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Representation: Counsel:
D Parish (Plaintiff)
Solicitors:
Penmans Lawyers (Plaintiff)

File Number(s): 2025/454418

Publication restriction: No

JUDGMENT - ex-tempore

1. These proceedings were commenced with the filing of a statement of claim on 20 November 2025. The plaintiff sought orders which included possession of a property in Woy Woy, and damages against each of the defendants for trespass and for breach of contract against the first defendant.

2. The second defendant did file a defence, but it was struck out by Faulkner J on 19 February 2026. None of the defendants appeared today.

3. The background is as follows: on or about 26 November 2024, the plaintiff became the registered proprietor of a residential property in Woy Woy. On 12 April 2025, the plaintiff exchanged contracts for sale of the property with the first defendant. The second defendant is a director and shareholder of the first defendant. The third defendant is also a shareholder. The second and third defendants are husband and wife.

4. When the contracts were exchanged a licence agreement was also entered into to enable the second and third defendants to occupy the property until settlement. The licence fee was $500 per week.

5. Settlement was never achieved and the contract was rescinded on 11 July 2025. A notice to vacate the property was served on the same day. The defendants did not vacate the property. Judgment was entered for possession, and for unliquidated damages to be assessed, on 9 March 2026. The defendants were evicted on 30 April 2026 but did not remove all of their possessions until 12 May 2026.

6. As a result of obtaining possession the remaining claim is for damages and costs. As to the latter, the plaintiff is seeking a gross sum costs order.

7. The plaintiff’s evidence is in her affidavit dated 1 July 2026, and in the affidavit of her solicitor, Ms Rebecca Campbell, dated 2 September 2026. I also adopt the chronology provided by the plaintiff, which I have marked as Exhibit A.

8. The damages claimed are for mesne profits. This type of damages was described by Garling J in Terabond Pty Ltd v Tsilfidis (No 4) [2024] NSWSC 751 at [18]-[19]:

“The claim for mesne profits by the plaintiff is one which, in effect, claims damages for trespass. A strong line of authority makes it clear that the usual measure of such damages is the value of the market rent for the premises which the defendant should have paid for the period of his occupation. Those damages do not depend on whether a landlord would have been able or willing to let the premises to someone else during the relevant period.

I note that the authorities provide that the assessment of damages is itself restitutionary and that what is being calculated is the value to the defendant and not the loss to an owner. See Lamru Pty Limited v Kation Pty Limited (1998) 44 NSWLR 432 at 439 and 440.”

9. The period for which mesne profits are claimed is 12 July 2025 to 12 May 2026. 12 July 2025 is the day after the contract was terminated, the licence was terminated and the notice to vacate was issued. 12 May 2026 is the date when the defendants finally removed their remaining belongings from the property.

10. The calculation of damages is put on two alternate bases. The first is the market rental rate of $700 per week; the second is the licence fee under which the defendants were occupying the premises before the licence was terminated. The former produces a figure of $29,300, the latter a figure of $20,700. In both cases the defendants have been given credit for $800 relating to an earlier overpayment.

11. The plaintiff’s preferred measure of damages is based on market rent, relying on the principles set out in Sydney Local Health District v Macquarie International Health Clinic Pty Ltd (2020) 105 NSWLR 325; [2020] NSWCA 274, at [134]:

“Fourthly, the usual measure of damages for or by way of mesne profits will be the market rent for the premises or for the hire of the goods in their state during the period of the trespass. The calculation of that market rent must have regard to the particular context of the case and characteristics of the property or goods in question, as the variable rent calculated in Inverugie by reference to the holiday season illustrates.”

12. Before adopting the market rental scale however, I think it appropriate to go back to [132] in Macquarie:

“Secondly, in every case in which damages for or by way of mesne profits have been awarded, they are for the defendant’s use of the property in its existing state at the time of the commencement of the trespass. That is entirely logical as a matter of principle because that was the state the property was in when the interference with the plaintiff’s right to exclusive possession commenced, and the logic of the remedy is that the plaintiff was entirely out of possession of the property for the duration of the trespass and hence was in no position to change, alter, improve or develop the property.”

13. The statement in [132] is consistent with Lamru Pty L**td v Kation Pty Ltd (1998) 44 NSWLR 432 and suggests that the licence fee is the correct measure as the value to the defendants when their occupation ceased. While rental may be the “usual” measure of damages I think the existence of the licence fee, which was actually being paid by the defendants, is a better reflection of the value to the defendants.

14. Accordingly, I will give judgment for $20,700. The judgment will be against all three defendants jointly and severally. All three of them remained in occupation, as trespassers, after 12 July 2025 and therefore each of them is liable for the mesne profits.

15. Turning now to the gross sum costs order, such an order is permissible under s 98(4)(c) of the Civil Procedure Act 2005 (NSW).

16. In A.C.N. 627 087 030 Pty Ltd v Poche (No 2) [2026] NSWCA 29, at [10]-[14], Ward P stated:

“The relevant principles to an application for a gross sum costs order are well-known and need only be briefly stated.

In Hamod v New South Wales [2011] NSWCA 375, Beazley JA (as Her Excellency then was), with whom Giles and Whealy JJA agreed, identified (at [816]) the relevant considerations in exercising the wide discretion conferred by s 98(4)(c) of the Civil Procedure Act as follows:

The terms of s 98(4), together with the more general considerations reflected in the Civil Procedure Act, ss 56(1), 57(1)(d) and 60, suggest the factors that merit particular consideration include: the relative responsibility of the parties for the costs incurred (for example, Harrison v Schipp); the degree of any disproportion between the issue litigated and the costs claimed; the complexity of proceedings in relation to their cost; and the capacity of the unsuccessful party to satisfy any costs liability: Ritchie's Uniform Civil Procedure NSW at [s 98.45].

Her Honour went on at [817]-[818] to observe that:

The exercise of the power conferred by s 98(4) is particularly appropriate where the costs have been incurred in lengthy or complex cases and it is desirable to avoid the expense, delay and aggravation likely to be involved in contested costs assessment. This may arise either from the likely length and complexity of the assessment process: Beach Petroleum NL v Johnson (No 2) at 120; Charlick Trading Pty Ltd v Australian National Railways Commission; Australasian Performing Rights Association Ltd v Marlin [1999] FCA 1006; or from the likelihood that the additional costs of formal assessment would disadvantage the successful party because of the likely inability of the unsuccessful party to discharge the costs liability in any event: Harrison v Schipp; Sony Entertainment (Aust) Ltd v Smith [2005] FCA 228; (2005) 215 ALR 788 at [90], [194]-[195]; Hadid v Lenfest Communications Inc [2000] FCA 628.

The power may also be exercised where a party’s conduct has unnecessarily contributed to the costs of the proceedings, especially where the costs incurred have been disproportionate to the result of the proceedings*: Leary v Leary* [1987] 1 WLR 72; [1987] 1 All ER 261*; Sony Entertainment (Aust) Ltd v Smith; Microsoft v Jiang* (2003) 58 IPR 445; [2003] FCA 101; Ritchie's Uniform Civil Procedure NSW at [s 98.60]).

Her Honour also pointed out that the quantum of gross sum costs order must be the consequence of ‘an informed assessment’ ([820]). In Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 (Schipp), to which her Honour referred in the passages extracted above, Giles JA said (at [22]) that the power ‘should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available’.

Hence, in Ahern v Aon Risk Services Australia Ltd (No 2) [2022] NSWCA 39 (Ahern) ([14]-[17]), this Court identified the two issues to be considered in a gross sum costs application as whether there are proper grounds to do so; and whether the Court is in a position to do so, fairly and with some confidence as to the appropriate sum to be awarded.”

17. The amount of damages is modest. Nevertheless, the plaintiff has been required to file the proceedings in the Supreme Court (because of the possession orders) and has had to expend a great deal of time and money to reach the current stage. Once the possession order had been obtained, I think it was entirely reasonable for the matter to remain in this Court.

18. The almost total neglect of their obligations by the defendants, both as to the property and to the proceedings, suggests that they will not take any active part in a formal assessment of costs. Nevertheless, the costs to the plaintiff will continue to grow.

19. The claim is for $62,825.99. It is based on the affidavit of Ms Campbell. Ms Campbell is an experienced litigator. In her affidavit she sets out the history of the case and annexes the costs agreements and invoices relevant to the proceedings.

20. Fees up to the date of her affidavit (2 September 2026) were $65,084.99, including GST and counsel’s fees of $13,200. An extra $10,560 was calculated up to the hearing.

21. Ms Campbell says that solicitor costs have been discounted by 20% bringing them down to $41,668. Adding counsel’s fees of $20,460 and disbursements of $5299.99, the above figure of $62,825.99 is reached. A discount has been incorporated for costs orders already made ($4602).

22. Having regard to the advantages of a gross sum costs order, I think the discount of 20% should be higher, closer to 35%.

23. Adopting a degree of rounding off, I think it appropriate to make a gross sum costs order of $55,000.

24. I make the following orders:

25. Judgment for the plaintiff against the defendants, jointly and severally, in the sum of $20,700.

26. Pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW), the defendants are to pay the plaintiff's costs of the proceedings in the specified gross sum amount of $55,000.00.

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