1110 Hay Pty Ltd as trustee for the Hay Street Trust v Metso Minerals (Australia) Ltd [No 4] - [2019] WASC 146

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   1110 HAY PTY LTD as trustee for THE HAY STREET TRUST -v- METSO MINERALS (AUSTRALIA) LTD [No 4] [2019] WASC 146
CORAM:   DERRICK J
HEARD:   18 APRIL 2019
DELIVERED          :   9 MAY 2019
FILE NO/S:   CIV 3327 of 2011
BETWEEN:   1110 HAY PTY LTD as trustee for THE HAY STREET TRUST
Plaintiff
AND
METSO MINERALS (AUSTRALIA) LTD
First Defendant
METSO MINERALS OY
Second Defendant
METSO MINERALS (AUSTRALIA) LTD
Plaintiff by counterclaim
AND
1110 HAY PTY LTD as trustee for THE HAY STREET TRUST
Defendant by counterclaim

Catchwords:

Lease - Compromise agreement - Claims by parties for amounts payable under Lease and Compromise Agreement - Determination of claims

Section 32 of the Supreme Court Act 1935 (WA) - Whether O 20 r 9(1)(a) or O 20 r 9(1)(b) of the Rules of the Supreme Court 1971 (WA) requires a party to expressly plead reliance on s 32(2)(b) of the Supreme Court Act in response to a claim by another party to interest pursuant to s 32(1) of the Supreme Court Act - Whether by virtue of s 32(2)(b), s 32(1) does not apply in relation to any debt upon which interest was, but is no longer, payable as of right

Contract - Principles of construction

Legislation:

A New Tax System (Goods and Services Tax) Act 1999 (Cth)
Civil Procedure Act 2005 (NSW)
Courts Legislation Amendment Act 1996 (NSW)
Property Law Act 1969 (WA)
Rules of the Supreme Court 1971 (WA)
Supreme Court Act 1935 (WA)
Supreme Court Act 1970 (NSW)
Transfer of Land Act 1893 (WA)

Result:

Further questions posed for determination by parties answered

Category: B

Representation:

Original Action

Counsel:

Plaintiff	:	Mr C S Williams
First Defendant	:	Mr B W Ashdown
Second Defendant	:	No appearance

Solicitors:

Plaintiff	:	Solomon Brothers
First Defendant	:	Squire Patton Boggs
Second Defendant	:	No appearance

Counterclaim

Counsel:

Plaintiff by counterclaim	:	Mr B W Ashdown
Defendant by counterclaim	:	Mr C S Williams

Solicitors:

Plaintiff by counterclaim	:	Squire Patton Boggs
Defendant by counterclaim	:	Solomon Brothers

Case(s) referred to in decision(s):

1110 Hay Pty Ltd as trustee for the Hay Street Trust v Metso Minerals (Australia) Ltd [No 3] [2018] WASC 230
Ammon v Colonial Leisure Group Pty Ltd [2018] WASC 280
Bans Pty Ltd v Ling (1995) 36 NSWLR 435
Black Box Control Pty Ltd v Terravision Pty Ltd [2016] WASCA 219
Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640
Grincelis v House [2000] HCA 42; (2000) 171 CLR 657
Grove v Fisher [2002] WASC 247
Jeanswest Corp Pty Ltd v Archer [2004] WASCA 132
La Macchia v Minister for Primary Industries & Energy (1992) 110 ALR 201
Mustac v Medical Board of Western Australia [2007] WASCA 128
Permanent Building Society (In Liquidation) v Aqua Vital Australia Ltd (Unreported, WASC, Library No 9600517, 5 March 1996)
Simic v New South Wales Land and Housing Corporation [2016] HCA 47; (2016) 339 ALR 200
St Barnabas Nominees Pty Ltd v Stallard Corp Pty Ltd (No 2) [2011] WASC 289 [S]
The Humane Society of WA (Inc) v Carryer [2000] WASC 250
Undershaft (No 1) Ltd v Federal Commissioner of Taxation [2009] FCA 41; (2009) 175 FCR 150
Victoria v Tatts Group Ltd [2016] HCA 5; (2016) 328 ALR 564

DERRICK J:

Introduction

In May 2018 I heard the five day trial of the action between the plaintiff and the first defendant (the defendant).[1] For the purposes of the trial the parties specified a number of questions for my determination. The parties specified the questions on the basis that my answers to the questions would determine the dispute between them.
[1] The second defendant is a company incorporated in Finland. The plaintiff has not sought to serve the writ of summons on the second defendant outside of the jurisdiction. Accordingly, the action does not concern the second defendant despite the fact that it is named as a defendant in the action.
On 3 August 2018 I published my written reasons for decision (the primary reasons).[2] In the primary reasons I answered each of the questions that had been posed for my determination by the parties.
[2] 1110 Hay Pty Ltd as trustee for the Hay Street Trust v Metso Minerals (Australia) Ltd [No 3] [2018] WASC 230.
After I published the primary reasons the parties conferred and decided that there were further questions that they had not previously identified but which they needed me to answer in order to enable them to calculate the final judgment sum in accordance with the answers that I had provided in the primary reasons to the questions initially posed for my determination. Consequently the parties filed, for my approval, a further Statement of Agreed Issues for Determination (the further statement of issues). I made orders approving the further statement of issues on 29 November 2018. [3]
[3] In addition to making orders approving the further statement of issues I also made orders referring the parties to mediation before Strk AJ pursuant to pt VI of the Supreme Court Act 1935 (WA). I did so in order to give the parties a further opportunity to settle their dispute in light of the answers that I had given in the primary reasons to the questions initially posed for my determination. In accordance with my orders the parties engaged in mediation before Strk AJ on 16 January 2019 and 31 January 2019. They were unable to settle their dispute.
The hearing relating to the further statement of issues took place before me on 18 April 2019. [4]
[4] The hearing relating to the further statement of issues was in essence a continuation of the trial of the action. However, for ease of distinction I will use the term 'the trial' to refer to the hearing that took place before me in May 2018 and in respect of which I delivered the primary reasons and the term 'the hearing' to refer to the hearing relating to the further statement of issues.
At the commencement of the hearing counsel informed me that the parties had agreed upon certain amounts that were payable by the defendant to the plaintiff to give effect to my findings in the primary reasons, that as a consequence a significant number of the questions posed in the further statement of issues had fallen away and no longer needed to be determined by me, and that the only further questions specified in the further statement of issues that remained for my determination were questions 2 and 4.
Further questions 2 and 4 involved issues of law. Accordingly, the parties did not adduce any further evidence at the hearing.
In these reasons I will deal with and answer further questions 2 and 4.
I do not propose to reproduce in these reasons the content of the primary reasons save to the extent that it is necessary for me to do so in order to give context to my answers to further questions 2 and 4. These reasons will assume familiarity with the content of the primary reasons and should be read in conjunction with the primary reasons. Further, the terms used in these reasons that are defined in the primary reasons bear the same meaning as given to them in the primary reasons.

Further question 2(a): Is it open to the defendant to now contend that s 32(2)(b) of the Supreme Court Act 1935 (WA) disentitles the plaintiff to statutory interest after 24 April 2012 on amounts where interest was payable under cl 4.2 of the Lease prior to 24 April 2012?

One of the questions that I was asked to determine at the trial (question 12) was whether any interest was payable by the defendant under cl 4.2 of the Lease on amounts that were payable by the defendant to the plaintiff under the Lease after 18 May 2010. I decided that interest was only payable by the defendant under cl 4.2 of the Lease on the closing balance of rent and other money payable by the defendant under the Lease as at 24 April 2012. I did so on the basis that it was only the interest that was payable under cl 4.2 of the Lease as at (that is, up until) 24 April 2012 that was assigned by Castilo to the plaintiff under cl 6.9(b)(1) of the General Conditions.[5]
[5] Primary reasons [513].
The defendant now seeks to contend that the plaintiff is not entitled to seek statutory pre-judgment interest under s 32(1) of the Supreme Court Act1935 (WA) (SCA) from the period 25 April 2012 to the date of judgment at 6% per annum on the closing balance of rent and other money that was payable by the defendant under the Lease as at 24 April 2012 and on which interest was payable by the defendant under cl 4.2 of the Lease up until 24 April 2012.The basis for the defendant's contention in this regard, to which I refer further below in dealing with further question 2(b), is that s 32(2)(b) of the SCA precludes any such claim being made by the plaintiff.
The plaintiff submits that it is not now open for the defendant to contend that the plaintiff is not entitled to statutory pre-judgment interest pursuant to s 32(1) of the SCA on the rent and other money that was payable by the defendant under the Lease as at 24 April 2012 and on which interest was payable by the defendant under cl 4.2 of the Lease up until 24 April 2012 because the defendant did not plead reliance on s 32(2)(b) of the SCA.[6] The plaintiff contends that the defendant was by reason of O 20 r 9(1)(a) and/or O 20 r 9(1)(b) of the Rules of the Supreme Court 1971 (WA) (RSC) required to expressly plead its reliance on s 32(2)(b).
[6] All further references to the rent and other money that was payable by the defendant under the Lease as at 24 April 2012 should be read as including a reference to the interest that was payable by the defendant under cl 4.2 of the Lease up until 24 April 2012.
The plaintiff did, in the Second Re‑Amended Statement of Claim and as required by O 20 r 9(4) of the RSC, include in its prayer for relief a claim for 'interest pursuant to the Lease, alternatively pursuant to s 32 of the [SCA]'. The defendant in the Further Amended Substituted Defence (the Defence) denied that the plaintiff was entitled to this relief or any relief at all.
The defendant does not dispute that it did not expressly plead in the Defence its reliance on s 32(2)(b) of the SCA. However, it contends that it was not required by O 20 r 9(1)(a) or O 20 r 9(1)(b) to do so essentially for two reasons which I will elaborate upon below.
Section 32(1) of the SCA relevantly provides:
In any proceedings for the recovery of any money…, the Court may order that there shall be included, in the sum for which judgment is given, interest at such rate as it thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date when the judgment takes effect.
Section 32(2)(b) provides:
This section does not -
(b)apply in relation to any debt upon which interest is payable as of right whether by virtue of any agreement or otherwise.
Order 20 r 8(1) of the RSC relevantly provides:
Subject to the provisions of this rule, … every pleading must contain, and contain only, a statement in a summary form of the material facts on which the party pleading relies for his claim or defence, as the case may be, but not the evidence by which those facts are to be proved, and the statement must be as brief as the nature of the case admits.
Order 20 r 9(1) of the RSC relevantly provides:
A party must in any pleading subsequent to a statement of claim plead specifically any matter, for example, performance, release, any relevant statute of limitation, fraud or any fact showing illegality ‑
(a)which he alleges makes any claim or defence of the opposite party not maintainable; or
(b)which, if not specifically pleaded, might take the opposite party by surprise; or
(c)...
Order 20 r 9(1) does not abrogate or limit O 20 r 8(1), but rather exemplifies its operation in pleadings subsequent to the Statement of Claim. The purpose of the rule is to require any party who has a special ground of defence or who raises an affirmative case to destroy a claim or defence, as the case may be, to plead specifically the matter relied on for this purpose.[7] The rule requires a party to specifically plead as a defence any statutory defence to an action or any other statutory provision which may render the proceedings, or their ultimate objective, non‑maintainable. [8]
[7] Jeans West Corporation Pty Ltd v Archer [2004] WASCA 132 [1], [2], [12].
[8] Jeans West Corporation Pty Ltd v Archer [1], [2], [12].
The defendant contends that it was not required by O 20 r 9(1)(a) to expressly plead its reliance on s 32(2)(b) of the SCA because an entitlement to interest pursuant to s 32(1) of the SCA is not a 'claim' within the meaning of O 20 r 9(1)(a) made by the plaintiff to which the defendant is, by reason of the rule, specifically required to plead. The defendant contends that a 'claim' is not a remedy sought but rather the facts that give rise to the party's action as well as the legal basis for the action. The defendant argues that given that s 32(1), by which the Court is given a discretion to add a sum by way of interest to money judgments in order to compensate a plaintiff for being kept out of their money, does not create a cause of action[9] the plaintiff has no 'claim' within the meaning of O 20 r 9(1)(a) to an award of interest under s 32(1).
[9] The Humane Society of WA (Inc) v Carryer [2000] WASC 250 [6] ‑ [7]; Grove v Fisher [2002] WASC 247 [34]; Ammon v Colonial Leisure Group Pty Ltd [2018] WASC 280 [7].
The defendant further contends that even if contrary to its advanced position the plaintiff's claim for interest under s 32(1) is a 'claim' within the meaning of O 20 r 9(1)(a), neither that rule nor O 20 r 9(1)(b) required it to specifically plead its reliance on s 32(2)(b) because this is not a matter that it could have pleaded before I made my findings in the primary reasons that the plaintiff was entitled to rent and other money payable by the defendant under the Lease as at 24 April 2012. [10] In this regard the defendant points out that its case at trial as pleaded and presented (which I did not accept) was that:
1.cl 6.9(b)(1) of the General Conditions did not validly effect an assignment from Castilo to the plaintiff of rent and other money payable by the defendant under the Lease as at 24 April 2012;
2.on and from 24 April 2012 the right to recover rent and other money payable under the Lease was a right which vested in Castilo; and
3.the plaintiff was therefore not entitled to seek interest pursuant to the Lease or pursuant to s 32(1) of the SCA.
[10] Primary reasons [513].
In short, the defendant contends that given that the question whether the plaintiff is entitled to recover interest under s 32(1) of the SCA after 24 April 2012 has only arisen as a result of my finding that the plaintiff is not entitled to interest under cl 4.2 of the Lease after that date, it could not have envisaged, in advance of my findings, that it would need to rely on s 32(2)(b) in response to the plaintiff's claim for interest under s 32(1).
I do not accept either of the defendant's arguments.
As to the first of the defendant's arguments clearly, as is accepted by the plaintiff, a claim for statutory pre-judgment interest under s 32(1) of the SCA is not part of a party's cause of action. Nonetheless, in my opinion the ordinary meaning of the word 'claim' clearly encompasses a claim for statutory pre-judgment interest under s 32(1) of the SCA made in a prayer for relief. I do not consider that there is any basis in the wording of O 20 r 9(1)(a) for construing the word 'claim' in the narrow way contended for by the defendant, namely that it refers to a cause of action rather than a remedy sought. Indeed, the fact that a claim for interest under s 32(1) of the SCA is a 'claim' for the purposes of O 20 r 9(1)(a) is exemplified by the fact that O 20 r 9(4)(c) imposes an obligation on a plaintiff claiming interest to claim it specifically and, where the claim for interest is pursuant to a statute, to plead in the statement of claim the identity of the statutory provision, the rate claimed, and the date or dates from which interest is claimed.
In arriving at the conclusion expressed in the preceding paragraph I have not overlooked the decisions of Masters of this court referred to by the defendant in which their Honours have stated that there is no requirement to plead specifically to a prayer for relief.[11] However, the statements were not made in the context of considering the application of O 20 r 9(1)(a) and O 20 r 9(1)(b) in the case of a claim for interest made under s 32(1) of the SCA, and must in any event be read subject to the terms of O 20 r 9(1)(a) and O 20 r 9(1)(b).
[11] Permanent Building Society (In Liquidation) v Aqua Vital Australia Ltd (Unreported, WASC, Library No 9600517, 5 March 1996) 5 (Master Bredmeyer); The Humane Society of WA (Inc) v Carryer [7] (Master Sanderson).
As to the second of the defendant's arguments, I do not accept that the defendant could not have foreseen or anticipated the possibility:
1.that I would (contrary to its argument) find that cl 6.9(b)(1) did validly effect an assignment from Castilo to the plaintiff of rent and other money payable by the defendant under the Lease as at 24 April 2012;
2.that I would therefore also find that it was only interest that was payable by the defendant under cl 4.2 of the Lease on the rent and other money that was payable by the defendant under the Lease as at 24 April 2012 that was assigned by Castilo to the plaintiff by reason of cl 6.9(b)(1); and
3.that as a consequence the plaintiff's pleaded claim for statutory pre‑judgment interest would relate to the period after 24 April 2012 and may (on the defendant's case) give rise to the question whether s 32(2)(b) precluded any such claim being made.
Having rejected the defendant's arguments for saying that it was not required by O 20 r 9(1)(a) or O 20 r 9(1)(b) to expressly plead its reliance on s 32(2)(b), I now come back to the question whether the terms of the rules did require the s 32(2)(b) point to be pleaded.
In my opinion the defendant's reliance on s 32(2)(b) of the SCA is a matter which the defendant alleges makes the plaintiff's claim for interest after 24 April 2012 pursuant to s 32(1) of the SCA on the rent and other money that was payable by the defendant under the Lease as at 24 April 2012 not maintainable. It is also my opinion that the defendant's reliance on s 32(2)(b) is a matter which, given that it has not been pleaded, can be said to have taken the plaintiff by surprise. I am therefore persuaded that the defendant was required by O 20 r 9(1)(a) and O 20 r 9(1)(b) to specifically plead in the Defence its reliance on s 32(2)(b) of the SCA in response to the plaintiff's claim for statutory pre‑judgment interest under s 32(1).
My above expressed conclusion does not, however, of itself mean that the defendant should now be prevented from contending that s 32(2)(b) of the SCA disentitles the plaintiff to claim statutory pre‑judgment interest after 24 April 2012 on the rent and other money that was payable by the defendant under the Lease as at 24 April 2012. The defendant, as the plaintiff accepts, should only be prevented from advancing its argument if its failure to plead its reliance on s 32(2)(b) has resulted in the plaintiff being materially prejudiced.
The plaintiff contends that it has been materially prejudiced by the defendant's failure to comply with its pleading obligations. The prejudice, the plaintiff argues, is that if the defendant had pleaded its reliance on s 32(2)(b) it could have approached Castilo and obtained from Castilo an assignment of Castilo's entitlement, assuming such an entitlement existed, to interest that had accrued after 24 April 2012 pursuant to cl 4.2 of the Lease on the rent and other money that was payable by the defendant to the plaintiff under the Lease as at 24 April 2012. As the plaintiff's counsel put the point, if the defendant had expressly pleaded its reliance on s 32(2)(b) the plaintiff 'could have taken steps to bring itself into a position where its entitlement to interest of some nature was not put outside its grasp.' [12] Further, and in support of the assertion that it could have obtained the relevant assignment from Castilo, the plaintiff points to the fact that on 20 May 2018, that is, after the conclusion of the trial but before I delivered the primary reasons, the plaintiff did procure the execution by Castilo of a Deed of Assignment by which Castilo assigned to the plaintiff the right to receive rent and other money that was payable by the defendant to the plaintiff under the Lease as at 24 April 2012.[13]
[12] ts 447, 18 April 2019.
[13] On 26 July 2018 after the trial had concluded but before I had delivered the primary reasons the plaintiff made an application to reopen its case for the purpose of tendering the Deed of Assignment. The plaintiff obtained the Deed of Assignment and made the application to reopen its case for the purpose of tendering the Deed in an attempt to bolster its position advanced at trial that cl 6.9(b)(1) of the General Conditions did effect a valid assignment by Castilo to the plaintiff of the rent and other money that was payable by the defendant to the plaintiff under the Lease as at 24 April 2012. I refused the application but, as I have pointed out, ultimately accepted the argument that had been advanced by the plaintiff at trial and found that cl 6.9(b)(1) did effect a valid assignment by Castilo to the plaintiff of the rent and other money that was payable by the defendant to the plaintiff under the Lease as at 24 April 2012.

The plaintiff's argument is premised on the basis that I find, contrary to the argument that it advances in relation to further question 2(b) which I address below, that Castilo did and does have an entitlement to interest that accrued after 24 April 2012 pursuant to cl 4.2 of the Lease on the rent and other money that was payable by the defendant to the plaintiff under the Lease as at 24 April 2012.
I do not accept the plaintiff's argument for two reasons.
First, the plaintiff was at all times aware from the Defence that the defendant was disputing that cl 6.9(b)(1) effected an assignment of anything at all by Castilo to the plaintiff. Therefore, it necessarily follows that the plaintiff was at all times on notice of the fact that the defendant denied that the plaintiff was entitled to interest whether under cl 4.2 of the Lease or pursuant to s 32(1) for any period, including from 24 April 2012. Accordingly, it is in my view not now open for the plaintiff to assert that in the absence of an expressly pleaded reliance by the defendant on 32(2)(b) it had no notice of the asserted need for it to obtain from Castilo an assignment of Castilo's entitlement (if any) to interest that had accrued after 24 April 2012 pursuant to cl 4.2 of the Lease on the rent and other money that was payable by the defendant to the plaintiff under the Lease as at 24 April 2012.
Second, and for the reasons I give below in dealing with further question 2(b), I do not in any event accept that Castilo had an assignable entitlement to interest that had accrued after 24 April 2012 pursuant to cl 4.2 of the Lease on the rent and other money that was payable by the defendant to the plaintiff under the Lease as at 24 April 2012. In my view, the plaintiff's asserted prejudice is illusory.
I do not consider that the plaintiff has been materially prejudiced in some way that it has not identified as a result of the defendant's failure to comply with its pleading obligations. Even if the defendant had expressly pleaded its reliance on s 32(2)(b) the plaintiff would not have run the trial any differently to the way in which it did. Further, the failure by the defendant to plead its reliance on s 32(2)(b) in no way prejudiced the plaintiff's ability to fully and properly argue the point at the hearing.
In the absence of the plaintiff having been materially prejudiced by the defendant's failure to comply with its pleading obligations by expressly pleading its reliance on s 32(2)(b), I do not consider that the defendant should now be precluded from advancing its argument that the section precludes the plaintiff from claiming statutory pre-judgment interest under s 32(1).
For the reasons I have given, my answer to the question posed is 'yes'.

Question 2(b): If question 2(a) is answered in the affirmative, does s 32(2)(b) of the Supreme Court Act 1935 (WA) disentitle the plaintiff to statutory interest after 24 April 2012 on amounts where interest was payable under cl 4.2 of the Lease prior to 24 April 2012?

The purpose of s 32(1) of the SCA is to compensate a plaintiff for the loss or detriment which they have suffered by being kept out of their money during the relevant period.[14]
[14] Grincelis v House [2000] HCA 42; (2000) 171 CLR 657 [16]; St Barnabas Nominees Pty Ltd v Stallard Corp Pty Ltd (No 2) [2011] WASC 289 [S] [11].
Section 32(2)(b) of the SCA operates to exclude the operation of s 32(1) in relation to a debt upon which interest is payable as of right by virtue of an agreement. The purposes of s 32(2)(b) are relatively obvious: first, to avoid a plaintiff receiving double interest, that is, once as of right and once under s 32(1); second, to ensure that the plaintiff remains entitled to interest that is payable as of right; third, to prevent a plaintiff recovering under s 32(1) interest at a higher rate than what they were entitled to as of right.
The plaintiff contends that as I have found that the plaintiff was not, after 24 April 2012, entitled to be paid interest under cl 4.2 of the Lease, there is, after 24 April 2012, no relevant right to interest that can attract the operation of s 32(2)(b) and disentitle the plaintiff to an award of statutory pre-judgment interest under s 32(1) for the period after 24 April 2012.
The defendant puts forward two arguments in support of its contention that s 32(2)(b) does disentitle the plaintiff to statutory pre‑judgment interest after 24 April 2012 on amounts on which interest was payable under cl 4.2 of the Lease up until 24 April 2012. I will deal with each of the arguments in turn.
The first of the defendant's arguments may be summarised as follows.
On and from 24 April 2012 Castilo became the lessor under the Lease and was vested with all rights, liabilities and obligations of the plaintiff under the Lease as a result of the combined effect of s 77 and s 78 of the Property Law Act 1969 (WA) and s 82(1A), s 83(1) and s 228 of the Transfer of Land Act 1893 (WA).[15] By virtue of cl 6.9(b)(1) of the General Conditions, upon settlement Castilo assigned to the plaintiff the right to receive the unpaid rent and other money payable under the Lease as at 24 April 2012.[16] However, this does not mean that the right to receive interest on the amounts payable by the defendant under the Lease as at 24 April 2012 ceased as at that date. Rather, on and from 24 April 2012 the right to receive interest from the defendant on the amounts payable by the defendant was a right that vested in Castilo. Consequently, the amounts that were payable by the defendant to the plaintiff under the Lease as at 24 April 2012 were still, after 24 April 2012, 'debts upon which interest is payable as of right' within the meaning of s 32(2)(b) of the SCA notwithstanding that the right to receive the interest from the defendant was a right that vested in Castilo and not the plaintiff. The language of s 32(2)(b) of the SCA does not permit a reading such that the provision only applies to debts upon which interest is payable to the party that seeks an order under s 32(1) of the SCA. Accordingly, the court does not have any discretion to award to the plaintiff statutory pre-judgment interest on the closing balance of rent and other money payable by the defendant under the Lease as at 24 April 2012 for the period 25 April 2012 onwards.
[15] Primary reasons [28].
[16] Primary reasons [43], [62].
I do not accept the defendant's above summarised argument. The right to receive rent and other money that was payable by the defendant under the Lease as at 24 April 2012 was, by virtue of cl 6.9(b)(1), assigned by Castilo to the plaintiff on that date. Therefore, as at 24 April 2012 the rent and other money payable by the defendant under the Lease was not a debt owing to Castilo but rather a debt owing to the plaintiff. It necessarily follows, in my view, that there was no right in Castilo to claim interest under cl 4.2 of the Lease from 25 April 2012 on the rent and other money that was payable by the defendant under the Lease as at 24 April 2012. There was no debt owing to Castilo under the Lease and consequently no right to claim interest under cl 4.2 of the Lease.
I note in relation to the defendant's above summarised argument that during the course of his submissions the defendant's counsel sought to derive support for the argument from my findings in the primary reasons that:
1.the monthly instalments for the Tenant's Outgoings based on the Estimate for the year ended 30 June 2011 (the monthly instalments) were as at 24 April 2012 amounts that were payable by the defendant to the plaintiff under the Lease;
2.that the right to receive the payments of the monthly instalments was therefore assigned by Castilo to the plaintiff pursuant to cl 6.9(b)(1) of the General Conditions;
3.that the obligation of the plaintiff under cl 5.6 of the Lease to prepare the Outgoings Statement for the year ended 30 June 2011 (the Outgoings Statement) passed to Castilo on Castilo becoming the registered proprietor of the property; and
4.from that point onwards the defendant had the ability to enforce against Castilo not only the obligation to provide the Outgoings Statement but also, if necessary, the obligation to make any refund payment under cl 5.7 of the Lease.[17]
[17] Primary reasons [78] ‑ [80].
The defendant's counsel argued that the asserted right of Castilo to receive interest under cl 4.2 of the Lease from 25 April 2012 in respect of the rent and other money that was payable by the defendant under the Lease as at 24 April 2012 despite the fact that the right to receive the rent and other money had been assigned to the plaintiff, was analogous with Castilo remaining liable to provide the Outgoings Statement and, if necessary, make any refund payment under cl 5.7 despite the fact that the right to receive the monthly instalments had been assigned to the plaintiff.
In my view the two situations are not at all analogous. The obligation imposed on Castilo to provide the Outgoings Statement and to make any necessary payment under cl 5.7 arose from the relevant clauses of the Lease (clauses 5.5 to 5.8) read in light of the assignment effected by cl 6.9(b)(1). There is no basis in the terms of the Lease for finding that Castilo had a right to claim interest under cl 4.2 of the Lease from 25 April 2012 on monies that were not, as a result of the assignment effected by cl 6.9(b)(1) on 24 April 2012, payable to it by the defendant under the terms of the Lease.
I turn to the defendant's second and alternative argument which the defendant's counsel termed the 'temporal' argument. The argument may be summarised as follows.
The amounts that were payable by the defendant under the Lease as at 24 April 2012 were distinct debts upon which interest accrued from time to time as it became due in accordance with cl 4.2 of the Lease up until 24 April 2012. On 24 April 2012 cl 6.9(b)(i) of the General Conditions effected an assignment from Castilo to the plaintiff of the rent and other money that was payable under the Lease as at 24 April 2012.[18] Therefore, the amounts payable were debts 'upon which interest is payable as of right' by virtue of cl 4.2 of the Lease within the meaning of s 32(2)(b) with the result that the defendant is not entitled to any pre‑judgment interest on those amounts for the period after 24 April 2012 pursuant to s 32(1) of the SCA. In other words, the fact that the plaintiff no longer had the right to claim interest under cl 4.2 of the Lease after 24 April 2012 does not take the situation outside the wording of s 32(2)(b).
[18] Primary reasons [62].
The defendant points in support of its argument to the decision of Bryson J in Bans Pty Ltd v Ling.[19] This was a case concerned with s 94(1) and s 94(2)(b) of the Supreme Court Act 1970 (NSW). At the time of the decision in Bans v Ling s 94(1) and s 94(2)(b) were in identical terms to s 32(1) and s 32(2)(b) respectively of the SCA.
[19] Bans Pty Ltd v Ling (1995) 36 NSWLR 435.
The litigation in Bans v Ling arose out of a claim by the plaintiff for payment of rent and other monies by a company in accordance with the terms of a commercial lease entered into between the plaintiff as lessor and the company as lessee. The action was brought by the plaintiff against the company's directors. The plaintiff was successful. Having obtained judgment the plaintiff sought an award of interest against the directors under s 94(1) from the date that the company had been wound up (19 October 1990) until the date of judgment. The issue that Bryson J was required to consider as a result of the plaintiff's claim for interest against the directors was whether the plaintiff was precluded by s 94(2)(b) from being awarded the statutory interest sought.
Bryson J held that the plaintiff was precluded by s 94(2)(b) from claiming statutory interest against the directors for the period from the date that the company had been wound up until the date of judgment. His Honour expressed his reasons for arriving at his conclusion in the following terms:[20]
As my reasons show, I allowed recovery against the directors not only of unpaid rent but also of interest which accrued due by the company in accordance with the terms of the lease until the winding up. I would not allow interest under s 94 on that part because allowance of interest upon interest is expressly forbidden by subs (2)(a).
It was contended that I do not have power under s 94 to award statutory interest on the unpaid rent because of the operation of subs (2)(b).
In applying subs (2)(b) to the facts with appropriate accuracy, the obligation imposed on directors by s 556 of the Companies (New South Wales) Code to be jointly and severally liable with the company for the payment of rent created a series of debts which arose each month when an instalment of rent became due. The liability of a director under s 556 for each instalment of rent which fell due before the winding up order is a debt upon which interest is payable as of right by the director by the operation of s 556, and I have awarded that interest to the plaintiff…It is literally and actually true of instalments of rent which fell due before October 1990 that interest is payable on them; this is no less true because interest is only payable by directors under s 556 up to 19 October 1990, while in accordance with the lease the company's liability for interest continued thereafter. Subsection (2) does not state that s 94 does not apply in relation to periods for which interest is payable; it says that s 94 does not apply in relation to any debt upon which interest is payable, meaning literally and also in substance any debt upon which interest is payable in respect of any period at all. The language used does not admit of reading subs (2) down or reading subs (1) up so that s 94 applies in respect of periods during which interest is not payable as of right on a debt but does not apply in respect of periods during which interest is payable as of right on that debt (emphasis added).
However, the directors are also subject to liability under s 556 on a long series of instalments of rent which fell due after 19 October 1990 but before 30 November 1992. Each of those instalments is a debt of the company upon which interest is payable as of right by virtue of the terms of the lease, but the liability imposed by s 556 on a director does not create a debt of the director upon which interest is payable as of right by the director.
What then is the operation of s 94 having regard to the provisions of subs (2)(b) where a director is liable for a debt upon which interest is payable as of right by virtue of an agreement by someone other than the director, although no interest is payable by that director upon that debt? It is to be observed that the company, by which interest is payable as of right upon the instalment of rent, is under s 556(1) jointly and severally liable with the director for the instalment; it would be inaccurate to treat the liability of the director for the instalment as a different debt to the liability of the company, they are jointly and severally liable for the same instalment. On each instalment falling due after the winding up interest is payable as of right by virtue of the lease, but it is payable by the company and not by the director.
In my opinion nothing in s 94 shows an intention that the exclusion effected by subs (2)(b) should apply only where interest is payable upon the debt by the defendant against whom judgment is given, the literal meaning is indifferent to whether or not interest is payable by the defendant against whom judgment is given, and s 94 does not apply, on a literal reading, even though interest is payable only by someone else. I see no absurdity or anomaly which would make me hesitate to apply the literal reading; the legislature could well have decided that if there is some other entitlement to interest, no matter regards to whom that entitlement lies, there would be no additional entitlement under the statute.
[20] Bans v Ling (436 ‑ 437).
It is the above quoted italicised statements made by Bryson J that the defendant places particular reliance on. However, it is, I think, relevant to note that these statements made by his Honour were obiter. The ratio of his Honour's decision was that no interest could be awarded under s 94(1) against the directors on instalments of rent falling due after the winding up of the company because the company was liable as of right for interest on those instalments. That is, interest was payable as of right within the meaning of s 94(2)(b) even though it was not payable as of right by the directors. Thus the situation in Bans v Ling was different to the present case in that in the present case, bearing in mind my rejection of the defendant's first argument, no person (not the defendant or any other person) is liable to pay to the plaintiff (or any other person) interest under cl 4.2 of the Lease from 25 April 2012 on the amounts payable by the defendant under the Lease as at 24 April 2012.
I note that following and in response to the decision of Bryson J in Bans v Ling s 94(2)(b) was, by the Courts Legislation Amendment Act 1996 (NSW), repealed and replaced with a provision in the following terms:[21]
(b)authorise the giving of interest on any debt in respect of any period for which interest is payable as of right, whether by virtue of an agreement or otherwise, … .[22]
[21] The amendment was made so as to make clear that interest could be awarded under s 94(2)(b) in circumstances where an agreement provided for interest to be payable but where the agreement was no longer operable: New South Wales, Parliamentary Debates, Legislative Council, 17 October 1996, [4.22].
[22] Section 94 of the Supreme Court Act 1970 (NSW) has since been repealed. The current equivalent section, which is in substantially similar albeit not identical terms to the repealed section 94 as amended by the Courts Legislation Amendment Act 1996 (NSW), is s 100 of the Civil Procedure Act 2005 (NSW). Section 100(3)(b) of the Civil Procedure Act 2005 is in identical terms to s 94(2)(b) of the Supreme Court Act 1970 as amended by the Courts Legislation Amendment Act 1996.
Obviously s 32(2)(b) of the SCA has not been amended. It remains in the form that the equivalent NSW provision was in at the time of the decision in Bans v Ling.
The point of construction which the defendant's argument gives rise to has not, to the best of my knowledge, been dealt with by a decision of a judge in this state. Certainly, counsel for the parties were not able to refer me to any such decision.
Even bearing in mind that the relevant statements made by Bryson J were obiter I should be slow, for reasons of judicial comity,[23] not to follow and adopt his Honour's interpretation of s 94(2)(b) of the Supreme Court Act 1970 (NSW) in construing s 32(2)(b) of the SCA. That is, I should in light of his Honour's decision be slow not to find that s 32(2)(b) of the SCA precludes a claim for interest under s 32(1) even though the period for which interest was payable as of right, whether by the defendant against whom judgment is given or some other person, has come to an end.
[23] La Macchia v Minister for Primary Industries & Energy (1992) 110 ALR 201, 204; Mustac v Medical Board of Western Australia [2007] WASCA 128 [38] - [46]; Undershaft (No 1) Ltd v Federal Commissioner of Taxation [2009] FCA 41; (2009) 175 FCR 150 [68] - [88].
Even allowing for considerations of judicial comity I am positively persuaded that I should not follow and adopt Bryson J's interpretation of s 94(2)(b) in construing s 32(2)(b). In my respectful opinion his Honour's interpretation of the section fails to give effect to the use of the word 'is' in the section. It is a debt upon which interest is payable, not is or was payable, as of right whether by virtue of an agreement or otherwise to which s 32(1) of the SCA is not applicable. The use of the word 'is' introduces a temporal element, the present tense. If the period for which interest is payable on the debt as of right, whether by the defendant against whom judgement is given or some other person, has come to an end it cannot, in my view, be said that interest is payable on the debt as of right within the meaning of s 32(2)(b).

I note that my interpretation of s 32(2)(b) is consistent with the above referred to purposes of the section as well as the above referred to purpose of s 32(1).
It follows that I do not accept the defendant's temporal argument. I do not accept that the fact that the amounts that were payable by the defendant under the Lease as at 24 April 2012 were debts upon which interest was payable as of right up until 24 April 2012 means that s 32(2)(b) precludes the plaintiff from claiming statutory pre‑judgment interest on these amounts after 24 April 2012.
For the reasons that I have given my answer to the question posed is 'no'.

Question 4: Does any interest which accrues under cl 4.2 of the Lease on the legal costs recoverable by the plaintiff pursuant to cl 4.1(c) of the Lease commence on:

(a) the date the plaintiff incurred a liability to pay such costs upon receipt of an invoice by the plaintiff's solicitors;

(b) the date the plaintiff paid such costs to their legal representatives; or

(c) the date the plaintiff made any demand for the payment of such costs from the defendant?

One of the questions posed for my determination at the trial (question 11) was whether the plaintiff is entitled to recover from the defendant its legal costs as costs of remedying, or attempting to remedy, defaults by the defendant pursuant to cl 4.1(c) of the Lease. Despite the wording of the question the plaintiff's counsel made clear in his opening address at the trial that the only legal costs that the plaintiff was seeking to recover under cl 4.1(c) of the Lease were 'the costs of pursuing these proceedings.'[24] The arguments advanced at trial were directed not at whether legal costs were as a matter of principle recoverable pursuant to cl 4.1(c) of the Lease, but rather whether the plaintiff was, in the absence of evidence particularising or quantifying the legal costs it had allegedly incurred, permitted to claim and recover costs pursuant to cl 4.1(c).[25] In any event, my answer to the question posed was that the plaintiff is entitled under cl 4.1(c) to recover from the defendant the legal costs for which it is liable and which it properly incurred up until 24 April 2012 in pursuing, by way of the counterclaim filed on 3 February 2012, these proceedings for the purpose of remedying the defendant's default in failing to pay to the plaintiff the outgoings that I had found in answering an earlier question (question 5) are, subject to cl 7 to c 10 of the Compromise Agreement, payable to the plaintiff (the Legal Costs). [26]
[24] Primary reasons [478].
[25] Primary reasons [481] ‑ [482].
[26] Primary reasons [492].
Clause 4.1(c) of the Lease provides:
The Tenant must pay the Landlord, or as the Landlord directs:
…
(c)the reasonable cost to the Landlord of remedying, or attempting to remedy, a default by the Tenant;
…
Clause 4.2 of the Lease provides:
The Tenant must pay interest on any moneys payable under this clause 4 at the Interest Rate when payment is more than fourteen (14) days overdue, calculated from the due date to the date of payment, and whether or not the payment has been formally demanded or not (sic).
Accordingly, the further question is directed at what is meant by the term 'due date' in cl 4.2 of the Lease in relation to any interest payable on the Legal Costs. The term 'due date' is not defined in the Lease.
It is convenient to commence consideration of this question by dealing first with the third of the possible 'due dates' specified in the question, that is, the date the plaintiff made any demand for payment.
The plaintiff submits that the 'due date' for payment of the Legal Costs within the meaning of cl 4.2 cannot be the date on which it made any demand for payment of the Legal Costs. In support of this submission the plaintiff makes two points. First, that neither cl 4.1(c), cl 4.2, nor any other clause of the Lease requires a demand for payment of the Legal Costs to be made to enliven the defendant's liability to pay the Legal Costs or for any interest on the Legal Costs to commence accruing. Second, cl 4.2 of the Lease specifically provides that interest is payable on the Legal Costs whether or not payment of the Legal Costs has been formally demanded.
The defendant, for its part, does not really attempt to contend that the 'due date' is the date on which the plaintiff made any demand for payment of the Legal Costs.
I accept the plaintiff's submission. In my opinion it cannot be said that the 'due date' only comes into existence once the Landlord makes a formal demand for the payment of an amount recoverable under cl 4.1(c). The reason for this is that cl 4.2 expressly provides that the Tenant has to pay the interest calculated from the due date to the date of payment 'whether or not the payment has been formally demanded or not (sic)'. In other words, the making of a formal demand for an amount that is payable under cl 4.1(c) is not, under cl 4.2, a pre‑condition to the creation of the obligation to pay interest on that amount.
I turn then to the first two options posed by the question.
The plaintiff submits that the 'due date' for payment of the Legal Costs must be when it came under a liability to pay the costs, that is, when it received each relevant invoice from its solicitors.
The defendant, subject to the issue of notification to which I will refer further below, submits that the due date cannot be a date any earlier than the date on which the plaintiff actually paid the Legal Costs.
In dealing with these competing contentions the legal principles relating to the construction of the terms of a contract, to which I referred in the primary reasons, must be borne in mind.[27] The overarching principle in this regard is that the construction of the terms of a contract is to be undertaken objectively by reference to the contract's text, context and purpose.[28]
[27] Primary reasons [124] ‑ [125].
[28] Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 [35]; Simic v New South Wales Land and Housing Corporation [2016] HCA 47; (2016) 339 ALR 200 [78]; Victoria v Tatts Group Ltd [2016] HCA 5; (2016) 328 ALR 564 [51]; Black Box Control Pty Ltd v Terravision Pty Ltd [2016] WASCA 219 [42].
Clause 4.1(c) imposes an obligation on the Tenant to pay to the Landlord 'the reasonable cost to the Landlord' of remedying or attempting to remedy a default by the Tenant. Clause 4.2 imposes an obligation on the Tenant to pay interest on the moneys payable under cl 4.1(c), that is, on the reasonable cost to the Landlord of remedying, or attempting to remedy, a default by the Tenant, when payment of those costs is more than 14 days overdue calculated from the due date to the date of payment. Accordingly, if the interpretation of the term 'due date' contended for by the plaintiff is correct, namely that the due date is the date on which the Landlord becomes liable to pay the cost of remedying, or attempting to remedy, the relevant default as opposed to the time at which the Landlord actually pays the cost of remedying, or attempting to remedy, the default the result is that the Tenant may become liable to pay interest to the Landlord on a sum of money that has not actually been paid out by the Landlord. This would, it seems to me, be a commercially odd result and not one which reasonable persons in the position of the parties would ordinarily be expected to have intended. Further, there are no other clauses in the Lease that point to the correctness of the interpretation contended for by the plaintiff. In these circumstances, it is my view that the 'due date' in cl 4.2 cannot be a date that is any earlier than the date on which the Landlord actually pays the cost of remedying, or attempting to remedy, the relevant default by the Tenant. Therefore, applying this interpretation to the factual dispute in the present case, the 'due date' for the payment of the Legal Costs cannot be any earlier than the date on which the plaintiff actually paid the Legal Costs to its legal representatives.
The question that remains, which is not readily apparent from the terms of the question posed by the parties but which both parties joined issue on, is whether the 'due date' within the meaning of cl 4.2 for the payment of the costs specified in cl 4.1(c) does not come into existence until the Landlord gives notice to the Tenant that it has paid the costs (as opposed to the Landlord making a formal demand of the Tenant for payment of the costs).
It is common ground between the parties that there is no clause in the Lease which expressly provides that the due date for the payment of the costs specified in cl 4.1(c) does not come into existence until the Landlord gives notice to the Tenant that it has paid the costs. Clause 4.5 of the Lease imposes an obligation on the Landlord to provide the Tenant with a tax invoice in respect of any 'supply' by the Landlord to the Tenant on or before the due date for payment of the consideration for the supply. However, as the plaintiff asserts, and as the defendant accepts, the 'supply' referred to in the cl 4.5 carries the meaning given to this term by the goods and services tax legislation[29] with the result that the reasonable cost to the Landlord of remedying, or attempting to remedy, a default by the Tenant is not a 'supply' within the meaning of the clause. Accordingly, cl 4.5 cannot be said to impose any obligation on the Landlord to give notice to the Tenant by provision of a tax invoice that it has paid the costs specified in cl 4.1(c), that is, the costs of remedying, or attempting to remedy, a default by the Tenant.
[29] A New Tax System (Goods and Services Tax) Act 1999 (Cth).
The defendant's submission is that on the proper construction of cl 4.1(c) and cl 4.2 the 'due date' within the meaning of cl 4.2 for the payment of the costs specified in cl 4.1(c) is the date on which the Landlord gives some form of notice to the Tenant of its actual payment of the costs. In support of this submission the defendant contends as follows.
First, that if the term 'due date' is not construed in the manner for which it contends the result is that the Tenant may become liable to pay interest on the amount that the Landlord has paid in order to remedy, or attempt to remedy, a default without knowing that it is liable to pay such an amount by reason of the amount having been paid by the Landlord, without knowing the quantum of the amount payable, and without knowing that because it has not made the payment within 14 days of the 'due date' interest is accruing on the amount.
Second, cl 4.2 only absolves the Landlord from having to make a formal demand for payment of the costs specified in cl 4.1(c). If it was the intention of the parties that the Tenant could become liable to pay interest on an amount payable by the Tenant under cl 4.1(c) (or any other sub‑clause of cl 4.1) in the absence of some form of notification being given by the Landlord to the Tenant that it had actually paid that amount, cl 4.2 could have simply referred to a demand as opposed to a formal demand. The reference to a formal demand in cl 4.2 serves to make clear that any form of informal notification by the Landlord that it has paid the costs specified in cl 4.1(c) is sufficient to establish the 'due date' for payment within the meaning of the clause.
Third, to construe the 'due date' as the date on which the Landlord gives some form of notice to the Tenant of its actual payment of the costs specified in cl 4.1(c) accords with the 'appropriate commercial reality of the situation.'[30]
[30] ts 467 ‑ 468, 18 April 2019.
The plaintiff's submission is that there is no proper basis for construing the term 'due date' within the meaning of cl 4.2 as the date on which the Landlord gives some form of notice to the Tenant of its actual payment of the cost specified in cl 4.1(c). In support of this submission the plaintiff advances the following contentions.
First, the defendant's argument involves reading into the Lease words that do not actually appear in the Lease (which is something the defendant necessarily accepts). More specifically, cl 4.1(c) does not provide that the Tenant must pay to the Landlord the reasonable cost to the Landlord of remedying, or attempting to remedy, a default by the Tenant and in respect of which the Landlord has given some form of notice to the Tenant.
Second, no support for the defendant's argument can be found in the text of the Lease.
Third, the obligation imposed on the Tenant to pay the cost to the Landlord specified in cl 4.1(c) is not conditioned on the Landlord making any demand of the Tenant for payment of the cost. To the contrary, the making of a demand is expressly excluded as a trigger for the coming into existence of the Tenant's obligation to pay such cost.
Fourth, in the circumstance where the Landlord has incurred the type of cost specified in cl 4.1(c), cl 4.2 only has work to do as a result of a default by the Tenant. A blameless Tenant is not going to suffer the problems pointed to by the defendant.
Fifth, given that the Tenant is the 'wrongdoing party' in the sense that it has defaulted under the Lease, and given that the Tenant must be presumed to know that it has defaulted under the Lease, there is an obligation on the Tenant, in the 'unlikely event'[31] that the Landlord chooses to stay silent about having paid the cost of remedying, or attempting to remedy, the default, and if it wishes to avoid the possibility of being required to pay interest, to inquire of the Landlord whether there is a cost that it has to pay.
[31] ts 461, 18 April 2019.
Sixth, it 'may well be'[32] that the plaintiff and the defendant entered into the Lease on the assumption that if the plaintiff became entitled to the payment of the cost specified in cl 4.1(c) it would ask the defendant for the payment of the cost. It is 'quite possible'[33] that neither the plaintiff nor the defendant turned their minds to the possibility that the plaintiff would incur the type of cost specified in cl 4.1(c) and not ask to be reimbursed for the cost.
[32] ts 462, 18 April 2019.
[33] ts 462, 18 April 2019.
Seventh, the possibility in the 'ordinary run of commercial leases of this nature' that the Landlord would not seek from the Tenant reimbursement of costs that it had paid in remedying, or attempting to remedy, a default by the Tenant is 'remote'.[34]
[34] ts 463, 18 April 2019.
It is necessary, I think, in dealing with the parties' competing contentions to make two, perhaps self‑evident, points at the outset.
First, the 'due date' within the meaning of cl 4.2 must be construed by reference to the terms of the particular subclause within cl 4.1 pursuant to which the Tenant is required to pay the Landlord money. Accordingly, it cannot be assumed that the 'due date' within the meaning of cl 4.2 for the payment of the cost specified in cl 4.1(c) will also be the 'due date' for the payment of the cost specified in another subclause of cl 4.1.
Second, in interpreting the term 'due date' within the meaning of cl 4.2 it is necessary to take account of the nature of the obligation that the clause imposes on the Tenant.
The obligation that cl 4.2 imposes on the Tenant in the context of the Landlord having paid the cost specified in cl 4.1(c) is to pay interest on any amount that is payable by it under cl 4.1(c) calculated from the 'due date' if payment of the amount payable is made more than 14 days after the 'due date'. Clause 4.2 is, in effect, a penalty type provision. If the Tenant does not pay the amount that it is required to pay under cl 4.1(c) within 14 days of that amount becoming payable, it then incurs the penalty of having to pay in addition to the amount payable interest on that amount at the Interest Rate calculated from the date on which the amount became payable in order to compensate the Landlord for being kept out of its money for more than what is a reasonable period of time. This being the case it seems to me that the only commercially sensible interpretation of the term 'due date' within the meaning of cl 4.2, in the context of the Landlord having paid the cost specified in cl 4.1(c), is the date on which the Landlord gives notice, by whatever means, of the fact that it has actually paid the cost specified in cl 4.1(c). If the position is that the 'due date' for the payment of the cost specified in cl 4.1(c) is simply the date on which the Landlord actually paid the cost the Tenant, as the defendant points out, might find itself liable to pay the penalty, namely interest, on an amount that it did not even know that it had become liable to pay. This cannot, in my view, have been what the parties intended; it could not be what a reasonable person would have understood the term 'due date' to mean in circumstances where the amount payable is the cost specified in cl 4.1(c). Indeed, the sixth and seventh of the plaintiff's above referred to contentions would appear to acknowledge this to be the case.
My above expressed conclusion should not be taken as indicating that the term 'due date' in cl 4.2 must necessarily be construed as importing a notification requirement when the application of the clause is being considered in a situation where the money payable by the Tenant to the Landlord is payable not under cl 4.1(c) but rather under one of the other sub-clauses of cl 4.1. In the case of other amounts that are specified to be payable by the Tenant in cl 4.1 (for example, rent under cl 4.1(a) and Outgoings and services under cl 4.1(b)), the amount payable and the due date for payment is in effect specified within other clauses of the Lease. Therefore, in the case of such payments the Tenant is necessarily aware of the amount that has to be paid and the 'due date' for the payment in the absence of any notification by the Landlord and, for that matter, in the absence of a tax invoice for the supply issued pursuant to cl 4.5. Thus in such a situation the term 'due date' in cl 4.2 will not need to be construed as incorporating any notification requirement. In other words, my interpretation of the term 'due date' in cl 4.2 is confined to the situation where the amount payable by the Tenant is an amount payable by reason of cl 4.1(c).
In arriving at my above conclusion I am conscious that cl 4.2 provides that the Tenant must pay interest on the moneys payable whether or not payment has been formally demanded by the Landlord. However, in my opinion the reference in the clause to a 'formal demand' is not a sufficient basis for construing the 'due date' in the context of cl 4.1(c) as not incorporating any form of notification requirement at all.
As to the other contentions advanced by the plaintiff in support of its primary submission as to the appropriate construction of the term 'due date', I make the following points.
First, it is of course the case that the Lease does not expressly state that the 'due date' within the meaning of cl 4.2 is the date on which the Landlord gives notice of the fact that it has paid the cost specified in cl 4.1(c). However, and as the plaintiff acknowledged in its submissions, the Lease does not provide any express guidance at all on how to construe the term 'due date'. The term is not defined. The construction of the term must therefore be undertaken by reference to the context and purpose of the relevant clauses. [35]
[35] Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [35]; Simic v New South Wales Land and Housing Corporation [78]; Victoria v Tatts Group Ltd [51]; Black Box Control Pty Ltd v Terravision Pty Ltd [42].
Second, although it may be presumed that a defaulting Tenant will know that it has defaulted under the Lease, there is no basis for presuming that it will always know, in the absence of some form of notification, that the Landlord has incurred a cost in remedying, or attempting to remedy, the default.

Third, I do not accept that because in the case of cl 4.1(c) it is the 'wrongdoing' of the Tenant that potentially brings cl 4.2 into play that the term 'due date' should be construed in the way contended for by the plaintiff. Clause 4.2 is not concerned with the wrongdoing of the Tenant in defaulting under the Lease, but rather the 'wrongdoing' of the Tenant in failing to pay to the Landlord within a reasonable period of time the cost incurred by the Landlord in remedying, or attempting to remedy, the default. Therefore, to construe the term 'due date' by reference to the fact of the Tenant's 'wrongdoing' in defaulting under the Lease would not, in my view, be to construe the clause by reference to the context and purpose of cl 4.2.
For the reasons that I have given, in my opinion the 'due date' within the meaning of cl 4.2 for the payment of the cost specified in cl 4.1(c) cannot come into existence until the Landlord has actually paid the cost and is the date on which the Landlord gives to the Tenant notice by any means (whether formally or informally) that it has paid the cost.
It follows that my answer to the question posed is that interest does not accrue under cl 4.2 of the Lease on the Legal Costs recoverable by the plaintiff pursuant to cl 4.1(c) of the Lease unless:
1.the Legal Costs have been paid by the plaintiff;
2.the plaintiff has notified the defendant by any means (whether formally or informally) that it has paid the Legal Costs; and
3.the defendant has not paid the Legal Costs within 14 days of the date on which the plaintiff notified the defendant that it had paid the Legal Costs, in which case the interest is calculated from the date on which the plaintiff notified the defendant that it had paid the Legal Costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CP
Associate to the Honourable Justice Derrick
9 MAY 2019