Wong v Van Vlymen

Relevant Provisions of the March 2016 Settlement Agreement 2 BACKGROUND (a) From around 1994, the parties have been involved in a business relationship known between them as 'the joint venture'. Broadly speaking, the relationship involved various trading and shipping activities from the Pacific region for joint accounts. (b) As at the date of Exchange (i) OSTI and PIL each hold 50% of the shares in each of the Joint Entities; (ii) ICSL is a majority shareholder in LSL and RIPEL (defined in clause 3(e) and 3(g) respectively); (iii) PFL loaned monies to RIPEL and holds a first mortgage charge over RIPEL's assets; (iv) CPTL loaned monies to RIPEL and holds a second mortgage charge over RIPEL's assets; and (v) LSL is a guarantor of both the PFL and CPTL loans to RIPEL. PFL and CPTL each have a charge over the assets of LSL. (c) In 2013, Orbis filed a proceeding NSWSC2013 / 76702 against Wong (Orbis Proceeding). The proceeding was discontinued by consent. A costs order was made in favour of Wong. (d) Wong is the controlling mind and will of the Wong Entities. Van Vlymen is the controlling mind and will of the Van Vlymen Entities. (e) Together, the matters described in paragraphs (a)-(d) above and all matters incidental to them constitute the Business Relationship. (f) The parties have agreed to fully and finally terminate and dissolve the Business Relationship. Essentially, the Wong Entities have agreed to sell their interests to the Van Vlymen Entities. (g) On 25 November 2014, the Parties entered into a settlement agreement on the terms contained in a letter dated 21 November 2014 from Birchall Legal to Harris & Company Solicitors and Notaries (Harris & Co), as modified by an email from Harris & Co to Birchall Legal of 24 November 2014,12:03pm. (h) The term at paragraph 2 of that letter stipulated that, within 60 days of formation, the agreement would be formalised in a comprehensively drafted settlement agreement. This document is that comprehensively drafted settlement agreement. 3 DEFINED TERMS This clause 1 defines terms used in this agreement. Other terms are defined elsewhere in this agreement. (a) Agreement Date is 25 November 2014. (b) Claim means any obligation (including statutory, contractual or equitable), cost, damages, debt, set-off, withholding, advance, monies received, expense, liability, loss, allegation, remedy or judgment, and any demand, right, claim, suit, action, cause of action or proceeding of any kind in relation to them or otherwise, including the costs order and subsequent determination of costs on assessment in favour of Wong in the Orbis Proceeding. (c) Completion means the Wong Entities' and Van Vlymen Entities' obligations under clauses 4.4 and 4.5. (d) Exchange occurs when, all the other parties having executed this agreement, the party who executes it last, executes it. … 4 SETTLEMENT 4.1 Non-refundable deposit Upon Exchange, the Van Vlymen Entities must pay to the Wong Entities a non-refundable deposit in the sum of USD250, 000.00. 4.2 Corporation governance (a) From Exchange until Completion, the Van Vlymen Entities must not exercise any vote as directors of, or otherwise operate, LSL, RIPEL or any entity in which the Wong Entities have an interest, that: (i) is not in the best interests of LSL, RIPEL or the other entities and all of their shareholders; (ii) would impede successful Completion; or (iii) would cause the Wong Entities, were Completion not to succeed, to be left in a materially detrimental position as against their position at the time of Exchange. This clause applies equally to representative, nominee and alternate directors of or controlled by the Van Vlymen Entities (including Van Vlymen, Mr Colin Jones and Ms Kay Littlejohn) and the Van Vlymen Entities must procure that those directors comply with the terms of this clause (including in relation to the exercise of a veto vote) and in any event in accordance with any applicable shareholder agreement. (b) To be clear, the disposal of any major assets in the Solomon Islands would contravene paragraph (a). Further to be clear, small, regular land sales to cover the Wong Entities' and Van Vlymen Entities' 'joint venture' Business Relationship expenses, and that are notified to the directors of LSL and RIPEL (which includes Patrick Wong) at least fortnightly, do not contravene paragraph (a). 4.3 Abstinence from voting Subject to the Van Vlymen Entities' full performance of their obligations under clauses 4.1 and 4.2, the Wong Entities undertake, from Exchange to Completion, to abstain from exercising any vote as directors of LSL and RIPEL. 4.4 Settlement sums As soon as possible after Exchange, but in any event within 120 days of Exchange, on a date to be agreed between the Wong Entities and Van Vlymen Entities (Completion Date), the Van Vlymen Entities must pay to the Wong Entities: (i) a sum of USD1,750,000.00; and (ii) a sum of SBD15,000,000.00 by bank cheque in Honiara, Solomon Islands. 4.5 Transfer of interests (a) On the Completion Date, the Wong Entities must: (i) transfer to the Van Vlymen Entities all shares in OSTI; and (ii) relinquish all directorships of the Wong Entities, the Joint Entities, RIPEL and LSL. (b) The Wong Entities warrant that, as at the Completion Date prior to transfer: (i) their shares in OSTI are owned absolutely and not encumbered or charged in any way; and (ii) OSTI does not have any liabilities, whether or not existing, presently known or accrued or contingent or future whether contingent or otherwise, or debts, that have not been disclosed to the Van Vlymen Entities. (c) The Wong Entities indemnify and will keep indemnified (to be clear, jointly and severally) the Van Vlymen Entities for any breach of the warranties in paragraph (b). … 6.2 Liquidated damages (a) If the Van Vlymen Entities: (i) fail to agree a date for Completion in accordance with clause 4.4 (except if the Wong Entities are not ready, willing and able to agree a date for Completion); or (ii) fail to pay the whole of the Total Van Vlymen Consideration before or on the Completion Date (except if the Wong Entities' are not ready, willing and able to perform all of their Completion obligations on the Completion Date); and (iii) have breached clause 4.2, then the Van Vlymen Entities are liable (to be clear, jointly and severally) to pay liquidated damages to the Wong Entities of the shortfall in Total Van Vlymen Consideration, less USD50,000.00. (b) The Wong Entities and Van Vlymen Entities acknowledge and agree that: (i) the liquidated damages payable pursuant to paragraph (a) are a genuine pre-estimate of the loss and damage that the Wong Entities will suffer in the event of the default by the Van Vlymen Entities specified in the paragraph, and goes no further than would be reasonable to protect the interests of the Wong Entities in the circumstances contemplated; and (ii) USD50,000.00 is fair value of the shares not transferred by the Wong Entities by reason of the Van Vlymen Entities default. 7 RELEASES 7.1 Releases given (a) Subject to the full performance of all obligations under clause 4 and upon successful Completion, the parties release and discharge each other from all Claims, whether or not existing, presently known or accrued, or contingent or future, that they may have against the other arising out of, in relation to or in connection with, the Business Relationship (Releases). (b) The Releases have no effect over any Claims the parties may have against each other arising out of any breach of this agreement. 7.2 Releases procured (a) With effect from the Completion Date and continuously thereafter, the Van Vlymen Entities warrant that they have procured releases of the Wong Entities by LSL and RIPEL on terms no less favourable to the Wong Entities than the Releases given by the Van Vlymen Entities. …

Relevant Provisions of the November 2016 Deed 2 BACKGROUND (a) On 25 November 2014, the Settlement Parties entered into the Contract requiring its formalising in terms to the effect of the 2014 Settlement Agreement. (b) By orders made on 9 March 2016 by Stevenson J in the 2015 Proceedings, the Court ordered the Contract to be specifically performed. (c) On 11 March 2016, the Settlement Parties entered into the 2014 Settlement Agreement. (d) The Van Vlymen Entities are in default of their obligations under the 2014 Settlement Agreement. (e) By orders made on 17 June 2016 by Stevenson J in the 2015 Proceedings (17 June 2016 Orders), the Court ordered the Settlement Parties to specifically perform and carry into effect the 2014 Settlement Agreement. (f) On 2 September 2016, Mr Darin was appointed the Receiver and Manager of the interests of Mr Van Vlymen in the Bayview Property and the Kulnura Property, and authorised and directed to procure, to the extent those properties can, the payment of monies required for the performance by the Van Vlymen Entities of the 2014 Settlement Agreement. (g) By orders made on 5 October 2016 by Stevenson J in the 2016 Proceedings, Mr Darin and Mr Malanos (Trustees) were appointed trustees for the sale of the Bayview Property and the Kulnura Property pursuant to s 66G of the Conveyancing Act 1919 (NSW). (h) The Trustees propose to sell the Bayview Property and the Kulnura Property at auction on 5 November 2016, subject to agreement otherwise in terms of this deed. (i) The Van Vlymen Entities and Mrs Van Vlymen wish to obtain a stay of the order for specific performance of the 17 June 2016 Orders and a postponement of the sale of the Bayview Property and Kulnura Property to give them more time to complete the 2014 Settlement Agreement without the need for their sale. (j) On or around 28 October 2016, Mr Van Vlymen initiated the negotiations underlying this deed by contacting Wong by email. (k) On or around 2 November 2016, Mrs Van Vlymen agreed to contribute her interest (together with that of Mr Van Vlymen) in the Kulnura Property and Bayview Property to secure to the Wong Entities the payment by the Settlement Parties of the monies required by the 2014 Settlement Agreement and this deed, and to consent to the registration by the Wong Entities of caveats against those titles to protect that equitable interest in them, which agreement is embodied is this deed. (l) The parties are agreed to postpone the sale of the Bayview Property and the Kulnura Property, to seek a stay to the 2015 Proceedings and have further orders made in the 2015 Proceedings and 2016 Proceedings on the terms set out in this deed. (m) The parties enter into this deed to provide: (i) a mechanism by which, if the terms of this deed are complied with by the Van Vlymen Entities and Mrs Van Vlymen, the 2014 Settlement Agreement will be satisfied and the 2015 Proceedings and the 2016 Proceedings settled; (ii) the Wong Entities with security, in the form of a mortgage over the Bayview Property, the Kulnura Property, the Orbis Shares and the General Security Agreement, for the money owing by the Van Vlymen Entities and Mrs Van Vlymen under this deed, or alternatively, the 2014 Settlement Agreement; (iii) certainty that Mrs Van Vlymen has obtained independent legal and financial advice in relation to, and is fully aware of and agrees to, the security being provided; and (iv) a mechanism by which, if the terms of this deed are not complied with by the Van Vlymen Entities and Mrs Van Vlymen, the Wong Entities may more efficiently proceed with enforcing the 2014 Settlement Agreement and their rights arising from the 2015 Proceedings and this deed, with the trusteeship of Darin and Malanos pursuant to the 2016 Proceedings. 3 DEFINED TERMS This clause 3 defines terms used in this deed. Other terms are defined elsewhere in this deed. … (e) 2015 Total Van Vlymen Consideration means: (i) USD250,000; (ii) USD1,750,000; plus (iii) SBD15,000,000 paid in accordance with the 2014 Settlement Agreement, and, to be clear, excludes the 2016 Settlement Payment. … (i) 2016 Settlement Payment means an amount of AUD1,400,000 payable by the Van Vlymen Entities and Mrs Van Vlymen in lieu of the releases given by the Wong Entities in clause 8 and procuring the release of Darin and Malanos in favour of the Van Vlymen Entities and Mrs Van Vlymen in clause 8(a) and giving the Wong Entities' Indemnity in favour of Darin and Malanos. (j) 2016 Total Van Vlymen Consideration means: (i) USD1,750,000; plus (ii) SBD15,000,000 paid in accordance with clause 6.3(b), and, to be clear, excludes the 2016 Settlement Payment. … (bb) Settlement Date means 4:00pm, 28 February 2017. … 5 STAY OF PROCEEDINGS, ENFORCEMENT AND SALE OF PROPERTIES (a) Upon this deed coming into force and effect, the parties agree to move the Court for orders: (i) in the 2015 Proceedings for a stay of those proceedings, including enforcement of all orders made (without affecting the appointment of the Receiver and Manager) until the Settlement Date; and (ii) in the 2016 Proceedings for a stay of all outstanding orders (without affecting the appointment of the Trustees), vacation of the hearing date of the issue of apportionment and authorisation of the Trustees and Receiver/Managers' postponement of the sale of the Bayview Property and the Kulnura Property until the Settlement Date, in both proceedings subject to and conditional upon compliance by the Van Vlymen Entities and Mrs Van Vlymen with the terms of this deed and liberty to apply (substantively to the effect of the forms of orders contained in Schedules 3 and 4 to this deed). (b) Conditional upon such authorisation, the Trustees and Receiver/Manager shall postpone the sale of the Bayview Property and the Kulnura Property. (c) If this deed is fully complied with and all monies owed under it are paid as required by it and the 2014 Settlement Agreement is completed in accordance with it, the parties agree to move the Court for orders discharging all extant orders made in and further consideration of and discontinuing the 2015 Proceedings and the 2016 Proceedings. 6 PAYMENT 6.1 Upfront Payments (a) On Exchange, the Van Vlymen Entities and Mrs Van Vlymen must pay to Wong the First Upfront Payment, (b) The Van Vlymen Entities and Mrs Van Vlymen must pay to Wong the Second Upfront Payment on or before 30 November 2016 and in any event as soon as possible, 6.2 2016 Settlement Payment The Van Vlymen Entities and Mrs Van Vlymen must pay to Wong the 2016 Settlement Payment, less the Upfront Payments, on or before the Settlement Date and in any event as soon as possible. 6.3 2016 Total Van Vlymen Consideration (a) Subject to paragraph (b), the Van Vlymen Entities and Mrs Van Vlymen must pay to Wong the 2016 Total Van Vlymen Consideration on or before the Settlement Date, and in any event as soon as possible. (b) Payment of the SBD15,000,000 component of the 2016 Total Van Vlymen Consideration must be paid in USD or AUD equivalent, such amount to be calculated using the average Westpac Inward TT exchange rate for the five banking days immediately preceding the date of payment. 6.4 Manner and method of payment (a) Subject to paragraph (b), all payments under this clause must be made in a manner, time and place reasonably acceptable to Wong. To be clear, payment by way of personal cheque is not reasonably acceptable to Wong. (b) Payment of the 2016 Total Van Vlymen Consideration must be made into the Trust Account. (c) All payments shall be due and made without set-off, deduction or counter-claim. 7 SECURITY ... 7.3 Wong Entities' Indemnity The Wong Entities indemnify Darin and Malanos for all remuneration, costs, expenses, disbursements (including legal fees) (Costs) incurred by them as Receivers and Managers and trustees for sale (as set out in clause 1.4) to the extent that such Costs have not been met by the Van Vlymen Entities pursuant to their obligations pursuant to this deed, such indemnity to be satisfied and made good by the Settlement Date, and to that end, the Wong Entities hereby charge in favour of Darin and Malanos their interest in the Bayview Mortgage and the Kulnura Mortgage to secure such indemnity. 8 RELEASES (a) On payment in full of the 2016 Settlement Payment in accordance with this deed and on condition that the Van Vlymen Entities and Mrs Van Vlymen have not otherwise committed a Default under clauses 10.1(i) to 10.1(iii), the Wong Entities and Darin and Malanos release the Van Vlymen Entities and Mrs Van Vlymen from any further liability for the fees and disbursements of Darin and Malanos (including legal costs) incurred to 28 February 2017 (inclusive). (b) On payment in full of the 2016 Settlement Payment in accordance with this deed and on condition that the Van Vlymen Entities and Mrs Van Vlymen have not otherwise committed a Default under clauses 10.1(i) to 10.1 (iii), the Wong Entities also release the Van Vlymen Entities and Mrs Van Vlymen from any further liability for the legal costs and disbursements of the Wong Entities incurred to 28 February 2017 (inclusive) in the 2015 Proceedings, the 2016 Proceedings and costs assessment NSWSC 2016/192881. (c) On payment in full of the 2016 Settlement Payment in accordance with this deed and on condition that the Van Vlymen Entities and Mrs Van Vlymen have not otherwise committed a Default under clauses 10.1(i) to 10.1(iii), the Wong Entities release the Van Vlymen Entities from any further liability for interest accrued to 28 February 2017 in respect of: (i) Darin and Malanos' having incurred, and Wong's having paid or being liable to pay without reimbursement, all of the fees and disbursements of Darin and Malanos (including legal costs) referred to in paragraph (a) to date; (ii) the failure of the Van Vlymen Entities to pay all of the assessed costs of proceeding NSWSC 2013/76703; (iii) Wong's having paid or being liable to pay, without reimbursement, all of the legal costs referred to in paragraph (b) to date; and (iv) the failure of the Van Vlymen Entities to pay the 2015 Total Van Vlymen Consideration in accordance with the 2014 Settlement Agreement (namely USD250,000 by 24 January 2015 and the balance by 24 May 2015). (d) The Wong Entities, the Van Vlymen Entities and Mrs Van Vlymen release Darin and Malanos from any Claims arising out of any acts or omissions by them as Receivers and Managers and trustees for sale(asset out in clause 1.4), save that nothing in this clause shall serve to release Darin and Malanos from any Claim arising out of dishonesty, wilful misconduct or gross negligence. … 10 DEFAULT 10.1 Defaults Without limiting any other matter, each of the following events would be material and essential fundamental defaults of essential terms of this deed (Defaults): (i) the Van Vlymen Entities and Mrs Van Vlymen do not pay the 2016 Settlement Payment in the amount and by the date stated in clause 6.2; (ii) the Van Vlymen Entities and Mrs Van Vlymen do not pay the 2016 Total Van Vlymen Consideration in the amount and by the date stated in clause 6.3; (iii) any Van Vlymen Entity or Mrs Van Vlymen makes any Claim in respect of this deed prior to the Settlement Date, including a Claim that this deed or any provision of it is unenforceable or should be set aside; and (iv) any (other) material breach of this breach of this deed. 10.2 Consequences of default (a) If any Default occurs; (i) the Wong Entities may terminate this deed immediately by giving notice in writing to any Van Vlymen Entity or Mrs Van Vlymen, including by email to any known email address of Mr Van Vlymen or Mrs Van Vlymen; (ii) the Wong Entities may maintain and pursue the 2015 Proceeding and all claims made in them or arising out of the subject-matter of them unaffected by their agreement to the terms of this deed and the Van Vlymen Entities covenant not to object to their doing so; (iii) Darin and Malanos may maintain and continue the 2016 Proceeding and all claims made in them or arising out of the subject-matter of them unaffected by their agreement to the terms of this deed and the Van Vlymen Entities and Mrs Van Vlymen covenant not to object to his doing so; (iv) notwithstanding anything else, the Van Vlymen Entities and Mrs Van Vlymen consent to all of the Wong Entities' costs of the pursuit of the 2015 Proceeding and Darin and Malanos' costs of the pursuit of the 2016 Proceeding from the date of Default being recoverable and on the indemnity (solicitor-client) basis and orders of the court to that effect; ... (b) In respect of any Default in payment of monies under the terms of this deed, Wong may recover the amount of that payment as a liquidated debt from the Van Vlymen Entities and Mrs Van Vlymen in addition to any rights he may have to recover monies in the 2015 Proceedings or the 2016 Proceedings and under the 2014 Settlement Agreement, after making all just allowances for the amount and nature of any payments made. … (d) In the event of any Default, further and without limiting anything else in this deed: (i) the Wong Entities, Darin or Darin and Malanos may seek to recover fees, legal costs and disbursements of receivership, management and trusteeship incurred from the date of Default or 1 March 2017, whichever is earlier; (ii) the Wong Entities may seek to recover the Wong Entities' costs of the pursuit of the 2015 Proceeding incurred from the date of Default or 1 March 2017, whichever is earlier; (iii) Darin may seek to recover Darin and Malanos' costs of the pursuit of the 2016 Proceeding incurred from the date of Default or 1 March 2017, w/hichever is earlier; (iv) the Wong Entities may seek to recover interest in respect of that Default accruing from the date of Default or 1 March 2017, whichever is earlier. 11 COMPLETION OF THE SETTLEMENT AGREEMENT Subject to the Van Vlymen Entities' and Mrs Van Vlymen's full performance of this deed without breach, including compliance with warranties and the payment of all monies by the Van Vlymen Entities and Mrs Van Vlymen to Wong on or before the Settlement Date, Completion as defined in the 2014 Settlement Agreement shall occur on the Settlement Date. 12 ACKNOWLEDGEMENTS & WARRANTIES 12.1 The Van Vlymen Entities and Mrs Van Vlymen acknowledgements (a) The Van Vlymen Entities and Mrs Van Vlymen acknowledge that: … (ii) nothing in this deed varies or derogates from the 2014 Settlement Agreement; (iv) subject to the express terms of this deed, nothing in this deed derogates from any order of the Court or any right conferred on the Wong Entities, Darin or Darin and Malanos under the orders; and … 13 INDEMNITIES (a) Each Van Vlymen Entity and Mrs Van Vlymen indemnifies Wong for all loss, damage, costs and expenses (including legal costs on an indemnity (solicitor-client) basis) incurred or suffered, or to be incurred or suffered, by him as a result, directly or indirectly, of: (i) any default by any Van Vlymen Entity or Mrs Van Vlymen under this deed; (ii) any Van Vlymen Entity or Mrs Van Vlymen making any claim or arguing any defence that contradicts an acknowledgement given under this clause 13; (iii) any breach of any warranty given by any Van Vlymen Entity or Mrs Van Vlymen under this deed.

Issues

1. Mr Sydney Birchall, solicitor for the Wong Entities, summarised the gross amounts that the Wong Entities say the Van Vlymen Entities still owe Mr Wong in USD and AUD in his affidavit affirmed 19 May 2020. They are: TABLE ONE: GROSS AMOUNTS CLAIMED BY THE WONG ENTITIES Fig. US Dollar components USD
2. 2016 Total Van Vlymen Consideration - USD sum 1,750,000
3. Interest on 2016 Total Van Vlymen Consideration - USD sum [TBD]
4. 2016 Total Van Vlymen Consideration - SBD sum 1,934,250 [SBD15 million]
5. Interest on 2016 Total Van Vlymen Consideration - SBD sum [TBD]
6. Interest on Non- Refundable Deposit - USD sum [TBD] Fig. Australian Dollar components AUD
7. 2016 Settlement Payment 1,400,000
8. Interest on 2016 Settlement Payment [TBD]
9. Worrells fees and disbursements (ex legals) from 1/3/17 235,530
10. Interest on Worrells fees and disbursements (ex legals) from 1/3/17 [TBD]
11. Worrells fees and disbursements (ex legals) to 28/2/17 31,399
12. Interest on Worrells fees and disbursements (ex legals) to 28/2/17 [TBD]
13. Eakin McCaffery Cox (EMC) (solicitors for Mr Darin) fees and disbursements from 1/3/17 208,205
14. Interest on EMC fees and disbursements from 1/3/17 [TBD]
15. EMC fees and disbursements to 28/2/17 71,540
16. Interest on EMC fees and disbursements to 28/2/17 [TBD]
17. Birchall Legal fees and disbursements from 1/3/17 to 15/5/20 581,667 [now revised to 710,368]
18. Interest on Birchall Legal fees and disbursements from 1/3/17 [TBD]
19. Birchall Legal fees and disbursements March 2016 to 28/2/17 133,119
20. Interest on Birchall Legal fees and disbursements March 2016 to 28/2/17 [TBD]
21. Unpaid costs assessed under NSWSC 2016/192881 209,481
22. Interest on costs assessed under NSWSC 2016/192881 [TBD]
23. Unpaid assessed costs under NSWSC 2014/254655 9,500
24. Interest on unpaid assessed costs under NSWSC 2014/254655 [TBD]

1. In the table "TBD" stands for "To be determined" as the amounts of interest are yet to be calculated.
2. Mr Birchall also summarised the gross amounts paid by or recovered from the Van Vlymen Entities, as well as the net amounts actually received by the Wong Entities after deductions by the receiver. There is no dispute about the quantum of these receipts and the parties agree that the Van Vlymen Entities should be credited for the gross amounts totalling AUD2,237,477. TABLE TWO: GROSS AND NET AMOUNTS PAID BY OR RECOVERED FROM VAN VLYMEN ENTITIES Fig. Payments/recoveries AUD Net received by Wong [Gross amounts]
3. First Upfront Payment paid 4/11/16 100,000 100,000
4. Second Upfront Payment paid 9/11/16 20,000 20,000
5. Sale proceeds of Bayview property 10/7/17 448,907 247,453
6. Sale proceeds of Kulnura property 22/8/17 1,168,570 1,068,660
7. Pacific Investment Pty Ltd (PIL) (Fifth Defendant) share of Bloody Ridge dividend 300,000 269,874
8. PIL further share of Bloody Ridge dividend 21/3/18 124,500 108,000
9. PIL further share of Bloody Ridge dividend 21/12/18 75,500 75,500
10. SUB-TOTAL RECOVERED v PAID OUT 2,237,477 1,889,487
11. Personal funding of Receiver by Wong - - 79,350
12. TOTAL AUD PAID OUT TO PLAINTIFFS - 1,810,137

1. The Van Vlymen Entities accept that they must pay the capital amounts in Items 1, 3 and 7 of Table One (for the remainder of the judgment "Item" numbers will refer to the figure numbers in Table One). Those Items represent the USD sum of the "2016 Total Van Vlymen Consideration" (defined in cl 3(j) of the Deed), the SBD sum of the 2016 Total Van Vlymen Consideration, and the "2016 Settlement Payment" (defined in cl 3(i) of the Deed), respectively. It is agreed that the amount owing on Item 7 has been reduced from AUD1.4m to AUD1.28m by the receipt of the First and Second Upfront Payments. However, in relation to Item 3, the parties dispute which of them is entitled to choose the currency ("USD or AUD equivalent") in which the SBD amount is to be paid under cl 6.3(b) of the November 2016 Deed. They also dispute the meaning of "Westpac TT exchange rate" in that clause and the date on which the exchange rate should be calculated.
2. The remaining capital amounts (Items 9, 11, 13, 15, 17, 19, 21, 23) concern fees and disbursements of the receiver (Mr Darin of Worrells), the receiver's solicitor (Eakin McCaffery Cox ('EMC')) and the Wong Entities' solicitor (Mr Birchall). The Van Vlymen Entities dispute Items 11, 15, 19, 21 and 23 because they say that all of the costs referred to in those Items are the subject of a release in cl 8 of the November 2016 Deed, and, to the extent that cl 8 provides otherwise, that clause is an unenforceable penalty. They otherwise dispute the principles to be applied in determining the quantum of the amounts claimed in Items 17 and 19 (see submissions below).
3. The Van Vlymen Entities dispute almost all of the claims for interest on a variety of grounds (see submissions below). With respect to Items 2, 4, 5 and 8, they say inter alia that the Wong Entities have elected to forsake any claim for damages for non-compliance with the orders for specific performance or the underlying contract and therefore that they are precluded from claiming interest (or 'damages for loss or use of money') on the unpaid 2016 Total Van Vlymen Consideration and 2016 Settlement Payment as well as the non-refundable deposit of USD250,000 that was paid on 26 August 2016. They also raise the penalty argument in relation to Items 2, 4, 5, 12, 16, 20, 22 and 24.
4. In relation to the releases in cl 7 of the November 2016 Deed, the parties agree that the releases are to be provided on completion.
5. Therefore the issues that remain in dispute between the parties can be summarised as follows: 1. Did the Wong Entities elect to forsake any claim for damages for non-compliance with the orders for specific performance or the underlying contract? 2. Does cl 8 of the November 2016 Deed purport to impose on the Van Vlymen Entities what is in law an unenforceable penalty? 3. On what basis should the gross sum costs order in relation to Items 17 and 19 be calculated? 4. Are the various disputed claims for interest otherwise payable and on what basis should each item of interest be calculated? 5. In relation to Item 3, who is entitled to elect between USD or AUD, what does "Westpac TT exchange rate" mean, and on what date should the exchange rate be calculated?

Past relevant orders of the Court: Specific Performance and Interest

1. Mr Birchall also identified the past orders of the Court that related to the question of specific performance and interest in his affidavit affirmed 23 April 2020: Date Justice Order 9/3/16 Stevenson J 1 Order that the contract referred to at [2] of the judgment of 1 March 2016 (Wong v Van Vlymen [2016] NSWSC 161) ("the Contract") be specifically performed. 8 Reserve further consideration of the matter. 17/6/16 Stevenson J 1 Orders the Defendants to: a) specifically perform and carry into effect the Settlement Agreement executed by them on 11 March 2016 pursuant to the previous orders of the Court. 6 Reserves further consideration of the matter; in particular as to further or alternative relief by way of damages and interest. 5/8/16 Sackar J 6 Reserves further consideration of the matter; in particular as to further or alternative relief by way of damages and interest. 2/9/16 Sackar J 5 Reserves further consideration of the matter; in particular as to further or alternative relief by way of damages and interest. 28/10/16 Sackar J 2 Reserves further consideration of the matter; in particular as to further or alternative relief by way of damages and interest. 4/11/16 Sackar J 2 Reserves further consideration of the matter; in particular as to further or alternative relief by way of damages and interest. 3/3/17 Sackar J 3 Reserves further consideration of the matter; in particular as to further or alternative relief by way of damages and interest.

Merger & Election

1. The Van Vlymen Entities submit that the right to pursue any claim for damages caused by non-compliance with the 2014 Contract underlying Stevenson J's order for specific performance merged in the judgment for specific performance (Lahoud v Lahoud (No 2) [2012] NSWCA 55 at [30]-[31] ('Lahoud'). They submit that this 'merger' argument is relevant to any claim for damages (or interest) up to 9 March 2016 (the date of Stevenson J's orders).
2. The Van Vlymen Entities further submit that, subsequently, the Wong Entities "unequivocally elected" to enforce the order for specific performance (e.g. through the appointment of receivers) rather than seek an inquiry as to damages for non-compliance with it (Despot v Registrar General [2016] NSWCA 5 at [117]-[118], [123] ('Despot') (the 'election argument'). They further submit that the November 2016 Deed was a "mechanism" for "enforcing" the orders of specific performance (cl 2(m)(iv) of the Deed) and did not create fresh contractual rights with respect to the USD1.75m and SBD15m amounts. They note that on 4 November 2016, the Court made orders noting the existence of the Deed and staying the order for specific performance up to and including the settlement date but not after it (see also cl 5 of the Deed). They submit that at all times the parties' rights and obligations remained under the supervision and control of the Court (Georges v Wieland [2010] NSWSC 1378 at [25]) so that once the order for specific performance "had sprung back into life" and there was non-compliance with it, the Wong Entities had a second election to make (Despot at [123]).
3. The Wong Entities submit that the merger argument fails to appreciate that the Further Amended Statement of Claim of 3 September 2015 sought damages at law or in equity, alternatively or in addition to the orders for specific performance, and interest, and that the orders of Stevenson J expressly reserved "further consideration of the matter" and "liberty to apply". They further submit that the 2016 judgment concerned only the 2014 Contract; because the Settlement Agreement had not been executed, no right or obligation under it (a fortiori, the Deed) could have been the subject of the Further Amended Statement of Claim or judgment. They say that contractual rights do not merge in an order for specific performance and may be reconsidered (Lahoud at [30]; Despot at [61], [112]-[113], [115]; Johnson v Agnew [1980] AC 367).
4. The Wong Entities also submit that the election argument is misconceived in law and fact. In particular, they refer to the past orders of the Court which reserved further consideration of the matter, including further or alternative relief by way of damages and interest and liberty to apply (see Abigroup Ltd v Abignano (1992) 39 FCR 74, 88; Australian Hardwoods Limited v Hudson Investment Group Ltd (2007) 70 NSWLR 201 at [50], [51], [56], [58], [77], [84] ('Australian Hardwoods')). They submit that the election to be made in response to non-compliance (found in Despot at [18]) does not require the abandonment of any damages claim upon choosing to enforce the order. Section 68 of the Supreme Court Act 1970 (NSW) expressly allows the Court to award damages in equity "either in addition to or in substitution for… specific performance" (see also Lahoud at [19]). The time for election between alternative remedies is when judgment is given upon the availability of remedies (Despot at [11]; see also United Australia Ltd v Barclays Bank Ltd [1941] AC 1, 30; Ogle v Comboyuro Investments Pty Ltd (1976) 136 CLR 444, 459-62; Fullers' Theatres Ltd v Musgrove (1923) 31 CLR 524, 546; Ailakis v Olivero (No 2) [2014] WASCA 127). The Court "may substitute other forms of relief where a decree of specific performance is not complied with" (Riltang P/L v L P/L (2004) NSWSC 977 at [51], approved in Australian Hardwoods at [53]).

Penalty

1. The Van Vlymen Entities submit that having agreed to pay an additional sum of AUD1.4m in consideration for the releases in cl 8 of the Deed (see cl 3(i) of the Deed), the effect of cl 8 was to impose an additional liability on the Van Vlymen Entities to pay all of the released amounts if there was any default for even a fractional period of time or for a fractional sum of money in paying the amounts specified in cll 6.2 and 6.3 by 4pm on 28 February 2017. They say that cl 8 is penal in character when viewed "as a matter of substance" (Andrews v ANZ Banking Group Ltd (2012) 247 CLR 205 at [10] ('Andrews')) and that it imposed an impost that was exorbitant and grossly disproportionate to any loss or damage the Wong Entities may suffer as a result of breach (Paciocco v ANZ Banking Group Ltd (2016) 258 CLR 525 at, e.g., [34] ('Paciocco')). They further submit that there was nothing in the "commercial context", or in the "commercial" or "business" interests of the Wong Entities, that denies that cl 8 was a penalty (Paciocco at [256], [283], [272]); the only relevant commercial or business interest which the Wong Entities had was obtaining a price for their shares and there was no evidence of any detriment other than loss of use of money (which can be quantified).
2. The Wong Entities deny that cl 8 is a penalty. They submit that despite the clumsy definition in cl 3(i), it is unnecessary to ascribe consideration to the payment of the AUD1.4m, the agreement being in the form of a deed. They say that AUD1.4m simply represents the "commercial break point" agreed in arm's length negotiations for an extended completion on certain terms. The Wong Entities submit that cl 8 gave the Van Vlymen Entities the opportunity to obtain the releases from acknowledged existing liabilities upon payment of the AUD1.4m (which was required by cl 6.2) and lack of default under cll 10.1(i)- 10.1(ii) (Andrews at [10]; Ryan Kay v Playup Australia Pty Ltd [2020] NSWCA 33 at [94]; Auzcare P/L v Idameneo (No 123) P/L (2015) 91 NSWLR 581 at [21] ('Auzcare'), quoting O'Dea v Allstates Leasing System (WA) Pty Ltd (1983) 152 CLR 359, 367 ('O'Dea')). They also say that the benefit of cl 8 was in addition to the substantive benefits of the Deed in cl 5, which are insusceptible to monetary evaluation (Andrews at [11]). The Wong Entities further submit that, given the Van Vlymen Entities' failure to perform up to the Deed, it is hardly surprising that the Deed provided that time was of the essence for payment and completion by 28 February 2017; it could not in those circumstances be "extravagant and unconscionable" to rely on its terms (Paciocco at [34], [54], [164], [221], [240] and [279]). See further Paciocco, 168 and 265; Arab Bank Australia Ltd v Sayde Developments P/L (2016) 93 NSWLR 231 at [76], [106], [110].

Items 9 & 13 - Worrells'/EMC's fees and disbursements and costs from 1 March 2017

1. The Van Vlymen Entities accept liability for these Items. Given that a significant part of the relevant fees and disbursements were paid out of the proceeds of execution against the Van Vlymen's assets, the parties agree that the Van Vlymen Entities' gross liabilities with respect to these Items (shown in Table One) should be set off against the gross receipts in Table Two above.
2. However, the Wong Entities also submit that the receivership is continuing and so further expenses will need to be taken into account in due course.

Items 11 & 15 - Worrells'/EMC's fees and disbursements up to 28 February 2017

1. The Van Vlymen Entities raise the penalty argument in relation to these Items. However, in the event that the penalty argument is rejected, the parties agree that liability should be calculated on the same basis as in relation to Items 9 & 13.

Item 17 - Birchall legal fees and disbursements since 1 March 2017

1. The parties agree that the urgency of settlement is such that a gross sum costs order should be made in respect of this Item. They also agree that a final assessment ought to await delivery of invoices for work done after 1 May 2020 (see estimate below). However, they seek establishment of the applicable principles.
2. The amount claimed in Item 17 has been revised to AUD710,368. The Van Vlymen Entities broke this figure up into four components.
3. First, there is a gross amount invoiced with respect to two indemnity cost orders totalling AUD236,293 (see Sydney Birchall affidavit dated 19 May 2020 at [107] and [110(a)(i)] and bundle of invoices). The Van Vlymen Entities accept that the GST component should be included in the award. However, they submit that a "typical" recovery on an indemnity basis is 90% (The Berry Rural Co Operative Society Ltd v Sepak Industries Pty Ltd (No 4) [2018] NSWSC 1902 at [16] per Stevenson J ('Berry Rural')) and the figure should be reduced accordingly. The Wong Entities submit that there is no legal foundation for the reduction. They say that Stevenson J was reciting evidence given in the circumstances of that case and not finding 90% was a "typical" recovery on "an indemnity basis". They say there is nothing typical about the instant case. They also say that cl 13(a) of the Deed entitles them to the full 100% indemnity against "all loss, damage, costs and expenses", and that the words "(including legal costs on an indemnity (solicitor-client) basis)" in that clause do not reduce their unlimited entitlement but merely avoid any misunderstanding as to its width.
4. Secondly, there are costs incurred between 1 March 2017 and 1 March 2020 which are not the subject of an indemnity cost order totalling $84,701. The Wong Entities submit that the contractual indemnity applies and there is no basis for reducing the entitlement from 100% to 90% or at all. The Van Vlymen Entities submit that cl 10.2(a)(iv) of the Deed provides that the costs are to be recoverable on a solicitor/client basis. They say any distinction between costs assessed on indemnity basis and solicitor-client basis is a fine one so that the 10% reduction should also apply.
5. Thirdly, the costs incurred since 1 March 2020 have been invoiced up to 1 May 2020, totalling $103,328. All costs and disbursements since 1 May 2020 are the subject of an estimate totalling $274,000. The parties make the same arguments as summarised above with respect to the Wong Entities' contractual entitlement to full indemnity.
6. The fourth amount of $12,000 has been estimated for completion of the transaction and the parties agree that amount is reasonable and should be allowed.
7. Finally, the Van Vlymen Entities submit that any costs ordered to be paid by the Wong Entities to the Van Vlymen Entities should be deducted. The Wong Entities submit that while this is the case theoretically, no costs orders have been or should be made against the Wong Entities.

Items 19, 21 and 23 - Birchall legal fees and disbursements up to 28 February 2017

1. The Van Vlymen Entities raise the penalty argument in relation to these three Items. They submit that if that argument is rejected, the amounts referred to in Items 21 and 23 have been assessed and the amount payable is AUD218,981. That leaves Item 19, totalling AUD133,119. That figure is said to be based on an estimated recovery (in respect of the gross figure of $158,888) of 80% of solicitors' costs and 90% of counsel's fees. A portion of the gross figure ($20,055) is the subject of an indemnity costs order. (See Mr Birchall's 19 May 2020 affidavit [111]-[115] and the associated bundle of invoices).
2. The Van Vlymen Entities submit that there should only be 90% recovery with respect to the amount subject of the indemnity costs order (Berry Rural at [16]). They further submit that there should only be 70-75% recoverability with respect to the balance of the solicitors' and counsel's costs (Global Medical Solutions Australia Pty Ltd v Axiom Molecular Pty Ltd [2013] NSWSC 1433 at [96]-[103]; Smith v Australian Executor Trustees Ltd (No 4) [2018] NSWSC 1584 at [32]; and ASIL Foundation (Lending) Pty Ltd v Langridge [2019] NSWSC 1574 at [43]-[44]).
3. The Wong Entities submit that the authorities have no application, and that there is no reason to reduce the award of costs on the indemnity basis below an actual indemnity or further discount the party-party costs on the evidence of this case. They submit that the discounts they applied accord with Mr Birchall's experience and modest charging and the "acid test" of assessment certified by Mr Camilleri of the party-party costs to 9 March 2016 (see Mr Birchall's 19 May 2020 affidavit [114]-[121], associated exhibits and T.46-49).

Interest

1. The Wong Entities submit that cl 10.2(d)(iv) of the Deed gives them a contractual right to interest post 28 February 2017, while cl 8(c) implicitly acknowledges a right to interest up to that date. They further submit that even if they do not have contractual rights to interest, they have a statutory right to interest at court rates under ss 100 and 101 of the CPA.
2. The Wong entities submit that the court rates of interest for the purposes of ss 100 and 101 of the Civil Procedure Act 2005 (NSW) ('CPA') are governed by Practice Note Gen rule 16, which provides for interest at the Reserve Bank cash rate plus 4%, and UCPR 36.7, which provides for interest at the Reserve Bank cash rate plus 6%, respectively. They submit that the appropriate rates to be applied with respect to the US Dollar sums are the US Federal Funds rate plus the same margins of 4% and 6%, respectively.
3. The Van Vlymen Entities submit that any and all of the interest claims that succeed (contrary to their election and penalty arguments) should be reduced having regard to the amounts that have been received by Mr Wong (see Table Two above).

Items 2 & 4 - Interest on the 2016 Total Van Vlymen Consideration

1. The Wong Entities claim simple interest in USD on the non-payment of the USD1.75m and SBD 15m sums under s 100 of the CPA from the last date for payment under the Settlement Agreement (24 May 2015) up to 9 July 2016, and under s 101 of the CPA from 9 July 2016 to date and continuing (the USD1.75m and SBD15m sums having been ordered to be paid by 9 July 2016 by orders dated 17 June 2016).
2. The Van Vlymen Entities raise six arguments against these claims for interest to which the Wong Entities respond. These include the election argument and the penalty argument (with respect to interest on this sum up to 28 February 2017). Thirdly, they submit that cl 10.2(d)(iv) of the Deed is void for uncertainty (no rate and no machinery or criteria to establish it: Perpetual Nominees Ltd v Parist Holdings Pty Ltd [2005] NSWSC 1345 at [26]-[38]), or, if it is not void, they submit that "seek to recover" did not in itself confer any right to interest on the Wong Entities. The Wong Entities submit that, given the heavily litigious setting and the characterisation of the USD1.75m as a liquidated debt under the Deed, the reference to interest should be construed as a reference to court rates of interest.
3. Fourthly, the Van Vlymen Entities submit that the Wong Entities have sought to contrive a basis for an award of interest under s 100 by making very recent claims for the USD1.75m and SBD15m amounts in the Second Further Amended Statement of Claim and Summons. They submit that those claims had no utility as the Wong Entities have been taking enforcement action for years and the Van Vlymen Entities had already acknowledged an obligation to pay the principal sums in their Notice of Motion dated 26 March 2020. They submit that the Wong Entities do not have a continuing cause of action which they are able to pursue for the amounts (Lahoud at [30]-[31]).Therefore, they submit that those claims have no proper foundation or should not result in a favourable exercise of discretion under s 100. In response, the Wong Entities submit that a claim under s 100 was included in the original Statement of Claim on the USD250,000 then due, and that the Statement of Claim was amended to claim the USD1.75m and interest as soon as that liability arose.
4. Fifthly, the Van Vlymen Entities submit that the "reservation" as to interest and damages (see past relevant orders) was displaced by the subsequent election and was not intended to encompass any claim for interest and damages that may be propounded in the future. In response, the Wong Entities submit that the Court's reservation of the matter cannot be displaced by action of any party, that the reservation expressly contemplated a claim for interest and damages in the future, and that a cause of action arising on the later Deed could not be inhibited by prior orders.
5. Sixthly, the Van Vlymen Entities submit that any award of interest should take into account the significant benefits that have accrued to the Wong Entities in respect of the subject shares they have retained. They submit that the Wong Entities have not discharged their onus in proving loss of use of money and the extent of it.
6. In response, the Wong Entities submit that the dividends were declared and paid long after default under the Deed. They further submit that their contractual or statutory entitlement to interest on the liquidated debts under the Deed is independent of any benefit received from delay in completing the Settlement Agreement. They say both parties benefitted equally and there is no evidence that the benefit to Mr Wong exceeded the value of his exertions in seeking to restore the viability of the joint venture vehicles. Finally, they submit that Mr Van Vlymen's liability to pay interest on the purchase price from the date it fell due in 2015 or was ordered to be paid is clear given that he was effectively in control of the companies to the exclusion of Mr Wong until around March 2017 (see Commonwealth of Australia v SCI Operations Pty Ltd (1998) 192 CLR 285 at [75]; Hutchinson v Payne (1975) VR 175 at 179).

Item 5 - Interest on the non-refundable deposit of USD250,000

1. The Van Vlymen Entities raise five arguments against this claim for interest. First, they submit that neither cl 10.2(d)(iv) nor any other contractual provision extends to interest on the non-refundable deposit of USD250,000. The Wong Entities submit that liability to pay interest on the Van Vlymen Entities' delay in paying this amount is acknowledged in cl 8(c)(iv).
2. Secondly, the Van Vlymen Entities submit that s 100 of the CPA is irrelevant because no claim was ever made for these moneys and, accordingly, jurisdiction under that provision has not been invoked. The Wong Entities submit that interest on the amount was claimed under s 100 in the original Statement of Claim and in the Amended Statement of Claim, and under s 101 in the Second Further Amended Statement of Claim. They say that interest is payable under s 100 from the due date (24 January 2015) to the date it was ordered to be paid (9 March 2016), and under s 101 thereafter until it was paid on 26 August 2016.
3. Thirdly, the Van Vlymen Entities submit that, given that the deposit was paid on 26 August 2016, all interest on that sum is the subject of the release in cl 8(c)(iv). They raise the penalty argument to the extent that the clause provides otherwise. They Wong Entities deny this.
4. Fourthly and fifthly, the Van Vlymen Entities say that the arguments summarised in paragraphs [57] (re the "reservation") and [58] (re the Wong Entities' alleged failure to discharge their onus of proving any loss of use of money) apply equally to this Item. The Wong Entities make the same responses.

Item 8 - Interest on the 2016 Settlement Payment (AUD1.4m)

1. The Van Vlymen Entities submit that all of the arguments they raise in relation to Items 2 and 4 except for the penalty point also apply in relation to this Item. They acknowledge that their election argument is not as strong here because the sum of AUD1.4m was not part of the orders for specific performance. However, they submit that the November 2016 Deed was intended to operate as a variation of the Settlement Agreement and as a mechanism for enforcing the orders for specific performance and so the same reasoning applies.
2. The Wong Entities submit that the Van Vlymen Entities improperly construe one of the stated objects of the Deed. They acknowledge that nothing in the Deed varies or derogates from the Settlement Agreement or any order of the Court (cl 12.1(a)(ii) &(iv) of the Deed). They submit that the liability to pay the AUD1.4m and interest upon it is independent of the Settlement Agreement and orders, and that interest should be calculated on the net liability of AUD1.28m from 1 March 2017.

Items 10 & 14 - Interest on Worrells'/EMC's fees and disbursements and costs from 1 March 2017

1. The Van Vlymen Entities accept that jurisdiction to order interest on these amounts pursuant to s 100 of the CPA is properly invoked. They submit that the award of interest should be on the sum of AUD9,350 because that is the amount that was paid personally by Mr Wong. They also submit that interest should run from the date of payment by Mr Wong (18 May 2017).
2. The Wong Entities accept that interest is only payable on that amount. They further submit that interest should run until the equivalent amount was paid to Mr Wong from Van Vlymen assets or to date credited against notional interest on payments made against liabilities on the gross basis agreed for dealing with the offsetting of liabilities against payments.

Items 12 & 16 - Interest on Worrells'/EMC's fees and disbursements up to 28 February 2017

1. The Van Vlymen Entities submit that there is no claim for interest because any claims in respect of the principal sums have been released. However, if the penalty argument is rejected, the parties agree that interest should be paid on the AUD70,000 actually paid by Mr Wong. They say that interest should be payable from 14 November 2016 (as to the first AUD35,000 paid by Mr Wong) and 24 November 2016 (as to the further AUD35,000 paid by Mr Wong).

Item 18 - Interest on Birchall legal fees and disbursements since 1 March 2017

1. The Van Vlymen Entities submit that for proceedings commenced prior to 25 November 2015, s 101(4) of the CPA made interest on costs discretionary and s 101(5) provided that interest was to be calculated 'from (a) the date or dates on which the costs concerned were paid, or (b) such later date as the court may order.' They submit that the proceedings on the Second Amended Statement of Claim were commenced well before that date, the fresh Summons not altering that position, and therefore, that any interest ordered should only take effect from the respective dates of payment by the Wong Entities to Birchall Legal.
2. The Wong Entities submit that the pleading of new causes of action arising after commencement of the proceedings on the November 2016 Deed (in 2017) in the Second Further Amended Statement of Claim deems the date of commencement of the proceedings upon those causes of action to be the date of amendment (s 64(3) of the CPA). They say that, consequently, the non-discretionary regime applies. However, they agree that interest and costs should take effect from the respective dates of payment.

Items 20, 22 and 24 - Interest on Birchall legal fees and disbursements up to 28 February

1. The Van Vlymen Entities submit that interest is not payable because the principal amounts are not payable (being penalties). In the event that the penalty argument is wrong, the parties agree that any interest should only take effect from the respective dates of payment of these costs and disbursements by the Wong Entities.

Choice of currency for the payment of SBD15m

1. The Wong Entities submit that they are entitled to determine the "manner" (distinct from the "method" and in addition to time and place) of payment under cl 6 of the Deed, which includes the choice of currency (see cl 6.4 of the Deed, including the heading of that clause).
2. The Van Vlymen Entities submit that they may elect whether the payment is made in USD or AUD on the basis that cl 6.3 of the Deed is expressed in terms of an obligation imposed on the Van Vlymens, which will be satisfied if they make the payment in either currency. The Van Vlymen Entities further submit that "manner" is referable to "how things are done", such as whether payment is made by EFT, bank cheque or in some other way, noting that cl 6.4 concludes by stating that "payment by way of personal cheque is not reasonably acceptable to Mr Wong".

"Westpac Inward TT exchange rate"

1. The Wong Entities submit that "Westpac TT Inward exchange rate" in cl 6.3(b) of the Deed means "the rate known by the parties as the 'Westpac TT Inward exchange rate' published previously by Westpac in Honiara and subsequently by the successor of the joint venture's bankers in Honiara, 'Bank South Pacific'" (Plaintiff's written submissions dated 28 May 2020).
2. The Wong Entities submit that cl 6.3(b) does not contemplate a physical exchange but a method of calculation. They submit that one can glean a number of characteristics of the formula from the text of the clause. First, "inward" means the buy rate from the bank's point of view. Secondly, the formula must refer to a single standard rate. Thirdly, the rate must be one for the conversion of Solomon Island dollars into either USD or AUD, which points to the rate being published in the Solomon Islands. Finally, the rate must be a daily rate.
3. The Wong Entities also refer to the evidence of Mr Wong, Mr Birchall and Mr Keleher (see below). In particular, they submit that the only banking operation shown to have used the term "Inward TT rate" is that which was known as "Westpac" in Honiara. This appears on the examples of its exchange rate sheets Mr Wong says he and Mr Van Vlymen used regularly. They further submit that Westpac in Australia has never quoted such a single standard rate.
4. The Wong Entities submit that if they are wrong about the proper construction of cl 6.3(b), the clause ought to be rectified to substitute "Bank South Pacific" for "Westpac" given the parties' subjective intentions at the time the Deed was entered (see Mr Wong's evidence below).
5. The Van Vlymen Entities submit that there is no basis on any recognised principle of construction for reading "Westpac" to mean anything other than a relevant branch of Westpac offering the relevant "TT inward" (or "Buy") rate whereby the bank will pay out USD or AUD and buy in SBD. They say that would not be a bank in the Solomon Islands because it would be using the "Sell" rate to do that.
6. With respect to the rectification argument, the Van Vlymen Entities submit that there is no evidence as to what Mr Wong and Mr Van Vlymen's actual subjective intentions were (Ryledar v Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603 at [267] per Campbell JA).

Date for calculation of exchange rate

1. The Wong Entities submit that the exchange rate is to be calculated by reference to the 5 banking days prior to 28 February 2017. That is the date when the Van Vlymen Entities were bound to settle and pay the equivalent of the SBD15m (cl 11 of the Deed). The Wong Entities submit that the use of any later date would enable the Van Vlymen Entities to take advantage of their own wrong doing, contrary to TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130, 147 [B] and [C].
2. The Van Vlymen Entities submit that the rate is to be calculated on the basis of the average rate quoted by Westpac in the 5 banking days immediately prior to settlement. They say that a 2020 rate focuses on the payment of a sum of money which will achieve specific performance (which is the only relevant matter for present purposes), while a 2017 rate focuses on what should have happened, but did not happen, under the original order for specific performance (which is relevant only to questions of damages, which the Wong Entities have elected to eshew). The Wong Entities submit that there is no contractual construction available to support this claim.

Construction

1. The principles to be applied in determining the rights and liabilities of parties under a contract were explained by French CJ, Nettle and Gordon JJ in Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (S99/2015; S102/2015) (2015) 256 CLR 104 ('Mount Bruce Mining') at [46]-[52]: [46] The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose. [47] In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That enquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract. [48] Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning. [49] However, sometimes, recourse to events, circumstances and things external to the contract is necessary. It may be necessary in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding "of the genesis of the transaction, the background, the context [and] the market in which the parties are operating". It may be necessary in determining the proper construction where there is a constructional choice. The question whether events, circumstances and things external to the contract may be resorted to, in order to identify the existence of a constructional choice, does not arise in these appeals. [50] Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties' statements and actions reflecting their actual intentions and expectations. [51] Other principles are relevant in the construction of commercial contracts. Unless a contrary intention is indicated in the contract, a court is entitled to approach the task of giving a commercial contract an interpretation on the assumption "that the parties ... intended to produce a commercial result". Put another way, a commercial contract should be construed so as to avoid it "making commercial nonsense or working commercial inconvenience". [52] These observations are not intended to state any departure from the law as set out in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales and Electricity Generation Corporation v Woodside Energy Ltd. We agree with the observations of Kiefel and Keane JJ with respect to Western Export Services Incv Jireh International Pty Ltd." (citations omitted)

Merger & Election

1. As noted above, the Van Vlymen Entities rely on Lahoud at [30]-[31] in support of their 'merger argument', and Despot at [117]-[118] and [123] in support of their subsequent 'election argument'.
2. Mr Leopold SC, counsel for the Van Vlymen Entities, also referred to Georges v Wieland [2010] NSWSC 1387 (see above). In that case, Brereton J (as his Honour then was) said (at 25]): … it is a general principle concerning orders for specific performance that once such an order has been made, the contractual rights of the parties are not superseded but their future exercise is under the control of the court, so that the working out of the order for specific performance is under the court's control [see Singh (Sudagar) v Nazeer [1979] Ch 474, 481-2; Buckman v Rose (1980) 1 BPR 9558; Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245, 259-60] …
3. In Lahoud at [30]-[31], Handley AJA said (emphasis added): The repudiation and continuing breaches by the Joseph Lahoud interests gave rise to an equitable cause of action for specific performance and damages, and a common law cause of action for damages. The House of Lords held in The Indian Grace [1993] AC 410 that where the same facts give rise to more than one breach of the same contract there is only one cause of action. Although there were new breaches and new causes of action every day until final orders were made on 31 July 2009 damages for all of those breaches could have been recovered in the specific performance proceedings. The case is therefore within the Henderson principles and the claim is barred by a cause of action estoppel. It is also barred by its merger in the 31 July 2009 judgment. All remedies and all relief must be claimed in the first action because the cause of action will no longer be available after it merges in the judgment and is extinguished.
4. However, as Mr Jackman SC, counsel for the Wong Entities, pointed out, Lahoud concerned the abandonment by one party of a particular course of action during the course of a hearing. It did not concern circumstances where as in this case damages were sought alternatively or in addition to orders for specific performance and where the Court reserved further consideration of the matter and liberty to apply. As Handley AJA acknowledged: [2] On 22 December the Victor Lahoud interests applied by notice of motion under UCPR Pt 36 r 36.16(3A) to add to those orders an order remitting to Ward J their "claim" for damages for breach of the Deed of Settlement of 5 February 2007 (the Deed). … [10] On 11 July 2007 the Victor Lahoud interests commenced proceedings for specific performance of the provisions of the Deed which provided for the audit. [11] Prayers 1 and 2 in the statement of claim sought declarations and orders for specific performance. Prayer 3 sought in the alternative damages for breach of the Deed. Further or other orders were sought in prayer 8. Although the claim to damages was framed in the alternative the Victor Lahoud interests were not required to elect and damages could have been claimed and awarded in addition to specific performance. … [14] Thus the claim which the Victor Lahoud interests now seek to have remitted to Ward J was covered by the claim for damages in the statement of claim. However, as Ward J recorded [2009] NSWSC 623 [303] during the hearing the questions for determination in those proceedings were narrowed by agreement to three, and [452] declarations and orders were made in accordance with her answers to those questions. The claim for damages was abandoned when that agreement was made, or when the case went to judgment without other issues being introduced by amendment. … [17] The notice of cross appeal by the Victor Lahoud interests did not include any claim for damages, and no such claim was advanced during the hearing before this Court. [18] On 21 July 2009, when Ward J made declarations and ordered specific performance she would have had power, if the claim for damages had been pressed, to order an enquiry as to damages. [19] Section 68(b) of the Supreme Court Act, the current embodiment in this State of Lord Cairns Act, enables the Supreme Court, when ordering specific performance, to "award damages to the party injured ... in addition to ... specific performance." … [25] The notice of motion would require the trial which took place before Ward J in April 2009 to be reopened. If the claim for damages in the nature of interest is truly a new cause of action the Victor Lahoud interests would need leave to amend their statement of claim. If, as I have concluded, no amendment is required the motion seeks to revive a pleaded claim which was abandoned at the trial.
5. In Despot at [117]-[118], Gleeson JA said (emphasis added): In Tang Man Sit v Capacious Investments Ltd at 521-522, Lord Nicholls explained why the finality of some orders is qualified by the principles of election, such as when an order for specific performance fails to be realised: In the ordinary course the decision made when judgment is entered is made once and for all. That is the normal rule. The order is a final order, and the interests of the parties and the public interest alike dictate that there should be finality. The principle, however, is not rigid and unbending. Like all procedural principles, the established principles regarding election between alternative remedies are not fixed and unyielding rules. These principles are the means to an end, not the end in themselves. They are no more than practical applications of a general and overriding principle governing the conduct of legal proceedings, namely, that proceedings should be conducted in a manner which strikes a fair and reasonable balance between the interests of the parties, having proper regard also to the wider public interest in the conduct of court proceedings. Thus in Johnson v. Agnew [1980] A.C. 367 the House of Lords held that when specific performance fails to be realised, an order for specific performance may subsequently be discharged and an inquiry as to damages ordered. Lord Wilberforce observed, at p. 398: "Election, though the subject of much learning and refinement, is in the end a doctrine based on simple considerations of common sense and equity." It can be seen that the election described in Johnson v Agnew and Sunbird Plaza is an election which arises after an order for specific performance has been made but is not complied with. Contrary to Mr Despot's contentions, when an order for specific performance is not complied with, the election to be made by a vendor (to apply to the court to either enforce the order, or to vacate the order) does not depend upon that party first having established an entitlement to be restored as registered proprietor. The election depends on establishing that the order for specific performance has failed to be realised.
6. The Van Vlymen Entities further rely on Despot at [123] in support of the proposition that the election arises from the moment that the order for specific performance is not complied with. There, Gleeson JA stated: Just as a vendor cannot both retain the property in the land and enforce payment of the purchase price, those remedies being mutually exclusive: (Capital Properties v Swycher [1976] Ch 319 at 327), Mr Despot as vendor of the property cannot both enforce the specific performance order (by varying the condition as to payment in order 8 and obtaining judgment against Stelli in the 2013 appeal for the unpaid purchase price) and later seek to be restored as registered proprietor of the property (by applying to set aside the order for specific performance, on the ground of Stelli's failure to observe the condition as to payment in order 8).
7. However, Gleeson JA also said (at [109]-[116]): [109] The distinction between alternate rights and remedies and its consequences has been described as "fundamental": Ciavarella v Balmer [1983] HCA 26; 153 CLR 438 at 449. It is well established that in a situation of inconsistent remedies to enforce a right, no question of election arises until one or other claim has been pursued until judgment: United Australia Ltd v Barclays Bank Ltd [1941] AC 1 at 30; Baxter v Obacelo Pty Ltd [2001] HCA 66; 205 CLR 635 at [39]. [110] At the heart of election is the idea of confrontation which in turn produces the necessity of making a choice: Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) [1993] HCA 27; 182 CLR 26 at 42. [111] As Lord Nicholls explained in Tang Man Sit v Capacious Investments Ltd [1996] AC 514 at 521D-E, "[f]aced with alternative and inconsistent remedies a plaintiff must choose, or elect, between them. He cannot have both. The basic principle governing when a plaintiff must make his choice is simple and clear. He is required to choose when, but not before, judgment is given in his favour and the judge is asked to make orders against the defendant". [112] It is well established, however, that the contractual rights of the parties do not merge in the decree for specific performance: JAG Investment at 603E (Hope JA); Buckman v Rose at 9559 (McLelland J); Johnson v Agnew at 393G (Lord Wilberforce). As Sir Wilfrid Greene MR said in Austins of East Ham Ltd v Macey at 341, "[a]n order for specific performance does not get rid of the contract. The contract is not merged in the order, but it is treated, and always has been treated by the court of equity, as still subsisting". [113] It has been said that if a party fails to comply with the order for specific performance, the other party may choose to proceed to enforcement of the order for specific performance, or instead of doing that, can elect to ask the Court to set aside the order for specific performance and put an end to the contract: Austins of East Ham Ltd v Macey [1941] Ch 388 at 341. The later reference to the court putting an end to the contract is now more accurately understood as a step taken by the party to the contract, the role of the court being limited to vacating the order for specific performance: see Sunbird Plaza at 260. … [115] Lord Wilberforce explained the basis of this election in Johnson v Agnew at 394B-C as follows: … if the order for specific performance is not complied with by the purchaser, the vendor may either apply to the court for enforcement of the order, or may apply to the court to dissolve the order and ask the court to put an end to the contract. This proposition is as stated in Austins of East Ham Ltd. v. Macey [1941] Ch. 338 (and see Singh (Sudagar) v. Nazeer [1979] Ch. 474 , 480, per Megarry V.-C.) and is in my opinion undoubted law, both on principle and authority. It follows, indeed, automatically from the facts that the contract remains in force after the order for specific performance and that the purchaser has committed a breach of it of a repudiatory character which he has not remedied, or as Megarry V.-C. puts it [1979] Ch. 474, 480, 790, that he is refusing to complete. [116] This passage of Lord Wilberforce's speech in Johnson v Agnew was approved by the High Court in Sunbird Plaza at 264.

Penalty

1. The law of penalties has been summarised by the High Court as follows: The law of penalties, in its standard application, is attracted where a contract stipulates that on breach the contract-breaker will pay an agreed sum which exceeds what can be regarded as a genuine pre-estimate of the damage likely to be caused by the breach.
2. (Ringrow Pty Ltd v BP Australia Pty Ltd (2005) 244 CLR 656, 662 [10] ('Ringrow'))
3. As the Court observed in Andrews v ANZ Banking Group Ltd (2012) 247 CLR 205, 216 [9] ('Andrews') (citing Legione v Hateley (1983) 152 CLR 406, 445): A penalty is in the nature of a punishment for non-observance of contractual stipulation and consists, upon breach, of the imposition of an additional or different liability.
4. The Court also observed (at 216-217 [10]-[11]) that: [in] general terms, the stipulation prima facie imposes a penalty on a party (the first party) if, as a matter of substance, it is collateral (or accessory) to a primary stipulation in favour of a second party and this collateral stipulation, upon the failure of a primary stipulation, imposes on the first party an additional detriment, the penalty, to the benefit of the second party. In that sense, the collateral or accessory stipulation is described as being in the nature of a security for and in terrorem of the satisfaction of the primary stipulation. If compensation can be made to the second party for the prejudice suffered by failure of the primary stipulation, the collateral stipulation and the penalty are enforced only to the extent of that compensation. The first party is relieved to that degree from the liability to satisfy the collateral stipulation.
5. However, this concept is to be tempered by the notion that what the court is inclined to prevent is a payee receiving advantages "significantly greater than the advantages which would flow from a genuine pre-estimate of damage" (Ringrow, 667 [27]).
6. But a court will not "rewrite a contract imprudently made, but to relieve against provisions which are so unconscionable or oppressive that their nature is penal rather than compensatory" (see Ringrow, 668 [27], quoting AMEV-UDC Finance Ltd v Austin (1986) 162 CLR 170, 193-194 per Mason and Wilson JJ).
7. That is against the backdrop that "[t]he law of contract normally upholds the freedom of the parties, with no relevant disability, to agree upon the terms of their future relationships" (Ringrow, 669 [31]). It has been said that the penalty should be capable of being characterised as "'extravagant and unconscionable in amount'. It is not enough that it should that it should be lacking in proportion. It must be 'out of all proportion'" (Ringrow, 669 [32]).
8. This was reiterated by the High Court in Paciocco v ANZ Banking Group Ltd (2016) 258 CLR 525 ('Paciocco') where Kiefel J (French CJ agreeing) said (at 547 [29]): The question which may be identified as arising from this aspect of the decision in Dunlop, which is appropriate to a case of this kind, is whether a provision for the payment of a sum of money on default is out of all proportion to the interests of the party which it is the purpose of the provision to protect.
9. However, her Honour also clarified that "[t]his interest may be of a business or financial nature" (also at 547 [29]). Keane J acknowledged the relevance of parties' "legitimate commercial interests" (at 607 [256] and 616 [283]) and the "commercial context" (at 613 [272]) to the "out of all proportion test". Gageler J focused on "whether the stipulation in issue is properly characterised as having no purpose other than to punish", having regard to the "commercial circumstances within which the parties entered into the contract containing the stipulation" (see 581 [166]).
10. There are two further qualifications that should be noted. First, in Andrews, the Court said (at 217 [11]): It has been established at least since the decision of Lord Macclesfield in Peachy v Duke of Somerset that the penalty doctrine is not engaged if the prejudice or damage to the interests of the second party by the failure of the primary stipulation is insusceptible of evaluation and assessment in money terms. It is the availability of compensation which generates the "equity" upon which the court intervenes; without it the parties are left to their legal rights and obligations. The point is illustrated by Waterside Workers' Federation of Australia v Stewart (35). A bond was given by the appellant in the sum of £500 on condition that it pay £50 if and so often as its members in combination should go on strike. Isaacs and Rich JJ (36) emphasised that, whilst refusal to work almost inevitably would cause loss to employers, "no one can ever tell how much loss is sustained by not doing business" and on the principle stated by Lord Macclesfield no relief was to be given against payment of the £50.
11. In Paciocco, Kiefel J (French CJ agreeing) said (at 545 [23], citing Peachy v Duke of Somerset (1721) 1 Str 447 at 453 [93 ER 626 at 630]): The consequence of compensation forming the basis of equitable intervention was that where compensation was not possible, or damages could not be assessed, relief could not be given by equity.
12. Although, with respect to cases in which damage is "difficult" rather than "impossible" to estimate, her Honour noted (at 552 [49]-[50]): It was not suggested in either Clydebank or Dunlop that the damage … was impossible to estimate; rather it appears that the damage was capable of estimation, albeit with little precision… What was said in Dunlop, and in Clydebank, about it being reasonable, in cases of difficulty in the estimation of possible loss, to leave the parties to contract for themselves for a sum to be paid on default might be thought to come close to an acceptance that they be left to their bargain. However, this would overlook the fact that the courts in those cases went on to determine whether the figure arrived at was a penalty and that they did so by considering whether it was unconscionable or extravagant in amount.
13. Keane J said (at 595 [221], citing Waterside Workers' Federation of Australia v Stewart (1919) 27 CLR 119, 132, 128-129 and Andrews at [11]): Only in cases where gross disproportion is such as to point to a predominant punitive purpose have agreed payments payable on breach of contract been struck down as penalties. Thus, for example, where that purpose is not discernible because the evaluation and assessment of the loss covered by the agreed payment is "very expensive and very difficult … to calculate precisely", the penalty rule has been held to have no application.
14. Secondly, in Auzcare the Court of Appeal noted (at [21]): The law of penalties draws an important difference between a forbearance in relation to an existing debt, and promises whose effect is to compel performance.
15. The Court quoted with approval (at [22]) the comment of Gibbs CJ in O'Dea, 367, that penalties are not to be found where: there is a present debt, which, by reason of an indulgence given by the creditor, is payable either in the future, or in a lesser amount, provided that certain conditions are met. The failure of the conditions does not mean that the creditor becomes entitled to damages; the consequence is that the sum which was always owed, but which the debtor was allowed to pay by instalments or in a smaller amount, becomes recoverable at once or in full.
16. (See further Acron Pacific Ltd v Offshore Oil NL (1985) 157 CLR 514 and the authorities cited at [24] in Auzcare).

Lump sum or gross sum cost orders

1. I have set out the relevant principles concerning lump sum or gross sum cost orders in several past decisions (see, e.g., Edward Ted Lakis and Anor v Michael Victor Lardis and Anor (No 3) [2018] NSWSC 1296 at [52]-[58]; Lawcover Insurance Pty Ltd v Muriniti and Newell [2018] NSWSC 558 at [6]-[10]).
2. Relevantly, s 98(4)(c) of the CPA permits the Court to order payment of costs in a specified lump sum instead of assessed costs. The discretion is wide and the order may be made whenever the circumstances warrant it (Harrison v Schipp (2002) 54 NSWLR 738 at [21] per Giles JA ('Harrison v Schipp'); Hamod v The State of New South Wales [2011] NSWCA 375 at [813] per Beazley JA (as her Honour was then known) ('Hamod')).
3. With respect to determining the gross sum, the Court is to take a broad-brush approach. In Harrison v Schipp, Giles JA said: [22] Of its nature, specification of a gross sum is not the result of a process of taxation or assessment of costs. As was said in Beach Petroleum NL v Johnson at 124, the gross sum "can only be fixed broadly having regard to the information before the Court"; in Hadid v Lenfest Communications Inc at [35] it was said that the evidence enabled fixing a gross sum "only if I apply a much broader brush than would be applied on taxation, but that … is what the rule contemplates". The approach taken to estimate costs must be logical, fair and reasonable (Beach Petroleum NL v Johnson at 123; Hadid v Lenfest Communications Inc at [27]). 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 (Wentworth v Wentworth (CA, 21 February 1996, unreported, per Clarke JA). … [33] In my opinion, if on the broad-brush approach an amount of the order of 75 per cent of counsels' fees is a fair and reasonable estimation of the costs payable in respect of counsels' fees, the power conferred by Pt 52A, r 6(2)(c) should be exercised.
4. In Hamod, Beazley JA pointed out that the costs ordered should be based on an informed assessment of the actual costs having regard to the information before the Court. The approach to be taken in arriving at the estimate must be logical, fair and reasonable. However, the exercise will necessarily be impressionistic and may involve a "discount of the costs actually incurred or estimated, in order to take into account the contingencies that would be relevant in any formal costs assessment" (at [820]).
5. Experience, I think, has shown that a discount of 10-30% is typically appropriate (see Ross v Padget [2016] NSWSC 1851 at [16] and [21]; Fisher-Pollard by her tutor Fisher-Pollard v Fisher-Pollard [2018] NSWSC 807). Stevenson J adopted this approach in Berry Rural (at [6]).
6. Some of the costs in this case are said to be payable on an indemnity or solicitor-client basis while others are said to be payable on a party-party basis. In Berry Rural, after having regard to the particular evidence before him, Stevenson J held (at [16]-[17]): Some discount from that figure is required to reflect the fact that, were Sepak's costs to be assessed on an indemnity basis, a figure less than the actual costs rendered is likely to result. There is evidence of a court appointed costs assessor, Ms Kerrie Rosati, who opined that "a typical recovery in an indemnity basis is in the vicinity of 90 per cent of total costs incurred". A further discount for "contingencies" should also be applied to recognise the possibility that, despite the care that Mr Hemswoth has undertaken in his analyses, some costs are to have been included that do not directly relate to the preparation of the 3 October 2018 affidavits.
7. Mr Leopold SC also referred to a number of decisions which he said reflected a pattern in the authorities of around 70-75% recoverability of total solicitors' costs and counsels' fees payable on a party-party basis: Global Medical Solutions Australia Pty Ltd v Axiom Molecular Pty Ltd [2013] NSWSC 1433 at [96]-[103]; Smith v Australian Executor Trustees Ltd (No 4) [2018] NSWSC 1584 at [32]; and ASIL Foundation (Lending) Pty Ltd v Langridge [2019] NSWSC 1574 at [43]-[44] . Mr Jackman SC and Mr Burchett questioned the relevance of the cited paragraphs. Ultimately, within the broad brush approach, and absent any expert evidence, I must have regard to the particular evidence in the case and my own experience.

Interest

1. Sections 100 and 101 of the CPA currently provide: 100 Interest up to judgment (1) In proceedings for the recovery of money (including any debt or damages or the value of any goods), the court may include interest in the amount for which judgment is given, the interest to be calculated at such rate as the court thinks fit - (a) on the whole or any part of the money, and (b) for the whole or any part of the period from the time the cause of action arose until the time the judgment takes effect. (2) In proceedings for the recovery of a debt or damages in which payment of the whole or a part of the debt or damages has been made after the proceedings commenced but before, or without, judgment being given, the court may include interest in the amount for which judgment is given, the interest to be calculated at such rate as the court thinks fit - (a) on the whole or any part of the money paid, and (b) for the whole or any part of the period from the time the cause of action arose until the time the money was paid. (3) This section - (a) does not authorise the giving of interest on any interest awarded under this section, and (b) does not authorise the giving of interest on a debt in respect of any period for which interest is payable as of right, whether by virtue of an agreement or otherwise, and (c) does not authorise the giving of interest in any proceedings for the recovery of money in which the amount claimed is less than such amount as may be prescribed by the uniform rules, and (d) does not affect the damages recoverable for the dishonour of a bill of exchange. (4) In any proceedings for damages, the court may not order the payment of interest under this section in respect of the period from when an appropriate settlement sum was offered (or first offered) by the defendant unless the special circumstances of the case warrant the making of such an order. (5) For the purposes of subsection (4), appropriate settlement sum means a sum offered in settlement of proceedings in which the amount for which judgment is given (including interest accrued up to and including the date of the offer) does not exceed the sum offered by more than 10 per cent. 101 Interest after judgment (1) Unless the court orders otherwise, interest is payable on so much of the amount of a judgment (exclusive of any order for costs) as is from time to time unpaid. (2) Interest under subsection (1) is to be calculated, at the prescribed rate or at such other rate as the court may order, as from - (a) the date on which the judgment takes effect, or (b) such later date as the court may order. (3) Despite subsection (1), interest is not payable on the amount of a judgment if the amount is paid in full within 28 days after the date on which the judgment takes effect, unless the court orders to the contrary. (4) Unless the court orders otherwise, interest is payable on an amount payable under an order for the payment of costs. (5) Interest on an amount payable under an order for the payment of costs is to be calculated, at the prescribed rate or at any other rate that the court orders, as from the date the order was made or any other date that the court orders. (6) This section does not authorise the giving of interest on any interest payable under this section. (7) In this section, a reference to the prescribed rate of interest is a reference to the rate of interest prescribed by the uniform rules for the purposes of this section. Note. See section 136 in relation to the order in which payments on account of a judgment debt are to be appropriated.
2. As Mr Leopold SC pointed out, an earlier version of ss 101(4)-(5) applies to proceedings commenced prior to 25 November 2015 (see item 6 of Schedule 1.2 of the Courts and Other Justice Portfolio Legislation Amendment Act 2015 (NSW) - reflected in clause 21 of Schedule 6 to the CPA): (4) The court may order that interest is to be paid on any amount payable under an order for the payment of costs. (5) Interest under subsection (4) is to be calculated, at the prescribed rate or at such other rate as the court may order, as from: (a) the date or dates on which the costs concerned were paid, or (b) such later date as the court may order.
3. The purpose of the discretionary power to award interest under s 100 is to permit a successful party to be properly compensated for loss suffered (see Ritchie's Uniform Civil Procedure NSW [s 100.10] and the cases cited there, e.g., Haines v Bendall (1991) 172 CLR 60, 66, 72). Similarly, the "ordinary position" that, absent a contrary order, interest accrues on any amount payable under a judgment or order for costs, also reflects a compensatory purpose (see Ritchie's Uniform Civil Procedure NSW [s 101.10]; Doppstadt Australia Pty Ltd v Lovick and Son Developments Pty ltd (No 2) [2014] NSWCA 158 at [403]; see also McKeith v Royal Bank of Scotland Group PLC [2016] NSWCA 260 at [52]-[60] where the previous s 101(4)-(5) is discussed).
4. Relevantly with respect to the monies due under the Settlement Agreement and orders for specific performance, in Commonwealth of Australia v SCI Operations Pty Ltd (1998) 192 CLR 285 McHugh and Gummow JJ said (at [75]): … a party seeking equitable relief may be obliged to do equity by the payment or repayment of moneys with interest [footnote: See, for example, the orders in Nelson v Nelson (1995) 184 CLR 538 at 618-619; Maguire v Makaronis (1997) 188 CLR 449 at 500]. A purchaser who, after the date fixed for completion, seeks specific performance will be treated in equity as having been in possession from the completion date and, in general, will be required to offer the vendor interest on the purchase price from that date [footnote: Esdaile v Stephenson (1822) 1 Sim & St 122 at 123 [57 ER 49 at 50]; Harvela Ltd v Royal Trust Co [1986] AC 207 at 236-237. See also Davis, "Interest as Compensation" in Finn (ed), Essays on Damages, (1992) 129 at 138-139]."
5. As the Wong Entities suggest, that position is likely to be stronger if a purchaser has actually had possession during the period of delay, as in this case (see Hutchinson v Payne (1975) VR 175, 179).

Mr Sydney Birchall

1. The Wong Entities rely upon five affidavits affirmed by their solicitor, Mr Birchall, on 3 April 2020 (with exhibit SCB1), 9 April 2020 (with annexures), 23 April 2020 (with exhibit SCB2), 19 May 2020 (with exhibit SCB3-7) and 25 May 2020 (with annexures), and to the extent referred to in those affidavits, a further affidavit affirmed by Mr Birchall on 29 December 2017 (with exhibits SCB13, 15 and 18).
2. In his 23 April 2020 affidavit, Mr Birchall outlined the past relevant pleadings and submissions of the Wong Entities (as well as the past relevant orders extracted above). He deposed that: In the Plaintiffs' submissions dated 8 March 2016 as to the orders that should be made following judgment, counsel for the Plaintiffs said: There remains the prospect of further or alternative relief being required, dependent upon how, when or if the Defendants perform the Contract or Settlement Agreement, including as to damages and/or interest (the claim for which has been deferred). This is especially appropriate where the Court anticipates a degree of supervision of the performance of a contract, as here.
3. With respect to enforcement action taken after 28 February 2017, Mr Birchall stated that on 17 March 2017, I noted under consent short minutes of order the appointment of Mr Darin as the receiver and manager over the three corporate defendants, empowering Mr Darin to "liquidate the joint venture assets". The orders were exhibited in SCB-4, although Mr Birchall stated that those orders "erroneously recorded that the Court 'ordered' the matters noted … which might be taken to erroneously suggest that Mr Darin was appointed by the Court". Other relevant orders and notations (also exhibited in SCB-4 and SCB-5) included: Date Justice Order/Notation THE COURT NOTES: 1. That on 16 February 2017 Eclipse Prudent Mortgage Corporation Limited obtained orders for possession of: 17/3/17 Sackar J a. The land comprising Certificate of title Folio Identifier 9/28908, being the land situated at and known as 50 Minkara Road, Bayview in the State of New South Wales; and b. The land comprising Certificate of Title Folio Identifier 2/239975, being the land situated at and known as 232 Greta Road, Kulnura in the State of New South Wales. 2. That Eclipse Prudent Mortgage Corporation Limited has consented to the Plaintiff proceeding with the sale of the land comprising Certificate of Title Folio Identifier 2/239975, being the land situated at and known as 232 Greta Road, Kulnura in the State of New South Wales so long as its priority as first mortgagee is preserved. Order that: 1. The Respondents [Mr and Mrs Van Vlymen] on the notice of motion filed in Court on 7 June 2017 (Notice of Motion) surrender vacant possession of the property known as 232 Greta Road, Kulnurra in the State of New South Wales, being all that land comprised in lot 2 of Deposited Plan 239975 (the Property) to the Applicants [Mr Darin in his capacity as receiver and manager of the property] on the Notice of Motion within 7 days. 22/06/17 Sackar J 2. The Applicants have leave to issue a Writ of Possession forthwith. 3. A Writ of Possession of the Property be issued forthwith. 4. Execution of the Writ of Possession be stayed until 8 July 2017.

1. Mr Wong also received the amounts summarised in Table Two above (taken from Mr Birchall's 19 May 2020 affidavit) pursuant to various enforcement actions and the payment of dividends.
2. At paragraphs 61 and 62 of his 19 May 2020 affidavit, Mr Birchall explained how he converted SBD15m to USD1,934,250 for the purposes of Item 3 in Table One above. He said that he used the average TT Buy rate published by Bank South Pacific on the five banking days prior to 28 February 2017. He said that he used the historical exchange rate tool on Bank South Pacific's website to find the rates across those five days, calculated their average, and multiplied the average by 15,000,000.
3. Mr Birchall deposed that on or around 19 April 2020 he searched the Westpac website and was unable to find any quoted exchange rates, or any currency conversion tool, for exchanging SBD to USD or vice versa. He also stated that he made screenshots (exhibited at SCB-5 pp 380-382) which showed the following: (a) The conversion of $100 SBD 'foreign cash' to AUD. The page displayed the statement: 'Currency not available for this product Solomon Islands Dollar'. (b) The conversion of $100 SBD 'international payments' to AUD. The page displayed an SBD to AUD conversion rate of 5.6152 for a payment of AUD17.81. (c) The same as (b), but showing that by clicking the arrow next to 'SBD', a drop down menu of other foreign currencies is displayed, which one can choose for conversion to AUD instead of SBD.
4. He also deposed to a conversation he had with a representative of Westpac Australia's foreign exchange office named "Helen" via telephone on 2 April 2020. He stated that the conversation was in words to the following effect: [Birchall]: Does Westpac exchange one foreign currency for another currency; that is, an exchange whereby one of the currencies being exchanged is not Australian Dollars? For example, can I give Euros to Westpac and Westpac gives me US Dollars in return? Helen: Basically No. For individuals, not at all. For businesses, that can be done if the business is set up on our foreign exchange platform as a foreign currency trader. [Birchall]: In this case it would be an individual. Helen: The only way to do it would be to do a double conversion, converting from one currency into Australian Dollars, and then from Australian Dollars into another currency.
5. Further, in reply to Mr Keleher's affidavit (see below), Mr Birchall stated in his 25 May 2020 affidavit that on 25 May 2020 he called the same Westpac telephone number as is recorded in Mr Keleher's affidavit. He said that a lady called "Julia" answered the phone. When Mr Birchall asked to speak to Nik Siggers, Julia said words to the effect of: "Mr Siggers is not available today, but I can put you through to his supervisor, Sarah". Mr Birchall accepted the offer and had a conversation with Sarah in words to the following effect: [Birchall]: … I had called to speak to Nik Siggers because he has already spoken to a solicitor for the opponent party. Sarah: Yes, I am Nik's supervisor and am aware of this matter already. I have already said that Westpac will not provide an average 5-day reference exchange rate for such a transaction. We can provide the historical rates for an exchange from SBD to AUD, which you can find on our website, but it would be up to you and the other party to Google the rates for AUD to USD to work out a cross-rate. The parties would need to agree on the time of day for the dates concerned, whether it is 10am or some other time. It's up to you [the parties] to manage that. [Birchall]: In terms of the transaction itself, if Westpac was willing to undertake the exchange from SBD to USD under the circumstances described by Mr Siggers to the other solicitor, would the exchange rate offered by Westpac for the transaction be the same rate regardless of the amount of the transaction or the customer seeking to conduct the transaction, or would the rate offered vary depending on amount, customer or other factors? Sarah: The rate for the transaction would be a rate negotiated between Westpac and the customer. It would primarily depend on the amount of the transaction, and then the amount of business we have had with the customer would also play a role. If we had done more business with a particular customer, then that may lead Westpac to offer a better discount on the rate offered. Me: Would the rate offered depend on the time of day that the customer contacted Westpac to do the transaction? Sarah: Yes. We use the Reuters platform and the rates are changing constantly. The rate I would quote you for this transaction during this call would be different to the rate I would quote you at the end of this call. Me: Could you please tell me your surname and your position? SR: Reynolds. Associate Director, Team Leader.
6. During cross-examination, Mr Birchall stated that he had understood Helen to be saying "business in the sense of a company" but conceded that "I didn't ask her, 'Do you mean corporation?'". He also conceded that Sarah did not mention such a distinction.
7. At paragraph 93 of his 19 May 2020 affidavit, Mr Birchall deposed that he understands that "Mr Wong is entitled to claim the Goods and Services Tax component of his legal costs, including under a cost assessment, because neither he nor the Second Plaintiff trades in Australia." It is on this basis that the Van Vlymen Entities accept that the Wong Entities are entitled to recover GST payable on their costs.
8. Later in the same affidavit, Mr Birchall set out the basis of the Wong Entities' claims for his legal costs and disbursements for the periods from March 2016 to 28 February 2017 and from 1 March 2017 to 1 May 2020 (as referred to above). Those periods relate to Items 19 and 17, respectively. Mr Birchall provided bundles of invoices relating to these costs and disbursements under a notice to produce. He was also cross-examined in relation to his costs.
9. During cross-examination, Mr Birchall deposed that: My standard rate for work on the Wong matter would be $380 an hour ex GST… And depending on the work I am doing, from time to time I charge a blended rate, so for some work it might be less if it's less demanding, such as $350 an hour, $320 an hour, it varies. But generally speaking, 380. To average it over that time, I could only guess maybe 370, 360, but that's an average only and that's a guess.
10. His best recollection of Mr Burchett's rate was that it "would be probably around $450 an hour in 2016, and now I believe it is $500 an hour ex GST." He "hazard[ed] a guess" that Mr Hutley's fees for the February 2018 Notice of Motion were "more than $20,000 a day".
11. Mr Birchall also deposed that he estimated an 80% recovery rate on the costs and disbursements in Item 19 (which were not the subject of an indemnity costs order) on the basis of his past experience in some cost assessments. He estimated that he has been involved in "between three and five" costs assessments in the past.

Mr Patrick Wong

1. The Wong Entities rely on two affidavits affirmed by Mr Wong on 19 May 2020 (with exhibit PW1) and 22 May 2020, and to the extent they are referred to in those affidavits, two further affidavits affirmed by Mr Wong on 9 November 2015 (with exhibit PW3) and 23 December 2015 (with exhibit PW4).
2. Mr Wong deposed that prior to his exclusion from the Solomon Islands in 2012 he regularly attended the Westpac Bank at 721 Mendana Avenue, the main street of Honiara. He said that the bank held the accounts of the Joint Venture companies.
3. Mr Wong recalled that there was a separate section of the bank for international transactions where he saw that Westpac posted a daily foreign exchange rate sheet, quoting rates of exchange between SBD and both USD and AUD and other currencies foreign to the Solomon Islands. He stated that the sheet referred to the rate at which Westpac bought foreign currency in exchange for SBD as an "Inward TT exchange rate".
4. Mr Wong stated that he would from time to time call or email Westpac and Westpac would send him the exchange rate sheets. He also stated that he and Mr Van Vlymen had attended the bank together a few times when they needed to co-sign documents, and from time to time checked the exchange rates at the international transactions counter and discussed the rates published by Westpac's Honiara branch. He said they frequently discussed banking in the Solomon Islands, always referring to Westpac in the Solomon Islands, and never qualifying "Westpac" with "Honiara", "Solomon Islands" or "Pacific".
5. He said that he does not recall ever discussing Westpac in Australia or exchanging SBD for foreign currency anywhere but in the Solomon Islands due to the strong restrictions on removing SBD from the Solomon Islands.
6. Mr Wong deposed that when he entered into the November 2016 Deed, in cl 6.3(b), he was referring to the banking business of Westpac in Honiara and believed Mr Van Vlymen was referring to the same. He said he believed that: in the absence of an actual exchange of currency at or by the bank in Honiara from foreign currency to SBD, the Inward TT rate could be used to calculate a conversion from SBD to a foreign currency simply by multiplying the SBD sum by the Inward TT rate, instead of dividing the SBD by the rate.
7. During cross-examination, Mr Wong confirmed that he chose the buy (or "inward") rate rather than the sell rate because it would give him an advantage.
8. In his 19 May 2020 affidavit, Mr Wong stated that he believed that Westpac continued to operate a bank in Honiara when he entered into the November 2016 Deed. Mr Wong corrected this statement in his 22 May 2020 affidavit. He said he had re-read paragraph 21 of his 23 December 2015 affidavit where he referred to the minutes of a meeting of directors of LSL (one of the Joint Venture Companies) which were received by him about a week after the meeting and referred to the company's bank account with Bank South Pacific as "(formerly Westpac account)".
9. Mr Wong was cross-examined on his ignorance of the sale of the Westpac branch in Honiara to Bank South Pacific. He conceded that he did know about the transaction in November 2016 but said that he was not focused on it at the time due to the company restructure that was occurring.
10. Mr Wong exhibits (at pp 28-29 of Exhibit PW-1) copies of exchange rate sheets prepared by Bank South Pacific dated 4 November 2016 and 31 March 2020 in which the bank quoted exchange rates for conversion between SBD and AUS, and between SBD and USD.

Mr Sean Keleher

1. The Van Vlymen Entities rely upon one affidavit of their solicitor, Mr Keleher, dated 22 May 2020 (with exhibit SK-2).
2. Mr Keleher deposed to a conversation he had with Mr Nik Siggers, Senior Associate, Westpac Consumer, Premium & Micro SME Foreign Exchange via telephone on 19 May 2020. That conversation was said to include the following: [Keleher]: I understand that you sent an email to Mr Van Vlymen in May 2019 in which you confirmed that the Inward exchange rate means the Buy rate which appears on the Westpac Foreign Exchange Historical Rates webpage. Siggers: Yes, that's correct. The Inward rate is the Buy rate. The Buy rate and the Sell rate is always from the point of view of the bank. So if a customer wants to exchange a foreign currency for Australian dollars, the bank is buying the foreign currency so it applies the buy rate. … [Keleher]: Does Westpac provide exchange rates for the exchange of Solomon Island dollars to US dollars? Siggers: The process for exchange of one foreign currency into another foreign currency is that the customer would contact us and obtain an exchange rate for the transaction. We use Reuters rates which provides a wholesale rate then we apply our margin and that is the rate which we quote the customer. [Keleher]: So the rate Westpac would offer to exchange Solomon Island Dollars to US Dollars is not published on a website but Westpac can quote the rate? Siggers: Provided the customer has a US Dollar account, yes, we can do that. [Keleher]: And so, hypothetically, if the customer was intending to conduct the exchange of Solomon Islands Dollars to US Dollars on 28 February, the customer could call your department each day in the week leading up to the transaction and obtain a rate that Westpac would provide to effect that transaction on each day leading up to 28 February. Siggers: Yes, that is possible. [Keleher]: And was that the case in February 2017? Siggers: Yes.
3. Documents in SK-2 are said to show that Westpac has a branch in New York (see Westpac Group's "Full Year 2015 Financial Result" (dated before the parties' November 2016 Deed) and "2016 Westpac Group Annual Report" (dated after the parties' November 2016 Deed)).

Mr Matthew Hogg

1. The Van Vlymen Entities rely upon three affidavits of Mr Matthew Hogg dated 22 May 2020, 24 May 2020 (with an Annexure A) and 2 June 2020 (also with an Annexure A).
2. Mr Hogg is a director of Agrinova Pty Ltd ('Agrinova'). He stated that in early 2020 Agrinova obtained finance from Capital Securities Australia Pty Ltd ('CSA') in part for the purposes of Mr Van Vlymen paying the balance owing to the Wong Entities under the Deed.
3. In his 22 May 2020 affidavit, Mr Hogg stated that he will consider increasing the amount Agrinova is prepared to fund Mr Van Vlymen if this Court determines that the amount to be paid to the Wong Entities is greater than the balance available under the loan facility.
4. Mr Hogg stated that he needs confirmation of the final amount payable by Mr Van Vlymen to Mr Wong before Agrinova can move forward with that transaction.
5. Annexure A to Mr Hogg's 2 June 2020 affidavit is a copy of a CSA loan statement for the period 14 February 2020 to 13 June 2020.

Bank South Pacific Exchange Rates (SCB-5 p 378)

1. Mr Leopold SC also referred to a document which he described as "an extract from the business records of Bank South Pacific" (T.124:44-45) which showed the rates at which the bank buys and sells foreign currency. It was said to show that when the bank is "selling out US dollars and therefore buying in Solomon Islands dollars, that's a sell rate rather than the buy rate which is referred to in the contract" (T.124:1-6).

Merger & Election

1. Under normal circumstances it is true that when an order for specific performance is made any claim for damages for breach of the underlying contract is lost because it will have merged in the judgment for specific performance. That is what happened in Lahoud. However, it is not the case that the contractual rights of the parties merge in the order for specific performance. Further, in this case, as I have already noted above, Stevenson J's orders reserved further consideration of the matter as well as liberty to apply, the Wong Entities having claimed damages in addition or in the alternative to the order for specific performance.
2. It is also the case that the parties can superimpose upon the order for specific performance additional contractual obligations. That is what happened here. Stevenson J's judgment concerned the 2014 contract, which was ordered on 9 March 2016 to be performed by execution of the Settlement Agreement and payment of the USD250,000 deposit. The Settlement Agreement was entered on 11 March 2016. However, Mr Van Vlymen continued to default on his obligations, leading to the Deed being entered on 4 November 2016. The Deed imposed new obligations on the parties, including the requirement for the Van Vlymen Entities to pay the additional AUD1.4m, while being stated to be a mechanism by which the new arrangement could be complied with, the Settlement Agreement satisfied, and the certain proceedings (said to be in 2015 and 2016) could be settled. Whatever the state of play at the time the order for specific performance was made with respect to the monies owed under the Settlement Agreement, it seems abundantly plain that the Van Vlymens unequivocally agreed to pay the new AUD1.4m. I do not accept the Van Vlymen Entities' submission that their opponents' claim for interest on that additional AUD1.4m amount has been forsaken by some election associated with their choice to enforce the prior order for specific performance. To the contrary, the Wong Entities explicitly reserved their right to seek interest on that amount in cl 10.2(d)(iv) of the November 2016 Deed.
3. Further, it does not seem to me that the Wong Entities did or were required to abandon their claim for damages or interest with respect to the other Items (2, 4 and 5) when they elected to enforce the order for specific performance through the receivers. Mr Jackman SC pointed out, and I think that he is right, the choice to enforce a contract or order for specific performance through the appointment of receivers to recover monies due is not a mutually exclusive alternative to maintaining a claim to damages which requires an election to be made at the first moment of non-compliance. Section 68(b) of the Supreme Court Act allows the Court to award damages in addition to specific performance. I agree with the Wong Entities' submission that their election to retain the order for specific performance does not prevent additional relief or, if ultimately the order is vacated, alternative relief, for the Van Vlymen Entities' original or subsequent defaults.
4. Further, at every turn the Wong Entities were assiduous in reserving their rights to damages and interest, not only in Court but also in the terms of the November 2016 Deed. In particular, the USD1.75m and SBD15m amounts were made payable under cl 6.3 of the Deed, while cl 10.2(b) made them recoverable as liquidated debts upon default. The Wong Entities then reserved their right to seek interest on those amounts, as well as the late payment of the USD250,000, in cl 8(c) (subject to the potential release) and 10.2(d)(iv) of the Deed. In addition, the orders of the Court have consistently reserved further consideration of those matters.
5. For these reasons I do not accept the Van Vlymen Entities' arguments relating to merger and election.

Penalty

1. The Van Vlymen Entities raise the penalty argument in relation to Items 2, 4, 5, 11, 12, 15, 16, 19, 20, 21, 22, 23 and 24. They say that Items 2, 4 and 5, relating to interest on the USD1.75m, SBD17m and USD250,000 amounts, fall within cl 8(c)(iv) of the Deed, which provides for a release from liability for interest accrued to 28 February 2017 on the failure of the Van Vlymen Entities to pay those amounts in time under the Settlement Agreement. They say that Items 11 and 15, relating to the receivers' fees and disbursements up to 28 February 2017, and Items 12 and 16, relating to interest on those amounts, fall within the releases in cll 8(a) and 8(c)(i). Finally, they say that Items 19, 21, 23, relating to Mr Birchall's costs and disbursements up to 28 February, and Items 20, 22 and 24, interest on those amounts, fall within the releases in cll 8(b) and 8(c)(ii)-(iii).
2. All of the releases in cl 8 were made conditional upon "payment in full of the 2016 Settlement Payment [the AUD1.4m] in accordance with this deed and on condition that the Van Vlymen Entities and Mrs Van Vlymen have not otherwise committed a Default under clauses 10.1(i) to 10.1(iii)". Those conditions are not satisfied and therefore the releases on one view do not come into effect. But the Van Vlymen Entities submit that they have agreed to pay the AUD1.4m in consideration for the releases, and cl 8, by requiring the Van Vlymen Entities to also pay all of the released amounts upon default of cll 10.1(i) to 10.1(iii), imposes an unenforceable penalty on them.
3. I disagree. To be considered a penalty, the amount to be paid on default must be "out of all proportion to the interests of the party which it is the purpose of the provision to protect" (Paciocco at [29]). One must have regard to the commercial context and what is to be identified is something exceptional or extreme or "out of all proportion".
4. Under the March 2016 Settlement Agreement not only was the USD250,000 to be paid on exchange but the final payments of USD1.75m and SBD15m were to be paid no later than 120 days after exchange. Mr Van Vlymen could not complete on time or at all. It may be recalled that he finally paid the USD250,000 in August of 2016. The November 2016 Deed was entered due to his continuing defaults and interminable delay. Importantly, the balance of the recitals as it were set out all of the steps taken by the parties, each trying to outmanoeuvre each other in their seemingly never ending dispute. Whilst the Wong Entities failed to receive the payments promised, the Van Vlymen Entities attempted to buy more time to pay up and at the same time maintain their assets. The commercial context is one that involves serial defaulting on the part of Mr Van Vlymen and continual renegotiation between the parties as Mr Wong attempted to be paid. With this in mind, I accept Mr Jackman SC's submission that the additional AUD1.4m represented "a commercial break point in an overall negotiation for an extended completion with a lot of strings attached" (T.69:28-29). Clause 8 gave the Van Vlymen Entities the opportunity to obtain the releases. However, in cl 5 the Wong Entities also agreed to the stay of proceedings, including the enforcement of court orders, and the postponement of the sale of the Van Vlymens' properties by the trustees and receivers. They also agreed to move the Court for orders discharging all extant orders made in and further consideration of and discontinuing the 2015 Proceedings and 2016 Proceedings if the November 2016 Deed was fully complied with.
5. As Stevenson J pointed out years ago, it would have been "extraordinarily difficult" then let alone now for Mr Wong to prove what damage he has suffered by reason of the Van Vlymen Entities' failure to complete. In a commercial transaction like this, involving sophisticated former joint venturers, to charge interest on outstanding payments, or require reimbursement for legal and receiver costs actually incurred, does not seem to me to be out of all proportion with the commercial interests involved, especially where Mr Van Vlymen has continued to delay, and Mr Wong's principal cause and the subsequent loss and damage caused to the Wong Entities' interests in the joint venture by that ongoing delay are likely insusceptible of calculation. Objectively viewed in this particular commercial context, I do not consider the requirement to pay the amounts referred to in cl 8 of the Deed exceptional or extreme.
6. Further, cl 8 concerned the potential release of acknowledged existing liabilities arising out of the Van Vlymen Entities' failure to comply with the Settlement Agreement. It seems to me that the law of penalties has no application in these circumstances (Auzcare at [21]; O'Dea at 367).

Legal and Receiver Fees and Disbursements

1. It seems that the Van Vlymen Entities have accepted liability for the expenses of the receivership (Items 9, 11, 13, 15) and the parties have agreed that gross liabilities are to be set-off against gross receipts. As the receivership continues, the Van Vlymen Entities may also become liable for further expenses.
2. I am of the view that a gross sum costs order should be made with respect to the Wong Entities' legal fees and disbursements. Having rejected the Van Vlymen Entities' penalty argument, the issue left to be determined is what, if any, discount/s should be applied to the legal costs and disbursements claimed in Items 17 and 19.
3. I do not accept the Wong Entities' submission that cll 10.2(a)(iv) and 13(a) of the Deed entitle them to a 100% indemnity against relevant legal costs. Both of those clauses refer to costs being recoverable on the "indemnity (solicitor-client)" basis. With respect to both Items 17 and 19, I would apply a 10% discount to the costs said to be recoverable on an indemnity or solicitor-client basis.
4. Further, having considered Mr Birchall's invoices and the other evidence in this case, I agree with the Van Vlymen's submission that the estimated recovery of 80% solicitors' costs and 90% of counsel's fees in respect of the amounts not subject to an indemnity costs order in Item 19 is too generous. In my assessment I should apply a discount of 30% to the total solicitors' costs and counsels' fees claimed on the party-party basis to allow for contingencies.

Interest

1. Further, I do not agree with the Wong Entities' submission that they have a contractual right to interest under cll 8(c) and 10.2(d)(iv) of the Deed. Clause 8(c) provides for the potential release of the Van Vlymen Entities "from any further liability for interest accrued to 28 February 2017", conditional on non-default of cll 10.1(i)-(iii). Clause 10.2(d)(iv) states that in the event of any Default "the Wong Entities may seek to recover interest in respect of that Default". In my view, rather than conferring a contractual right to interest on the Wong Entities, these clauses merely give notice to the Van Vlymen Entities that the Wong Entities may seek to recover interest on default.
2. However, so far as I have a discretion to award interest under ss 100 and 101 of the CPA, I would exercise my discretion in favour of the Wong Entities with respect to each of their claims to interest. I agree that for those amounts payable in Australian dollars interest payable pursuant to s 100 (up to judgment) should be at the Reserve Bank cash rate plus 4% and interest payable pursuant to s 101 (post judgment and costs) should be at the Reserve Bank case rate plus 6%. It is appropriate for the same approach to be taken with respect to the amounts payable in USD, substituting "US Federal Funds rate" for "Reserve Bank cash rate".
3. The Van Vlymen Entities accepted that if their penalty argument was wrong they should pay interest on the portions of Items 12 & 16 that were actually paid by Mr Wong (totalling AUD70,000) from the dates on which he made the relevant payments. They made the similar concessions with respect to their liability for interest on Items 10, 14, 20, 22 and 24. Having rejected the Van Vlymen's penalty argument and noting the extent of the parties' agreement on the other issues, I also agree with this approach.
4. With respect to the remaining interest Items (2, 4, 5, 8, 18), I agree that interest ought to be payable from the dates proposed by the Wong Entities: First, interest on the USD1.75m and SBD15m amounts should be paid under s 100 from the date those amounts first fell due and the Van Vlymen Entities fell into default (24 May 2015) up until the date they were ordered to be paid (9 July 2016), and under s 101 from 9 July 2016 thereafter. Secondly, interest on the USD250,000 amount should be paid under s 100 from the due date (24 January 2015) to the date it was ordered to be paid (9 March 2016), and under s 101 thereafter until it was paid on 26 August 2016. Thirdly, at this stage, interest on the unpaid portion of the AUD1.4m ought to be paid under s 100 from the date the Van Vlymen's fell into default under the Deed (1 March 2017). Finally, interest on the gross sum costs order relating to Mr Birchall's legal fees and disbursements since 1 March 2017 (Item 18) should be paid under s 101(4) from the dates the relevant payments were made by the Wong Entities.

The SBD Payment: Currency

1. The Wong Entities say that Mr Wong gets to choose the currency in which the SBD15m amount will be paid because cl 6.4 of the November 2016 Deed says so. I disagree. They place emphasis on the word "manner" as meaning the currency in which the funds are to be paid. But the word "manner", in its ordinary English meaning, means the way to do something. Clause 6.4(a) expressly makes clear that payment by personal cheque, for example, meaning in that "way", is unacceptable. I consider "manner" means bank cheque, electronic transfer or perhaps a bond but that it says nothing about (absent express agreement) the currency choice.
2. It would also seem strange to give the currency choice to the recipient of the funds. The seller has no interest other than to receive the USD or AUD equivalent of SBD on a particular day. I consider the better way to construe the clause is as an obligation on the Van Vlymen Entities to pay on a particular day at a particular rate in a currency of their choice provided it converts to SBD15m. The word "payment" at the beginning of cl 6.3(b), taken together with cl 6.3(a), refers to a payment obligation upon the Van Vlymen Entities. The refusal to accept a personal cheque and the obligation upon the Wong Entities not unreasonably to refuse any other way or manner of payment is clear reference to the means or method of payment and not the currency it is in. The choice of USD or AUD is an indication that payment will be accepted in either currency provided that on the relevant day it converts to SBD15m. If it was intended to give the choice of currency it could have been made clear. I do not think giving Mr Wong a choice over manner does any more than give him a choice over the way, the means or perhaps the method.

"Westpac TT Exchange Rate"

1. It should be remembered that the March 2016 Settlement Agreement provided for payment in Honiara (see cl 4.4(ii)). Clearly it seems at this point settlement was to take place in SBD and by bank cheque (again see cl 4.4(ii)).
2. The evidence would suggest the parties had the Joint Venture's bank account/s at Westpac in Honiara and from time to time Mr Wong and Mr Van Vlymen would attend the bank together. There were daily published exchange rates between SBD and AUD or USD. It seems that at some time in 2015 before the November 2016 Deed was originally formed Westpac transferred its business to Bank South Pacific. It seems logical that the parties had jointly in mind a local Bank in the Solomon Islands and the relevant rate quotes there but simply were mistaken as to the precise bank at the time they negotiated the agreement. That of itself should not vitiate the contract in my view.

Date for exchange rate calculation

1. It further seems to me that the rate at the anticipated date of settlement should be the date for the calculation. That was the last possible "date of payment" under the Deed (cl 6.3(b)).

Conclusion

1. In summary, it does not seem to me that the Wong Entities have at any time elected to forsake their claims to interest and damages, nor can I say that cl 8 when objectively viewed in the commercial circumstances of this case imposes an unenforceable penalty on the Van Vlymen Entities. Having disagreed with the Van Vlymen Entities' election and penalty arguments, I would exercise my discretion under ss 100 and 101 of the CPA in favour of the Wong Entities with respect to each of their claims to interest. I agree with the Wong Entities' submissions that "Westpac TT Exchange Rate" means the rate previously published by Westpac in Honiara and subsequently published by its successor, Bank South Pacific, and that the exchange rate ought to be calculated by reference to the 5 banking days prior to 28 February 2017. However, I have concluded that the Van Vlymen Entities may choose whether the SBD15m amount is to be paid in USD or AUD. I consider it appropriate in this case to make a gross sum costs order and would apply a 10% discount to costs recoverable on an indemnity or solicitor-client basis, and a 30% discount to costs recoverable on a party-party basis.
2. I invite the parties to do the relevant calculations and bring in short minutes of order to reflect my judgment. If there are any further outstanding questions of cost, I will hear further argument.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 July 2020