Ceccon Transport Pty Ltd & Ors v Tomazos Group Pty Ltd (No 2)

[2017] NTSC 55

CITATION:Ceccon Transport Pty Ltd & Ors v Tomazos Group Pty Ltd (No 2) [2017] NTSC 55

PARTIES:CECCON TRANSPORT PTY LTD (ACN 009 595 911)

and

CECCON, Suzanne Yoko

and

CECCON, Antonio

and

TOMAZOS GROUP PTY LTD (ACN 009 618 704)

and

TOMAZOS GROUP PTY LTD (ACN 009 618 704)

and

TOMAZOS TRANSPORT PTY LTD (ACN 159 500 857)

and

CECCON TRANSPORT PTY LTD (ACN 009 595 911)

and

CECCON, Antonio

and

CECCON, Suzanne Yoko

TITLE OF COURT:  SUPREME COURT OF THE NORTHERN TERRITORY

JURISDICTION:  SUPREME COURT OF THE NORTHERN TERRITORY EXERCISING TERRITORY JURISDICTION

FILE NO:No 108 of 2014 (21451042)

DELIVERED ON:  24 July 2017

DELIVERED AT:  Darwin

WRITTEN SUBMISSIONS:              19 April 2017, 11 May 2017, 24 May 2017, 5 June 2017 and 7 June 2017

JUDGMENT OF:  HILEY J

CATCHWORDS:

CIVIL LAW - PROCEDURE – Supreme Court Procedure - Practice Direction No. 6 of 2009 – Defendant’s failure to comply with Practice Direction No. 6 of 2009 caused delay and unnecessary costs to be incurred by plaintiffs and prevented proper consideration of an appropriate resolution of the proceedings – Defendants ordered to pay costs on an indemnity basis

CIVIL LAW – PROCEDURE – Discovery - Failure to give proper discovery prolonged the dispute – Conduct falls far short of the conduct expected of a litigant properly advised in relation to the seriousness of complying with the obligation to give discovery – Indemnity costs may be allowed

CIVIL LAW - PROCEDURE – COSTS – Calderbank settlement offer made by plaintiffs - Judgment less favourable to defendants than Calderbank offer – Refusal of offer was unreasonable

INTEREST – Interest on costs – Whether a higher interest rate should be imposed where there is failure to comply with Practice Direction No. 6 of 2009

INTEREST – Interest on pre-judgment damages – Interest should be allowed at ordinary commercial rates – Where there is no evidence of relevant commercial rates a fair and reasonable rate should be applied – Prescribed post judgment rates are a useful guide

Sherwin and Sherwin v Commens and Commens [2008] NTSC 45, Applied

Colgate-Palmolive Pty Limited v Cussons Pty Limited [1993] FCA 801; 46 FCR 225, Cullen v Trappel (1979-80) [1980] HCA 10; 146 CLR 1, Edgar v Public Trustee for the NT [2011] NTSC 21, Elite Protective Personnel Pty Ltd & Anor v Salmon [2007] NSWCA 322, Groote Eylandt Aboriginal Trust Inc v Deloitte, Touche Tohmatsu (No 3) [2017] NTSC 30, Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; 13 VR 435, Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358, LO v NTA [2017] NTSC 24, Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344, SMEC Testing Services Ply Ltd v Campbelltown City Council [2000] NSWCA 323, Spadaccini v Grice [2012] NTSC 41, The Silver Fox Co Pty Ltd (No 3) (2004) 214 ALR 621, Veetemp Australasia Pty Ltd v GRD Group NT Pty Ltd [2012] NTSC 93, Referred to

Territory Sheet Metal Pty Ltd v ANZ Banking Group Limited [2010] NTSC 3, Distinguished

Michael Grant QC (ed) Civil Procedure Northern Territory (Presidian Legal Publications)

Federal Court of Australia Act 1975 (Cth) s 52(2)(a)

Federal Court Rules 2011 (Cth) 39.06

Supreme Court Rules (NT) 26.03(3), 63.74, 63.74(1), 59.02, 59.02(3)

Supreme Court Act 1979 (NT) s 85,

Northern Territory Supreme Court, Practice Direction No. 6 of 2009 Trial Civil Procedure Reforms, 11 June 2009.

REPRESENTATION:

Counsel:

Plaintiff:B Ilkovski

Defendants:M Crawley

Solicitors:

Plaintiff:Clayton Utz

Defendants:De Silva Hebron Barristers & Solicitors

Judgment category classification:    B

Judgment ID Number:  Hil1710

Number of pages:  49

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN

Ceccon Transport Pty Ltd & Ors v Tomazos Group Pty Ltd (No 2) [2017] NTSC 55

No. 108 of 2014 (21451042)

BETWEEN:

CECCON TRANSPORT PTY LTD (ACN 009 595 911)

First Plaintiff

AND:

CECCON SUZANNE YOKO

Second Plaintiff

AND:

CECCON ANTONIO

Third Plaintiff

AND:

TOMAZOS GROUP PTY LTD (ACN 009 618 704)

Defendant

AND:

TOMAZOS GROUP PTY LTD (ACN 009 618 704)

First Plaintiff by Counterclaim

AND:

TOMAZOS TRANSPORT PTY LTD (ACN 159 500 857)

Second Plaintiff by Counterclaim

AND:

CECCON TRANSPORT PTY LTD (ACN 009 595 911)

First Defendant by Counterclaim

AND:

ANTONIO CECCON

Second Defendant by Counterclaim

AND:

SUZANNE YOKO CECCON 

Third Defendant by Counterclaim

CORAM:     HILEY J

REASONS FOR JUDGMENT

(Delivered 24 July 2017)

Introduction

Applications for stay

Plaintiffs’ main submissions

Practice Direction 6 of 2009

Indemnity costs

Discovery

Settlement offer of 7 August

Interest on costs

Interest payable under the Loan Agreement

Interest on amounts found due in [213(g)]

Interest up to judgment

Orders

Introduction

1. On 31 March 2017 the Court published its reasons for decision (Reasons)[1] and invited submissions from the parties on what orders should be made consequential upon the Court’s findings and conclusions set out in the Reasons, in particular orders relating to interest and costs.

2. On 11 April the plaintiffs (Ceccon parties) provided draft orders that included the following:

   1.In respect of paragraph 213(a) of the reasons for judgment given by the Court on 31 March 2017, judgment for the Third Plaintiff against the Defendant in the amount of:

   (a)        $901,183.62; and

   (b)$221.77 per day for each day after 11 April 2017 until the amount at paragraph 1(a) above has been paid

   2.In respect of paragraphs 213(b), (c), (d), (e) and (f) of the reasons for judgment given by the Court on 31 March 2017, judgment for the First Plaintiff against the Defendant in the amount of $1,023,597.63.

   3.The Amended Counterclaim is dismissed.

3. The plaintiffs also foreshadowed written submissions in relation to:

   (a)the proper rate of interest payable on the amounts found due in paragraphs 213(b), (c), (d), (e) and (f) of the Reasons;

   (b)costs, including costs on an indemnity basis; and

   (c)interest on costs and the rate of interest.

4. The defendant and plaintiffs by Counterclaim (Tomazos parties) indicated that they:

   (a)propose to appeal against the Court’s decision, apart from the Court’s dismissal of the claim regarding the transfer of a unit;

   (b)do not agree with the plaintiffs’ calculations concerning interest on the loan, oppose an order for costs and wished to make submissions on the rate of interest otherwise payable; and

   (c)sought a stay of the question of costs and of execution of the judgment pending the outcome of the proposed appeal.

   Applications for stay on costs and stay of execution

   Stay on costs

5. On 30 May 2017 I rejected the application for a stay on the costs issue.  The main reason underlying that stay application was a contention that the submissions would involve the disclosure of confidential information such as without prejudice offers and things said and done in the course of mediation.  Tomazos contended that the disclosure of such material may be prejudicial to the foreshadowed appeal.[2]  Counsel also submitted that the fact that a successful appeal would render any costs order otiose is a relevant matter, but accepted that this is not decisive.[3]

6. Counsel for the Tomazos parties indicated that they might call evidence from Mr Maurice QC, who had conducted a mediation on 4 August 2015.  The parties agreed that they would attempt to provide the Court with a document indicating relevant matters concerning the mediation without the need for the mediator to give evidence.  However counsel for the Tomazos parties did not proceed with either of these proposals.  I indicated that I was prepared to make appropriate orders, if requested, to preserve the confidentiality of settlement discussions including settlement offers.  As matters transpired, the only disclosure that was made about such matters was the two settlement offers made by the plaintiffs, the first on 7 August 2015, three days after the unsuccessful mediation, the second on 7 March 2016, the first day of the hearing. 

7. No attempt was made to identify any possible ground of appeal.  Costs orders are part of the final orders disposing of most cases, and are often the subject of the appellate intervention.  Even if the Tomazos parties were successful on appeal it does not necessarily follow that if a costs order is made it will be quashed.  Much will depend upon the basis for the successful appeal.

8. In those circumstances I considered there was no proper reason why the matter should not be finalised in the normal way by dealing with costs now, notwithstanding the possibility of an appeal.[4] 

   Stay of execution

9. In their written submissions of 19 April 2017 the Tomazos parties stated that they understand the first plaintiff has ceased trading and that nothing is otherwise known of the financial position of the plaintiffs.  Absent any such assets, a successful appeal would be rendered nugatory if the plaintiffs had no capacity to repay the judgment.  They sought the opportunity for this issue to be addressed by affidavits and supplementary submissions.

10. In his affidavit of 10 May 2017 Mr De Silva stated that he was instructed to appeal the judgment both in respect of the claim and counterclaim.  He said:

    The Tomazos entities are concerned that if the judgment is paid and the appeal is successful, the plaintiffs may not have the capacity to repay the judgment.  Apart from the fact that Ceccon Transport Pty Ltd has ceased trading, nothing is known of the financial position of any of the plaintiffs.  Accordingly, the Tomazos entities seek a stay of the judgment on such terms as the court may deem appropriate.

11. No further affidavits were provided.  In their further submissions of 11 May 2017 the Tomazos parties simply stated that they rely upon the previous submissions.

12. In their submissions in reply, counsel for the plaintiffs referred to s 57 of the Supreme Court Act (NT) which empowers the Court or the Court of Appeal to stay the whole or part of a proceeding under a judgment appealed from where an appeal has been instituted. Subsection 57(3) provides that:

    Except as expressly provided by this section or by the Rules or any other law in force in the Territory, the institution of an appeal does not operate as a stay of execution

13. Counsel cited relevant decisions[5] and summarised the relevant factors to be considered in the discretion to grant or refuse a stay as follows:

    (a)A successful party at first instance is entitled to the “fruits of their victory”;

    (b)The onus is upon the applicant for a stay to demonstrate a reason or an appropriate case to warrant the exercise of discretion in favour of a stay;

    (c)The onus is upon the applicant for a stay to demonstrate a proper basis for a stay that will be fair to all parties;

    (d)In determining what terms will be fair to the parties, the Court will weigh considerations such as the balance of convenience and the competing rights of the parties;

    (e)This may require a condition on the grant of a stay that the applicant pay either part or whole of the judgment debt or give security for part or whole of the judgment debt to reflect a fair adjustment of the rights of the parties;

    (f)Where there is a risk that, if a stay is granted, the assets of the applicant will be disposed of the Court may, in the exercise of its discretion, refuse to grant a stay;

    (g)Where there is a risk that the appeal will prove abortive if the applicant succeeds and a stay is not granted, courts will normally exercise their discretion in favour of granting a stay; and

    (h)In considering whether to exercise their discretion to grant a stay, courts will not generally speculate about the appellant's prospects of success. However this does not prevent making some preliminary assessment about whether the appellant has an arguable case when considering the specific terms of a stay that will be appropriate fairly to adjust the interest of the parties.

14. I do not consider that the Tomazos parties have shown that a stay should be granted.  More is required than the vague concerns expressed by the Tomazos parties and their lawyers.  They have the onus of showing why a stay should be granted.  There is no evidential onus on a respondent to an application for a stay to show why it should enjoy the fruits of victory. 

15. Although it may not normally be relevant for a court to consider the prospects of an appeal against its decision succeeding, the fact that no appeal has been instituted and that the scope of a potential appeal has not been described is relevant.   This is particularly so in the present matter where a substantial part of the plaintiffs’ success on their claim is based on admissions made, albeit late, by the Tomazos parties. 

16. Counsel for the plaintiffs submitted the Tomazos parties have not explained why there is any need or imperative to protect the subject matter of the litigation where much of the judgment debt relates to admitted facts.  The Counterclaim is not a legal set off against these amounts, nor, most probably, an equitable one.  The Tomazos parties merely wish to not have to pay over anything on the speculation of an offsetting claim.  An attempt to secure such a benefit in these circumstances is totally destructive of the Ceccon parties’ legitimate interests in enjoying the fruits of victory.  The denial of the fruits of victory require appropriate conditions on the grant of a stay, and the Tomazos parties’ failure to offer any appropriate conditions is, again, a failure to discharge its onus to enliven the Court’s discretion in a proper and justified manner.

17. I agree with those contentions.  I reject the application for stay of execution.

    Plaintiffs’ main submissions

18. The Ceccon parties seek the following orders for costs and interest.

    (1)Tomazos Group Pty Limited and Tomazos Transport Pty Limited jointly and severally pay the costs of the Plaintiffs and Defendants by Counterclaim on an indemnity basis;

    (2)In the alternative to (1), Tomazos Group Pty Limited and Tomazos Transport Pty Limited jointly and severally pay the costs of the Plaintiffs and Defendants by Counterclaim on:

    (i)   the standard basis up to and including 6 August 2015; and

    (ii)    an indemnity basis from 7 August 2015;[6]

    (3)In the alternative to (1) and (2), Tomazos Group Pty Limited and Tomazos Transport Pty Limited jointly and severally pay the costs of the Plaintiffs and Defendants by Counterclaim on:

    (i)   the standard basis up to and including 6 March 2016; and

    (ii)    an indemnity basis from 7 March 2016;[7]

    (4)In the alternative to (1), (2) and (3), Tomazos Group Pty Limited and Tomazos Transport Pty Limited jointly and severally pay the costs of the Plaintiffs and Defendants by Counterclaim on:

    (i)   an indemnity basis in respect of costs incurred or determined to be attributable to the November 2011 Sale Agreement or Alternative November 2011 Sale Agreement; and

    (ii)    the standard basis otherwise;

    (5)In the alternative to (1)-(4), Tomazos Group Pty Limited and Tomazos Transport Pty Limited jointly and severally pay the costs of the Plaintiffs and Defendants by Counterclaim on the standard basis;

    (6)Tomazos Group Pty Limited and Tomazos Transport Pty Limited jointly and severally pay interest on costs at a rate of 15.5% per annum; and

    (7)Tomazos Group Pty Limited to pay interest on the balance of any amounts found to be payable in the Reasons at the rate of interest prescribed for post judgment interest under the Supreme Court Rules1987 (NT) (the Rules) for each relevant period plus an additional 8% as simple interest.

19. The Ceccon parties’ advanced the following contentions underpinning these orders:

    (a)The orders sought in:

    (i)   2(1) and 2(7) above are justified because the Tomazos parties did not comply with Practice Direction 6 of 2009 (PD6) in any material respect on the claim or the counterclaim and notwithstanding being given a reasonable opportunity to do so;

    (ii)    2(1) above is justified because of the Court’s findings in respect of the Tomazos parties' failure to properly comply with the order for general discovery and failed to discover documents in accordance with their continuing duty to do so and only well after the failure to discover was brought to their attention;

    (b)The orders sought in 2(2) and 2(3) above are justified because the Tomazos parties did not accept two Calderbank offers (one dated 7 August 2015 and the other 7 March 2016) which:

    (i)   were a genuine compromise;

    (ii)    had terms less favourable to the Ceccon parties than the findings made in the Reasons; and

    (iii)  were, in the circumstances, unreasonably rejected by the Tomazos parties;

    (c)The order sought in 2(4) above is justified as a more limited alternative to proposed order 2(1) in view of the Court's findings about the Tomazos parties' failure to comply with the order for general discovery;

    (d)The order sought in 2(5) above is justified because the Ceccon parties succeeded on substantially all of their claims and in successfully defending the Tomazos parties’ counterclaim; and

    (e)The order sought in 2(6) above is justified because it compensates the Ceccon parties for having to finance this litigation by paying fees to their legal representatives, however, the rate is higher because it is related to the orders sought in 2(1) and 2(7) and the argument developed below in respect of the Tomazos parties' failure to comply with PD6 in any material respect.

    Practice Direction 6 of 2009

20. In Spadaccini v Grice[8] Barr J explained the history and purpose of PD6.  At [44] he said:

    … PD6 requires that parties to a dispute “should follow a reasonable procedure, suitable to their particular circumstances, which is intended to avoid litigation.” PD6 provides substantial detail as to the required pre-commencement procedure, but I briefly summarise the first two steps in the procedure as follows: (1) the plaintiff should send a letter to the defendant with details of the claim, supported by copies of the essential documents on which the plaintiff relies and any documents (except privileged documents) which might significantly impair the plaintiff’s case; (2) the defendant should acknowledge the plaintiff’s claim letter promptly, and then provide a full written response, as appropriate, accepting the claim in whole or in part and making proposals for settlement; or stating that the claim is not accepted. The defendant must be precise about what parts, if any, are accepted and what parts are rejected and provide detailed reasons (including supporting documents) for non-acceptance. PD6 requires pre-commencement discovery of documents by both sides.

21. The relevant costs and interest provisions in PD6 are:

    13.If, in the opinion of the Court, non-compliance with this Part has led to the commencement of proceedings which might otherwise not have needed to be commenced, or has led to delay or costs being incurred in the proceedings that might otherwise not have been incurred, the orders the Court may make include:

    13.1an order that the party at fault pay the costs of the proceedings, or part of those costs, of the other party or parties;

    13.2an order that the party at fault pay those costs on an indemnity basis;

    13.3if the party at fault is a plaintiff in whose favour an order for the payment of damages or some specified sum is subsequently made, an order depriving that party of interest on such sum and in respect of such period as may be specified, and/or awarding interest at a lower rate than that at which interest would otherwise have been awarded;

    13.4if the party at fault is a defendant and an order for the payment of damages or some specified sum is subsequently made in favour of the claimant, an order awarding interest on such sum and in respect of such period as may be specified at a higher rate than the rate at which interest would otherwise have been awarded.

    …

    27The Court will take into account, amongst other matters, whether a party has complied with its duties under the Rules and further this Practice Direction when considering:

    27.1 the exercise of its discretion as to costs under r.63.03;

    27.2the exercise of its discretion in relation to interest under s 84 of the Supreme Court Act.

    28.Notwithstanding O.63.74, where the Court decides that a party has failed to comply with its duties under the Rules and this Practice Direction, the Court may award interest on costs at a rate not exceeding the rate fixed by the Rules, plus 8%.

1. The Ceccon parties contend:

   (a)that the Tomazos parties did not comply with PD6 in any material respect on the claim or the counterclaim notwithstanding being given a reasonable opportunity to do so; and

   (b)their failure to comply with PD6 in the circumstances of this proceeding is such as to justify the Court making orders that the Tomazos parties:

   (i)   pay the Ceccon parties' costs on an indemnity basis (PD6 [13.1] and [13.2]);

   (ii)    pay interest on amounts awarded at a higher rate than the rate at which interest would otherwise have been awarded (PD6 [13.4]); and

   (iii)  pay interest on costs (PD 6 [28]).

2. The relevant circumstances in relation to compliance with PD6 are deposed to in paragraphs [4] to [17] of the affidavit of Mark Spain made on 19 April 2017 and the annexures referred to therein (Spain Affidavit) and in paragraphs [3] to [17] of the affidavit of David De Silva made on 19 April 2017 (De Silva Affidavit).

3. The plaintiffs contend, and I accept, that the solicitors for Ceccon Transport Pty Ltd (Ceccon Transport):

   (a)filed the writ and a general endorsement of claim on 31 October 2014 to preserve the claims due to the potential expiry of limitation periods;

   (b)thereafter complied with the requirements of PD6 as soon as reasonably possible, commencing with a detailed letter on 7 November 2014 (the PD6 letter); and

   (c)served an amended writ and a general endorsement of claim on 4 February 2015 following a period of approximately three months during which Tomazos Group Pty Ltd (Tomazos Group) failed to provide any meaningful response or reasonable explanation as to why a response could not be provided in accordance with the requirements of PD6.

4. Indeed it appears that no meaningful response was forthcoming from the Tomazos parties until 29 April when they filed their defence and counterclaim.  Moreover the Tomazos parties appear to have made no attempt to provide their own PD6 letter before filing their counterclaim.  That counterclaim raised a significant number of complex issues which were independent of those raised by the plaintiffs and were responsible for a very significant part of the proceedings, particularly leading up to and during the hearing of the matter.

5. The PD6 letter provided details of the claims referred to in these proceedings as the Loan Agreement, Material Sale and Supply, the November 2011 Sale Agreement, the Supply and Fit Agreement, the Validation and Accessibility Agreement, and the Gunn Point Rehabilitation Agreement.  It also contained a claim for damages for breach of an agreement by Tomazos to transfer freehold title in an apartment to be selected by Ceccon.  The letter included a Schedule quantifying the amount said to be due, a copy of a number of important documents and a copy of PD6 and an explanatory document.

6. The plaintiffs were substantially successful in establishing those claims, apart from the claims regarding rehabilitation (which was not ultimately pressed) and the claims regarding the apartment and some small items such as the $600 genset hut.  There was no contest in respect of the claims regarding the $400,000 owing under the Loan Agreement and that interest of at least 7% per annum was payable thereon, the $322,886.79 owing for the Material Sale and Supply (Reasons [213(b)]), liability to pay about $101,000 for the stockpiled materials (Reasons [141] – [143]), the $2,500 owing under the Supply and Fit Agreement (Reasons [213(d)]), the $5,782.26 payable under the Supply and Haulage Agreement (Reasons [213(e)]) and the $133,029.50 payable under the Validation and Accessibility Agreement (Reasons [213(f)]).  These items comprise at least $1.1M of the defendant’s liability.  Apart from the dispute concerning the transfer of the apartment, the main issues at trial concerned items of much lower monetary significance than the obvious and longstanding indebtedness exceeding $1.1M.  These concerned the rate of interest payable on the $400,000 outstanding under the Loan Agreement, the precise quantities of building materials and machinery and equipment used by Tomazos (and hence the total amount payable under the November 2011 Sale Agreement), claims for relatively small amounts such as the $600 genset hut, the $10,000 fuel bund wall, the $12,720.26 on Ceccon’s account with Boral, and the Counterclaim.

7. The PD6 letter complied with the requirements set out in subparagraphs [6.1] to [6.7] of PD6.  This included requesting that Tomazos Group acknowledge receipt of the PD6 letter within 14 days and provide a full response to the PD6 letter by no later than 28 November 2014. The PD6 letter asserted that 28 November 2014 was a reasonable period on the basis that the matters claimed had been the subject of numerous discussions between the parties.  The letter also indicated Ceccon’s desire to enter into mediation once Tomazos provided a detailed response.

8. Over the next weeks and then months there were further communications between the solicitors, mainly initiated by Ceccon’s solicitors.  On 14 November De Silva Hebron wrote and advised that it acted for Tomazos Group, acknowledged receipt of the PD6 letter and stated that a substantive response would be provided "in due course”.  De Silva Hebron first met and received instructions from its clients, presumably Tony and John Tomazos, on 21 November.  On 1 December, after receiving a letter from Clayton Utz querying the delay, De Silva Hebron wrote requesting further information and foreshadowing a response on 19 December.  Clayton Utz provided further information including copies of numerous tax invoices on 12 December.  On 17 December De Silva Hebron wrote again, indicating that it would not be responding to the PD6 letter until 16 January and would not be able to participate in mediation before 16 February 2015.  De Silva Hebron wrote again on 16 January and indicated that it would respond to the PD6 letter on 23 January.  This did not occur either.  No explanation was provided as to why this did not occur.  

9. Following a directions hearing before the Master when concerns were expressed about the fact that the writ had not been served, Clayton Utz filed and served an amended writ and endorsement on Tomazos on 4 February.  In his affidavit of 19 April 2017 Mr De Silva said that a substantive response to the PD6 letter was nearly completed by 4 February 2015 but that once the amended writ was served focus was given to the proceedings and not responding to the PD6 letter.  No other explanation was provided as to why Tomazos did not reply to the PD6 letter either soon after 4 February 2015, or ever.

10. De Silva Hebron filed an appearance on 11 February 2015, instructed counsel on 19 February and requested further and better particulars on 27 February. 

11. By letter dated 17 March, De Silva Hebron advised that the loan monies were owed to Mr Tony Ceccon, not to the then plaintiff Ceccon Transport.  The letter also stated that a counterclaim was being considered, and proposed that a mediation be held in no less than four weeks’ time.  No information was provided about a potential counterclaim apart from reference to a possible breach of the “Validation and Accessibility Contract” dated 26 October 2012.

12. On 1 June Ceccon Transport amended its statement of claim, inter alia adding Mr and Mrs Ceccon as plaintiffs.  The Tomazos parties amended their defence and counterclaim on 9 June.  The Master ordered general discovery on 24 June. 

13. The parties engaged in mediation before Mr Maurice QC on 4 August, however the matters were not then resolved.  Three days later, on 7 August, the plaintiffs offered to settle the whole of the proceedings by accepting $2.1 million plus any applicable GST inclusive of costs.

14. Little was said by De Silva Hebron in its correspondence between 14 November 2014 and 17 March 2015 to explain why no meaningful response to the PD6 letter could be provided.  In his affidavit of 10 May 2017 Mr Da Silva says that he first met his clients on 21 November 2015 and took initial instructions from them then.  He said that from that meeting he anticipated that he would be in a position to deliver a formal response to the PD6 letter within a reasonable period.  However he failed to take into account a number of things, including various other commitments that he had between then and the end of January 2015, the fact that Tomazos’ business like the balance of the construction industry in Darwin shuts down from roughly the middle of December to the middle of January, and that John Tomazos and Tony Tomazos would be absent from Darwin at various times over the Christmas break period. 

15. I agree with counsel for Ceccon that the time afforded for the Tomazos parties to respond was generous and reasonable having regard to the object and purposes of PD6 and the indicative timeframe contemplated in PD6.  I also agree that the Tomazos parties did not comply with PD6 in any material respect on the claim or counterclaim, notwithstanding being given a reasonable opportunity to do so.  The explanations for the continuing delays from 14 November 2014 until Tomazos filed a defence and counterclaim on 29 April 2015 are unsatisfactory.  Had Tomazos Group responded to the PD6 letter when its lawyers said they would, or even by the latest of the dates which they indicated, 23 January 2015, it is unlikely that the plaintiffs would have had to incur the cost and delays associated with preparing and filing such a detailed statement of claim as was filed on 17 March 2015.

16. I also agree with Ceccon’s counsel that the following reasons, individually and collectively, demonstrate that the Tomazos parties' failure to comply with PD6 caused delay, unnecessary costs to be incurred and (ultimately) prevented a proper consideration by the parties of an appropriate resolution of the proceeding.

17. First, it can be inferred that the absence of a substantive response to the PD6 letter meant that Tomazos did not give early and proper consideration to the matters required in paragraphs [8] to [10] of PD6.  Tomazos Group had access to and control of necessary documents to verify and assess the claims.  Had Tomazos given early and proper consideration to a substantive PD6 response then the admissions that were made much later in the proceeding could have been made much earlier.  If Tomazos had done this, the complexion of the entire litigation would have been different: positions based on proper documentary records would have been advanced, and discussions at a mediation could have had better prospects of resolving the matter. All this should have occurred before the parties became more entrenched in their positions and invested so much in the legal process and in legal costs.  Delay and increased costs inevitably followed from Tomazos’ lack of engagement with PD6.

18. Secondly, Tomazos’ failure to give early and proper consideration to the matters required in paragraphs [8] to [10] of PD6 carried over into Tomazos’ approach to giving discovery.  The Court’s findings in connection with the Tomazos parties’ failure to give discovery are of a serious nature. Had the Tomazos parties given early and proper consideration to PD6 and then to their discovery obligations, the admissions that were made much later in the proceeding could have been made earlier. The Tomazos parties failed to comply with two fundamental disclosure regimes, the PD6 pre-action disclosure regime and discovery during the course of litigation. Failure to deal properly with the former disclosure regime defeats an important policy of litigating in this Court, and the failure to deal properly with the latter disclosure regime goes to the heart of fundamental obligations in adversarial litigation. The failure to comply with PD6 and discovery obligations increased the number of issues in dispute, made the litigation more complex, and caused it to be more protracted and costly overall.

19. Thirdly, the Tomazos parties did not make any attempt to engage in the PD6 process in relation to their Counterclaim.  The Counterclaim was the single biggest component of this litigation.  Had PD6 been complied with, the inherent difficulty of some of different causes of action and their speculative nature, could have been given early and proper consideration.  There was avoidance in dealing with the Ceccon parties’ claim and more interest given to setting up the (unsuccessful) artifice of the Counterclaim. This also increased the number of issues in dispute, made the litigation more complex, and caused it to be more protracted and costly overall.

20. In summary, although the main claims of the plaintiffs were not in dispute, the Tomazos parties appear to have attempted to stall payment of them for as long as they could and to have belatedly asserted the counterclaim as a further attempt to further delay the inevitable.

21. The Tomazos parties did not comply with PD6.

    Indemnity costs

22. I consider that this failure constitutes proper reason for the Tomazos parties to pay costs of the Ceccon parties on an indemnity basis under [13.1] and [13.2] of PD6.

23. I consider it fair and just that Ceccon’s costs be paid on that (indemnity) basis from 23 February 2015.  That is, one month after the latest of the dates by which De Silva Hebron had indicated they would respond to the PD6 letter.  Had they done that then, made concessions of the kind referred to in [19] above, attempted to define the real issues in dispute, and engaged with the plaintiffs in a meaningful way, it is likely that the plaintiffs would not have had to incur the kind of costs that they subsequently incurred.

24. Costs payable by the Tomazos parties to the Ceccon parties up to 22 February 2015 will be assessed on a standard basis.  This will include Ceccon’s costs of complying with PD6.

25. Because I have reached these conclusions on the basis of Tomazos’ failures to comply with PD6 there is no need for me to consider in detail, at least in respect of the costs issue, the ramifications, all adverse to the Tomazos parties, of Tomazos’ inadequate discovery and of their failure to accept the offers made on behalf of the Ceccon parties, particularly the offer made on 7 August 2015.  However, I shall discuss those matters as they are relevant to other aspects of the plaintiffs’ claims, for example the quantum of interest payable on costs. 

    Discovery

26. A Court can order costs on an indemnity basis where there is evidence of particular misconduct that causes loss of time to the Court and to other parties Colgate-Palmolive Pty Limited v Cussons Pty Limited.[9]

27. Orders for general discovery were made by the Master on 24 June 2015, some two weeks before the mediation attempted before Mr Maurice QC and almost nine months before the commencement of the trial on 7 March 2016.

28. At paragraphs [161] – [165] of the Reasons I made findings critical of the very late and, even then, inadequate disclosure of documents by the Tomazos parties.  The documents produced during the final days of the hearing, particularly on 26 May 2016, included a very large number of invoices dockets and similar documents that occupied two cardboard cartons.  I agree with Ceccon’s counsel that the failure to give discovery prolonged the dispute about the stockpiles. Had discovery been given promptly, Tomazos’ denials that they used the stockpiles could not have been maintained for as long as they were. 

29. Counsel for the Tomazos parties responded by saying that “ultimately, the discovery was made and is in evidence.”  They also submitted that the plaintiffs did not rely upon that discovery in support of their case at all and the late discovery had no bearing on the outcome of the case as determined by the Court. 

30. I accept from Ceccon’s counsel that the late discovery given by the Tomazos parties on use of the stockpiles was very significant to the way that the Ceccon parties were forced to run their case.  First, Mr Preston’s evidence would not have been necessary if it were not for the fact that the Tomazos parties denied use of the stockpiles and documents created by Mr Preston indicated the contrary.  Mr Preston was called to explain documents he created whilst employed by Tomazos Group and which should have been discovered by the Tomazos parties, but were not.

31. Secondly, the late discovery necessitated the post-hearing amendment concerning the Alternative Sale Agreement. If the documents were discovered earlier, the amendment may have been made sooner or the Tomazos parties may have admitted the claim, as they should have.  Once those documents were produced, albeit late, the ability of the Ceccon parties to supplement the evidence of Mr Preston and successfully prove Tomazos’ substantial use of the stockpiles was considerably enhanced.  The documents did have a bearing on the outcome of the case.

32. I agree with Ceccon’s counsel that Tomazos Group’s conduct falls far short of the conduct expected of a litigant properly advised in relation to the seriousness of complying with the obligation to give discovery.  I agree this was a case where a dispute was unnecessarily prolonged and Court time lost in dealing with a factual reality that should not have been contested.

    Settlement offer of 7 August

33. On 7 August 2015, three days after the full day mediation before Mr Maurice QC, the Ceccon parties sent a letter to De Silva Hebron expressed to be “without prejudice save as to costs.”  It said:

    1.Our clients offer to settle the claims and counterclaims in the Proceeding on the following terms:

    (a)the Defendants pay $2,100,000.00 to Ceccon Transport Pty Ltd on or before 14 September 2015 (plus any applicable GST);

    (b)the parties release and discharge each other from all matters arising on the claims and the counterclaims in the Proceeding; and

    (c)the parties consent to orders that the Proceeding by claim and by counterclaim be dismissed.

    2.The above offer is made inclusive of costs and interest and pursuant to Rule 26.11 of the Supreme Court Rules.

    3.If the offer is accepted it will be immediately binding and enforceable but our clients will require all parties to execute a deed of settlement and release to formalise and more fully give effect to the terms of settlement.4.The above offer is made inclusive of costs and interest and pursuant to Rule 26.11 of the Supreme Court Rules.

    4.Our clients reserve the right to allocate the settlement sum to the various claims in the Proceeding at their discretion and for this to be recorded in the proposed deed of settlement and release.

    5.The offer is open for acceptance before 4:00pm on Friday, 14 August 2015.

    The offer is made without prejudice except as to costs in accordance with the principles discussed in Cutts v Head [1984] Ch 290. If the offer is not accepted and any further litigation and shoes, reserve the right to refer to the letter on questions respecting costs in accordance with those principles. Please let us know if your clients accept this offer, in which case we will prepare the deed of settlement and release.

34. There was no attempt made on behalf of the Tomazos parties to put a counter-offer, either whilst Ceccon’s offer was open, or subsequently, or to seek further time for consideration of Ceccon’s offer.

35. Ceccon contends that as a result of the judgment that will follow from the Reasons, the Tomazos parties will be ordered to pay $1,924,781.25 plus interest plus costs plus interest on costs.  This will exceed the amount that Ceccon offered to accept.  Consequently Ceccon would be entitled to indemnity costs from the date of the offer.

36. The general principles regarding offers of the kind made by the Ceccon parties on 7 August are well established. 

37. An offer made inclusive of costs can be properly considered to be a Calderbank offer.[10]  A Calderbank offer does not automatically result in the court making an order for indemnity costs.[11]  The question that the court has to determine in deciding whether to award indemnity costs is:

    …whether the offeree's failure to accept the offer, in all the circumstances, warrants departure from the ordinary rule as to costs, and that the offeree ends up worse off than if the offer had been accepted does not of itself warrant departure.[12]

1. In the context of a Calderbank offer, this generally devolves into a consideration of the following two questions:

   (a)whether the offer was a genuine offer of compromise; and

   (b)whether it was unreasonable for the offeree not to accept the offer in the circumstances.[13]

2. As to the first of these questions, a genuine compromise involves a party giving something away.[14]  As to the second of these questions, a court will take into account various factors such as the stage of the proceeding at which the offer was received, the time allowed to the offeree to consider the offer, the extent of the compromise offered, the offeree's prospects of success assessed as at the date of the offer, the clarity with which the terms of the offer were expressed and whether the offer foreshadowed an application for indemnity costs in the event of the offeree's rejecting it.[15]

3. Counsel for the Tomazos parties did not challenge Ceccon’s contention that the offer was less favourable to the plaintiffs and hence more advantageous to Tomazos than the amount to which the Ceccon parties were found to be entitled.  However counsel contended that the offer did not satisfy all of the criteria noted in paragraphs [59] and [60] above.  Amongst other things counsel contended that the offer was imprecise in terms of dollars because it included the possible addition of GST, it was inclusive of costs as a result of which its real value was difficult to assess, the offer did not clearly foreshadow an application for indemnity costs, and that the failure to accept the offer was not unreasonable.  Reasons for the latter contention included that the defendants were still actively engaged in assessing the merits and value of the counterclaims, that the loan was found to be with Tony Ceccon, not Ceccon Transport, and that the offer was made shortly after the attempted mediation.

4. In my view the offer did meet the two criteria noted in paragraph [59] above.  It was made three days after the attempted mediation.  This would have been a time in the proceedings, perhaps the most appropriate time prior to the period leading up to the hearing itself, when both parties would have been extremely cognisant of the respective strengths and weaknesses of their cases.  This was the time for settlement to be seriously explored by both parties.  Although the time for acceptance was only seven days, less than the 14 day period required for offers under SCR 26.03(3), I think that time was reasonable in the circumstances.  Those circumstances included the fact that the PD6 letter had been sent more than eight months earlier, pleadings had been exchanged and discovery provided, and position papers would have been prepared for and used during the full day mediation on 4 August.

5. In Elite Protective Personnel Pty Ltd & Anor v Salmon Basten JA stated:

   Greater sympathy may be accorded a defendant who receives an offer early in proceedings where there has been no reasonable opportunity for it to assess its questions of liability or its likely exposure in damages. Such matters must be assessed on a case by case basis. Usually litigation will not be the first that the defendant hears of the claim. However, a defendant which receives an offer of settlement in circumstances where it reasonably requires more time to consider its position would no doubt be advised to respond to that effect and, if necessary, make a counter-offer in due course.[16]

6. I consider that it was unreasonable for the Tomazos parties not to accept the offer in the circumstances.  It seems that the only uncertainty in the minds of the Tomazos parties concerned the strength or otherwise of their own counterclaim rather than the strength and likely quantum of the plaintiffs’ claims.

7. Quite apart from the consequences that might flow from the Tomazos parties’ failure to comply with PD6 and with their discovery obligations, their failure to accept the offer would also lead me to decide that Tomazos should pay Ceccon’s costs on an indemnity basis.

   Interest on costs

8. I have found that the Tomazos parties are liable to pay the costs of the Ceccon parties on a standard basis until 22 February 2015 and then on an indemnity basis.[17] 

9. Ceccon submits that the Tomazos parties should also pay interest on those costs at a rate of 15.5% per annum. That rate is derived by using the rate fixed under the Rules, namely 7.5%, and adding another 8% as contemplated by paragraph [28] of PD6 because of Tomazos’ failures to comply with PD6 and their discovery obligations under the Rules.

10. Counsel for the Tomazos parties did not respond to this submission except to submit that the Court should adopt the usual course of leaving it to the Taxing Master to determine entitlement to interest on costs, both as to the rate and from when it should run, a course provided for by SCR 63.74.  In light of the fact that I am also dealing now with other aspects regarding costs and interest, I consider it more appropriate that I deal with this issue now rather than leaving it to the Taxing Master.

11. As Ceccon’s counsel pointed out, SCR 63.74(2) provides that a rate of interest that the Taxing Master may fix under SCR 63.74(1) in respect of costs, shall not exceed the rate from time to time fixed in accordance with SCR 59.02 as interest payable on a judgment debt. 

12. Counsel noted that SCR 59.02(3) states that a judgment debt carries interest from the date of judgment at the rate per annum fixed for s 52(2)(a) of the Federal Court of Australia Act 1975 (Cth) from time to time. Section 52(2)(a) states that interest in respect of the post judgment period is payable at the prescribed rate fixed by rule 39.06 of the Federal Court Rules 2011 (Cth). Rule 39.06 sets the prescribed rate as:

    (a)for the period from 1 January to 30 June in any year – the rate that is 6% above the cash rate last published by the Reserve Bank of Australia before the period commenced; and

    (b)for the period from 1 July to 31 December in any year – the rate that is 6% above the cash rate last published by the Reserve Bank of Australia before the period commenced.

13. The cash rate last published by the Reserve Bank of Australia before the period from 1 January to 30 June commenced was 1.50%.  Accordingly the rate of interest fixed is payable on a judgment debt is 7.5% per annum.  Counsel for the Tomazos parties have not challenged any of these conclusions, presumably accepting that the Tomazos parties should pay interest on the costs to be ordered in Ceccon’s favour at the rate of 7.5% per annum.

14. The question for the Court is whether a higher interest rate should be imposed, as appears to be contemplated by paragraph [28] of PD6.  Although neither counsel adverted to this point, it is arguable that [28] is inconsistent with the intention if not the wording of SCR 63.74(2).  Without needing to answer that question I see no particular reason in the present matter to allow interest on costs at a rate higher than that contemplated by SCR 63.74, namely the rate of 7.5% per annum payable on a judgment debt.  The situation might be different, for example, if normal commercial interest rates were higher than they have been for the last several years or if there was some evidence that the Ceccon parties did or were obliged to incur higher interest rates in order to pay their costs.  In light of my conclusion that most of Ceccon’s costs are to be paid on an indemnity basis, I doubt that the Ceccon parties will be disadvantaged by not being awarded interest on their costs at a higher rate. 

15. Accordingly I will order that the Tomazos parties pay interest on the costs awarded in favour of the Ceccon parties at the rate of 7.5%` per annum.

    Interest payable under the Loan Agreement

16. In the draft orders provided on 11 April 2017, counsel for the Ceccon parties contended that there should be judgment for the Third Plaintiff in the amount of $901,183.62 and $221.77 per day for each day after 11 April 2017 until that amount has been paid.  That amount of $901,183.62 included the $400,000 of the original debt still owing plus interest amounting to $501,183.62.

17. In their submissions of 19 April 2017 the Tomazos parties contended that the total amount owing as at 3 April 2017 was $854,206, of which the interest component was $454,206. With their reply submissions of 24 May 2017 the Ceccon parties provided a detailed schedule showing how they made their calculations and submitted that at that date, 24 May 2017, the interest due was $510,719.83, and was continuing at a daily rate of $221.27. Interest would continue to accrue at that rate until judgment when the covenant to pay interest in the Agreement would be merged in the judgment. Thereafter the total judgment debt would carry interest at the rate fixed under the Rules, namely at 7.5% as I have already concluded.

18. In their supplementary submissions of 5 June 2007 the Tomazos parties contended that the difference between the calculations of the competing parties relates to the timing of assessment.  They wrongly assumed that Ceccon calculated interest on a daily basis, as a consequence of which Ceccon’s figures were higher than they should have been.

19. In their submissions in reply to those submissions, the Ceccon parties agree that interest was to be calculated and compounded annually in accordance with paragraph [112] of the Reasons, and pointed out that their calculations were so performed.  Included with those submissions was a detailed explanation of the calculations set out in the schedule that was attached to their reply submissions of 24 May 2017. 

20. I am satisfied that interest was compounded annually, as at 3 April each year, and that the plaintiffs’ calculations are correct.  The total sum owing as at 3 April 2017 was $899,409.44 and interest is accruing on that amount at the rate of $221.77 per day and will continue to accrue at that rate until judgment.

    Interest on amounts found due in [213(g)]

21. The Ceccon parties contend that Tomazos Group Pty Limited should pay interest on the balance of any amounts found to be payable in paragraphs [213(b)] to [213(f)] of the Reasons at the rate of interest prescribed for post judgment interest under the Rules for each relevant period plus an additional 8% as simple interest.

22. Section 84 of the Supreme Court Act 1979 (NT) gives the Court the power to 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 that sum for the whole or any part of the period between the date when the cause of action arose and the date of the judgment.” It does not authorise the giving of interest upon interest, and this could only apply to amounts referred to in paragraphs [213(b)] to [213(f)] of the Reasons.

23. Where, as here, no particular rate is prescribed, interest should be allowed at “ordinary commercial rates”.[18] It is open to a party to call evidence about interest rates, but it has been held that where no such evidence has been called, it is appropriate to apply the rates applicable to post judgment interest under the Rules. I have already discussed this in [70] - [71] above. In Sherwin and Sherwin v Commens and Commens[19] at [67] - [72], this Court found that the rates applicable to post judgment interest under the Rules was a fair and reasonable rate of interest.

24. Accordingly, the Ceccon parties submit that the appropriate base rate of interest is the rate applicable to post judgment interest under the Rules. This rate of interest varied during the period from when the causes of action for the amounts payable in respect to paragraphs [213(b)] to [213(f)] of the Reasons accrued, from between 10.75% and 7.75%.

25. The Ceccon parties submit in the alternative that the appropriate base rate of interest is 9% as this was the continuing interest rate that the parties had agreed on in respect of the Loan Agreement.

26. They also point out that PD6 [27] provides that the Court will take into account whether a party has complied with its duties under the Rules and PD6 when considering the exercise of its discretion in relation to interest under s 84 of the Supreme Court Act 1979 (NT) . Paragraph [13.4] of PD6 also contemplates that where the Court considers that non-compliance with PD6 has led to delay or costs being incurred in the proceedings that might otherwise not have been incurred, it may order interest on part or all of the amount which the defendant is ordered to pay the plaintiff at a higher rate than the rate at which interest would otherwise have been awarded. The Ceccon parties submit that had the Tomazos parties complied with PD6 the proceedings might otherwise have resolved. Although PD6 does not specify a higher rate for the purpose of pre-judgment interest the Ceccon parties contend that the rate of 8% contemplated in [28] of PD6 for interest on costs is appropriate.

27. Counsel for the Tomazos parties accept that prejudgment interest should be allowed at ordinary commercial rates.  However they dispute that the rate claimed by the Ceccon parties can be so described.

28. Counsel contended that Sherwin should not be followed because there was no effective contradictor to the proposition put by the plaintiffs.  Counsel also submitted that the decision in Sherwin does not reflect the practice adopted in the Northern Territory, citing the following passage in paragraph [8.24.21] of Grant, Civil Procedure Northern Territory.[20] Grant QC (as he then was) said:

    Interest should be referable to the yield the plaintiff would have received for the past, not the rate of interest which the plaintiff as a notional borrower would have paid: see Guley v Sabbadin (1979) 41 SASR 142. This is because interest is to compensate the plaintiff for being kept out of the money, not to put the plaintiff in the position of a commercial lender over the period. For that reason, retail deposit and investment rates will be the appropriate measure, rather than the lending rates such as the small business variable and the housing loan variable rates.

29. Counsel for the Tomazos parties then referred to the decision of this Court in Territory Sheet Metal Pty Ltd v ANZ Banking Group Limited[21] where the Court took an average of cash management account rates and short-term fixed deposit rates to arrive at a rate of 3.8%.  However in that matter the Court had the benefit of data from four major banks indicating commercial rates relating to cash management account transactions and short-term fixed interest deposit transactions during applicable periods. 

30. No such evidence was tendered in the present matter.  As counsel for Ceccon submits, the only evidence that might be relevant is the fact that the parties agreed to the 9% rate under the Loan Agreement.

31. In Territory Sheet Metal,[22] Olsson AJ referred to and did not disagree with what Southwood J had said in Sherwin.  Just below the passage quoted in [86] above Grant QC said:

    It is open to the plaintiff to call evidence about interest rates, but in more recent cases (see, eg, Sherwin v Commens [2008] NTSC 45 at [67] – [68]; Helvixa Pty Ltd v Lederer [2007] NSWSC 49 at [16]), it has been held that in the absence of such evidence it is appropriate to apply the rates from time to time applicable to post judgment interest which, under SCR 59.02(3), is the rate of interest specified in the Federal Court Rules: Acer Forester Pty Ltd v Complete Crane Hire (NT) Pty Ltd [2013] NTSC 62 at [51].

32. After further discussion about Sherwin and Territory Sheet Metal Grant QC said:

    The matter of determining the appropriate rate of interest requires a broad and practical approach, whereby the purpose for which interest is awarded is considered and care is taken not to over compensate the plaintiff or to do an injustice to the defendant.

33. I consider that the approach adopted in Sherwin should be followed where there is no evidence of relevant commercial interest rates. That is, the rates fixed for post-judgment interest pursuant to s 85 of the Supreme Court Act 1979 (NT) and under SCR 59.02(3) should normally be applied.

34. However in the present case I consider that an interest rate of 9% is appropriate.  Although that is a little higher than the current rate for post-interest judgment, that is the rate that was agreed to when the Loan Agreement was entered into.  There has been no significant change to commercial interest rates since then.  The imposition of that rate is also intended to reflect the fact that PD6 contemplates that in situations such as I have found to exist in the present matter, the interest might be higher than that that might otherwise be ordered.

35. Despite Ceccon’s submissions to the effect that I should increase the rate by 8%, the figure referred to in paragraph [28] of PD6 in relation to interest on costs, I consider that the plaintiffs would be adequately compensated by allowing them interest at the rate of 9% agreed under the Loan Agreement, noting also the orders that I will be making concerning indemnity costs and interest thereon.

36. The remaining question concerns the starting point for the payment of interest on each of the items referred to in paragraphs [213(b)]  to [213(f)] of the Reasons.

37. As to interest on the amount owing for the Material Sale and Supply referred to in [213(b)] of the Reasons, the only challenge on the part of the Tomazos parties concerned the rate.  Interest should run from 1 November 2011.

38. In relation to the Alternative November 2011 Sale Agreement the Tomazos parties point out that the plaintiffs’ original case based on the sale of all of the stockpiles, machinery and equipment was abandoned and the Court found that Tomazos was only liable to pay for what was used.  They also point out that the Notice of Claim was not given until 7 November 2014 and that no invoice was issued until 22 July 2015.  In light of this, they submit that interest should run from that date.

39. I agree with Ceccon’s reply to the effect that the production of an invoice did not create the obligation to pay.  Rather it was the use and appropriations of the stockpiles over the 13 month period from 1 November 2011 to about 1 December 2012 that created the obligation to pay and gave rise to the cause of action.  As it is not possible to know the exact dates on which particular stockpiles[23] were used during that 13 month period, I consider that interest on the amount due in relation to the stockpiles should run from about midway between those dates, namely from 15 May 2012.

40. I also agree with Ceccon that interest on the miscellaneous machinery and materials[24] should run from 1 November 2011, as those items were immediately available for use and many were used when Tomazos commenced operating from the Boral yard.  So too for the $10,000 payable for the fuel bund wall, as Tomazos had the benefit of the fuel bund wall from 1 November 2011.[25]

41. As to interest on the amount owing for the supply and installation of the hungry boards, referred to in [213(d)] of the Reasons, I reject Tomazos’ contention that interest should not commence until 21 January 2015 when an invoice was issued.  I agree that the obligation to pay arose in October 2012 when Ceccon supplied the hungry boards and that interest should run from 30 October 2012.

42. In relation to the amount owing for supply and haulage referred to in [213(e)] of the Reasons, Tomazos accepts that interest should accrue from November 2011.  As there is some uncertainty as to when in October and November 2011 those events occurred, it is appropriate that interest accrue from 1 November 2011.

43. The parties agree that interest on the amount payable under the Validation and Accessibility Agreement referred to in [213(f)] of the Reasons should run from 24 September 2014.

    Interest up to judgment

44. As at 24 July 2017, the amount payable under the Loan Agreement is $924,248.  It comprises the $899,409.44 that was due on 3 April 2017 plus interest from then at the rate of $221.77 per day namely $24,838.49.[26]

45. In relation to interest payable in respect of the other items referred to in [213(b)] to [213(f)] of the Reasons it is convenient to provide the following table.  I have rounded up or down some amounts to the nearest dollar.

Item	Principle $	Start date	Period	Interest @ 9%	Total $ P & I
Material Sale and Supply	322,887	1/11/11[27]	5 Y + 266 days	166,477	489,364
Stockpiles	494,055[28]	15/5/12[29]	5 Y + 71 days	230,974	725,029
Machinery and materials	55,344	1/11/11[30]	5 Y + 266 days	28,535	83,879
Fuel bund	10,000	1/11/11[31]	5 Y + 266 days	5,156	15,156
Hungry boards	2,500	30/10/12[32]	4 Y + 268 days	1,065	3,565
Supply and Haulage	5,782	1/11/11[33]	5 Y + 266 days	2,981	8,763
Validation and Accessibility Agreement	133,030	24/9/14[34]	2 Y + 304 days	33,917	166,947
TOTAL	1,023,598	469,105	1,492,703

1. Accordingly the total amount payable in respect of the items referred to in [213(b)] to [213(f)] of the Reasons is $1,492,703, which comprises $1,023,598 principle and $469,105 interest.

   Orders

2. I make the following orders:

   1.Judgment for the Third plaintiff against the Defendant in the amount of $924,248.

   2.Judgment for the First Plaintiff against the Defendant in the amount of $1,492,703.

   3.     The Amended Counterclaim is dismissed.

   4.The Defendant and the Plaintiffs by Counterclaim jointly and severally are to pay the costs of the Plaintiffs and Defendants by Counterclaim on a standard basis up to 22 February 2015 and on an indemnity basis thereafter, together with interest thereon at the rate of 9% per annum.

-------------------------

[1] Ceccon Transport Pty Ltd & Ors v Tomazos Group Pty Ltd [2017] NTSC 25.

[2]     In this context the Tomazos parties referred to The Silver Fox Co Pty Ltd (No 3) (2004) 214 ALR 621 at 624.

[3]     In this context the Tomazos parties referred to Groote Eylandt Aboriginal Trust Inc v Deloitte, Touche Tohmatsu (No 3) [2017] NTSC 30 at [14].

[4]     See for example discussion in LO v NTA [2017] NTSC 24, The Silver Fox Co Pty Ltd (No 3) (2004) 214 ALR 621 at 624 and Groote Eylandt Aboriginal Trust Inc v Deloitte, Touche Tohmatsu (No 3) [2017] NTSC 30 at [14].

[5]     Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685, pp 693-695; followed by Kearney J in Enterprise Gold Mines NL v Mineral Horizons NL (1988) 52 NTR 13; see also to like effect Henderson & Ors v Purairclean Pty Ltd & Anor[No 3] [2013] NTSC 73.

[6]     On 7 August 2015 Ceccon offered to settle the claims and counterclaims in the proceeding on the basis that the Tomazos parties pay $2,100,000 (plus any applicable GST) to the first plaintiff.  That offer was not accepted. 

[7]     On 7 March 2016 Ceccon offered to settle the claims and counterclaims in the proceeding on the basis that the Tomazos parties pay $2,500,000 (plus any applicable GST) to the first plaintiff.  That offer was not accepted.

[8] [2012] NTSC 41 at [37] - [47.

[9] [1993] FCA 801; 46 FCR 225 at [24].

[10]    See Elite Protective Personnel Pty Ltd & Anor v Salmon [2007] NSWCA 322; Veetemp Australasia Pty Ltd v GRD Group NT Pty Ltd [2012] NTSC 93.

[11]     See SMEC Testing Services Ply Ltd v Campbelltown City Council [2000] NSWCA 323.

[12] Ibid at [37].

[13]    See Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 at [8] and Edgar v Public Trustee for the NT [2011] NTSC 21.

[14]    See Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358 at 368 and Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344.

[15]    See Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; 13 VR 435 and Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 at [12].

[16] [2007] NSWCA 322 at [147].

[17] See [44] - [46] above.

[18]     Cullen v Trappel [1980] HCA 10; 146 CLR 1 at 21.

[19] [2008] NTSC 45 (Sherwin).

[20]    Michael Grant QC (ed) Civil Procedure Northern Territory (Presidian Legal Publications).

[21][2010] NTSC 3 at [196] – [197] (Territory Sheet Metal).

[22] Ibid at [195].

[23]     Reasons [213(c)(i)].

[24]     Reasons [213(c)(ii)].

[25]     Reasons [213(c)(iii)].

[26] See [78] above.

[27] See [95] above.

[28]     This amount includes GST.

[29] See [97] above.

[30] See [98] above.

[31] See [98] above.

[32] See [99] above.

[33] See [100] above.

[34] See [101] above.