor its reopened case.

(3) NCON was not able to fit its circumstances within the four classes identified by Kenny J in Inspector-General in Bankruptcy v Bradshaw[6] (with which the Court of Appeal agreed) nor were NCON able to suggest a further class within which their circumstances fell.

(4) The Court was not satisfied that the justice of NCON's case, taken as a whole, favoured the grant of leave to reopen.

(5) That Brown v Dream Homes SA Pty Ltd[7] (which I referred to and relied upon in my decision to allow NCON to reopen its case) could be distinguished from the present case.

24 As indicated above, NCON says that in allowing the appeal from my decision the Court of Appeal took into account that NCON sought to call evidence that it had another source of finance available to it if Societé Generale declined to provide finance. NCON says it now no longer seeks to call such evidence, and this is a changed circumstance within the meaning of the P Dawson..

25 I accept that this fact is a material change in the circumstances since the previous application was made to me. My judgment contains findings which may have encouraged NCON to believe that it could establish that Societé Generale was likely to have discounted the rental scheme and therefore supported NCON's claim to damages.

26 In my opinion, as a matter of discretion, the justice of the matter requires that NCON be allowed to revisit the matter.

27 In my opinion, NCON has satisfied the threshold issue and I turn to consider the application to reopen NCON's case.

28 In the first application I set out the general principles relating to reopening a case as follows:

[111] The Court has a discretion to allow a party to re-open its case before or after judgment has been given. The overriding principle that guides a court in exercising its discretion in deciding whether to grant an application to re-open is whether the interests of justice are better served by allowing or rejecting the application, as the case may be. An application to re-open may be based on accident, mistake or want of foresight.

[112] Justice Kenny of the Federal Court of Australia says there are, "broadly speaking,.... four recognised classes of case in which a court may grant leave to reopen although these classes overlap and are not exhaustive": fresh evidence; inadvertent error; mistaken apprehension of the facts; and mistaken apprehension of the law. An important factor for the Court to consider is the reason or explanation for the evidence now sought to be led not being led at the trial. Where evidence has not been called for some tactical reason that will tell against an application to reopen to call that evidence. Also where an unsuccessful litigant is seeking a back door method to reargue a case, that will tell against an application. Prejudice to the other party is an important consideration. Whether the application is made before or after judgment is of relevance. There is a public interest in the finality of litigation.[8]

29 I have already addressed the first ground identified above for the Court of Appeal's decision.

30 That NCON had the benefit of my memorandum of 23 March 2011 and my judgment of 23 June 2011 was also considered by the Court of Appeal as a fundamental reason why the appeal should be allowed. It might be considered unfair to NCON that a factor favouring the rejection of NCON's application to reopen its case was the existence of a document generated by the Court (which was neither requested nor sought by NCON) and, further, the existence of my reasons delivered for my decision that NCON should be given leave to reopen its case. Any approval of an application to reopen one's case would normally require a reasons to be given. In any event, this factor is still present on this application.

31 The third factor relied upon by the Court of Appeal referred to above is that NCON was not able to bring itself within the four classes referred to in Bradshaw in which a court may grant leave to reopen a case, nor was NCON able to suggest any other category that its circumstances might fall into. I find that this is still the case.

32 Mr Richards, in his affidavit of 21 December 2012, explains the circumstances in which NCON amended its claim for loss and damage to a loss of profits basis. I quote from Mr Richards' affidavit, as follows:

15. The trial commenced on 15 February 2011. I swore an affidavit on 15 February 2011 adducing evidence of the correspondence passing between the parties on the issue of the confidentiality of Reibel's Supplementary Statement and the admission of the Plaintiff's expert evidence to which the Defendant objected. I anticipated that the Court would deal with both matters on the first day of the trial. The Court ruled allowing the admission of the Plaintiff's expert evidence. In dealing with the admission of the Plaintiff's expert evidence the Plaintiff's legal team overlooked and failed to address the admissibility and confidentiality of Reibel's Supplementary Statement.

16. The Plaintiff subsequently opened its case and led evidence. The confidentiality of Reibel's Supplementary Statement then arose when the Plaintiff called Mr Reibel to give evidence and sought to tender as confidential Reibel's Supplementary Statement. His Honour said that it was entirely inappropriate that the Plaintiff had not allowed the Defendant to examine Reibel's Supplementary Statement when it might be the basis for an award of damages against the Defendant. The Defendant then objected to the tender of Reibel's Supplementary Statement on the basis that Counsel wanted to obtain instructions from the Defendant's officers as had been raised by his Honour. This was the first time this basis of objection had been raised. The Plaintiff's legal team were thrown into confusion.

Reason for Plaintiff's change of basis of damages claim during trial

17. On hearing the Defendant's objection to the tender of Reibel's Supplementary Statement His Honour directed the parties to resolve the matter of the Particulars of Loss and Damage forthwith (Transcript page 564 Lines 13-24).

18. In the light of and as a direct response to that direction - which I considered required urgent attention by the legal advisors of the parties - and against the background I have described in the preceding paragraphs, and in order to obviate the requirement of Tony Reibel to obtain confidentiality undertakings, Amended Particulars were prepared by myself on 23 February 2010 during the running of the trial on the instructions of Tony Reibel, which claimed damages on the basis of a calculation of the net present value of the future income stream. Tony Reibel advised me that that figure resulted in a lesser quantum of claim, than for Loss of Profits and accordingly at that time I considered it was appropriate to proceed on that basis. Tony Reibel testified as to that (on page 66 line 4 et ff of the Transcript).

19. I therefore offer as a principal (but not the sole) reason for the Plaintiff's decision during trial as aforesaid to mistakenly pursue damages on the basis of revenue, was a pragmatic and responsive but mistaken and ill-conceived stratagem of the Plaintiff's legal team in response to the consequences of the matters described in paragraph 7 et ff and to overcome the fundamental difficulty as hereinbefore described in advancing the original basis of the claim to damages under Reibel's Supplementary Statement which was in dispute and rejected by the Defendant during trial.

Ultimate Claim for Loss of Profits

20. During further evidence and as the proceeding unfolded it became apparent on a re-consideration however that the proper basis on which damages should be claimed was for loss of profits as originally claimed and as claimed in Reibel's Supplementary Statement (without the Notional Expenses) and that a loss of revenue claim was bad in law. As a consequence, expenses ought to properly be deducted from the net present value of the future income stream paid to the Plaintiff to ascertain loss of profits as originally contended. Those expenses, other than the Notional Expenses, were all specified in Reibel's Supplementary Statement.

21. The final address of Dr Dean - and supporting written submissions - was entirely predicated upon a loss of profits claim, with all expenses properly deductible from gross revenue, except the Notional Expenses, about which no evidence was given for the reasons deposed to in Greg's Affidavit and Tim's Affidavit and Derek's Affidavit.

22. By inadvertence of the whole of the legal team of the Plaintiff, the Plaintiff failed to seek leave to further amend the Amended Particulars of Loss and Damages dated 23 February 2011 to reflect the case as finally advanced by the Plaintiff with the exception of the Notional Expenses.

23. One further matter militated to some extent against the Plaintiff properly seeking leave to make a second statement of the Particulars of Loss and Damage, and that was the time pressure. The trial was into its 12th day against an estimate of four days and the Plaintiff's legal team did respectfully detect some entirely understandable and proper impatience of His Honour with the length of the trial. That perceived time pressure added to the Plaintiff's failure.

24. The failure to seek that leave was not by reason of the Plaintiff instructions to its legal team not to do so.

33 What is clear from Mr Richards' affidavit is that during the trial, NCON's legal team formed the view that the proper basis on which damages should be claimed was for loss of profits, as it originally claimed when the writ was issued. His affidavit, coupled with what happened at the trial, establishes that not only did NCON's legal team decide that the appropriate basis to claim loss and damage was on a loss of profits basis, but that fresh particulars setting out such a claim was prepared and tendered on the final day of the trial, 2 March 2011.

34 What is not explained is why, when the legal team put forward a submission as to what the loss of profits was, before or after the trial concluded on 2 March 20122, NCON did not seek to reopen its case to amend the particulars and call the necessary evidence to prove the recalculated loss of profits. Some three weeks elapsed after the trial concluded before I sent out the memorandum of 23 March 2011. There is no suggestion that, but for the memorandum (sent out - as the Court of Appeal has held - wrongly), any application would have been made by NCON to reopen its case. Mr Richards' affidavit is silent as to why this was so, save for a reference to "inadvertence".

35 The authorities establish that a full explanation should be provided by the applicant of the mistake or other circumstance which forms the basis of the application to reopen a case. The four categories referred to in Bradshaw turn on the reason for the failure to call the evidence at the trial.[9] In this case, the Court does not know whether NCON's failure to seek to reopen its case to prove the amended statement of loss and damage put forward on 2 March 2012 was inadvertent and, if so, how (in view of the decision NCON had reached in deciding to tender the further calculation). NCON's inadvertence may have been a mistaken misapprehension that the facts were already in evidence; a mistaken view that the Court would accept assertions made from the Bar table; or something else entirely. In the circumstances, in my opinion, NCON's supporting material falls short of that required to fully explain the mistake.

36 In my view, NCON has not established that its case falls within any of the four categories referred to in Bradshaw and no other category was suggested, as was the case before the Court of Appeal. On the appeal of the previous application, the Court of Appeal decided that the justice of the case did not favour the grant of leave to reopen. In my reasons of 23 June 2011, I said that I did not consider that the interests of justice would be served if NCON was denied the opportunity to make the case on damages that it ultimately realised it should have made. The Court of Appeal did not agree. Although there is, in my opinion, much to support my original view, I am bound to accept, and do accept that in law my view was and is wrong.

37 Finally, the Court of Appeal quoted the decision of Doyle CJ in Brown. In my reasons for granting the previous application to reopen, I quoted from the judgment of Kourakis J in Brown, where his Honour said that in deciding the issue before him (that is, whether leave should be given to reopen the applicant's case) the consideration of paramount importance was the ultimate effect on the interests of both parties of allowing or refusing the applicant's application. The Court of Appeal said it was clear that Doyle CJ was alive to the problems to which the reopening of a case can give rise (which the Court perceived in this matter), but otherwise the Court of Appeal appears to have made no direct reference to the proposition stated by Kourakis J that I had relied on.

38 I am bound by the decision of the Court of Appeal in determining the relevant factors that should be taken into account in a case such as this in deciding whether or not to grant NCON's application to reopen its case.

39 NCON submits that it is in the interests of justice to allow NCON's application to reopen to adduce the evidence set out in the affidavits relied upon. NCON says its failure to formally amend its particulars of loss and damage and to identify all of its costs in performing the rental agreement and to adduce evidence of such costs was an error of NCON's legal team. NCON says that the error by NCON's legal team in failing to identify all of its costs in performing the rental agreement and to adduce evidence of such costs did not arise out of any tactical decision by NCON. NCON says the error by NCON's legal team is catastrophic for NCON. NCON says that under the judgment, NCON has succeeded in its claim, but, as a result of the error by NCON's legal team, NCON will receive nominal damages of only one dollar under judgment, rather than its loss of profits calculated at $1,259,373.60. NCON says that if the application were allowed, any prejudice to Spotlight could be remedied by an order for costs. NCON says that if NCON's application to reopen is denied, then the contractual wrong NCON has been found to have suffered will forever remain without a remedy. NCON refers to and relies upon Brown. NCON says that NCON cannot even sue its legal team for loss suffered as a result of their error, and relies on D'orta-Ekenaike v Victorian Legal Aid.[10]

40 In my view, there is considerable merit in these submissions, but, for the reasons I have given, I am duty bound to refuse NCON's application, which I do.

41 In view of the findings I have made, it is unnecessary for me to rule on Spotlight's submission that it would be futile for NCON to reopen its case as it proposes to do. I feel I should do so, however, in case this matter goes any further.

42 Spotlight says that the key to calculating NCON's loss was for NCON to establish that a financier would have paid a lump sum to NCON by discounting the revenue stream that was to be paid to NCON by Spotlight under the rental agreement. Spotlight says that Societé Generale would not have provided the finance and no alternate source of finance was established under the evidence.

43 NCON asserts that Societé Generale had initially agreed to provide the necessary finance at a nine per cent discount rate. That is, Societé Generale would pay NCON a lump sum calculated by discounting the rental stream at this rate. The evidence of Mr Reibel at the trial (and in his further affidavit that is sought to be led on the reopening) supports the conclusion that Societé Generale would have provided finance as it initially indicated it would and discounted the rental stream at no more than the rate of nine per cent.

44 The evidence led at the trial supports the view that the perceived difficulty over the service agreement purportedly applying to the rental agreement adverted to by Societé Generale would likely have been overcome. The evidence of Mr Reibel supports the conclusion that Spotlight agreed that the service agreement did not apply to the rental agreement.

45 It is unnecessary for me to rule conclusively on this issue on this application. Rather, it is sufficient for me to reject the submission of Spotlight that it would be futile to grant leave to NCON to reopen its case and establish the loss it was likely to have suffered, as it seeks to do.

[1] [2011] VSC 271.

[2] [2012] VSC 604.

[3] [2009] FCA 413; (2009) 255 ALR 466 (P Dawson).

[5] Spotlight Pty Ltd v NCON Australia Ltd [2012] VSCA 232, [17]-[30] (citations omitted).

[6] [2006] FCA 22 (Bradshaw).

[7] [2008] SASC 295; (2008) 102 SASR 93 (Brown).

[8] NCON v Spotlight (No 4) [2011] VSC 271, [111]-[112] (citations omitted).

[9] See Bradshaw [2006] FCA 22, [24].

[10] [2005] HCA 12; (2005) 223 CLR 1.