Netline Pty Ltd v QAV Pty Ltd - [2025] WASC 232 (S)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   NETLINE PTY LTD -v- QAV PTY LTD [2025] WASC 232 (S)
CORAM:   WHITBY J
HEARD:   ON THE PAPERS
DELIVERED          :   25 SEPTEMBER 2025
FILE NO/S:   CIV 1289 of 2014
BETWEEN:   NETLINE PTY LTD
KATHRYN ISABEL LANCE
Plaintiffs

AND

QAV PTY LTD
Defendant

Catchwords:

Assessment of damages following trial - Costs - Effect of Calderbank offer - Costs follow the event - Turns on own facts

Legislation:

Supreme Court Act 1935 (WA)
Rules of the Supreme Court 1971 (WA)

Result:

Defendant pay the plaintiffs' costs of the assessment hearings.

Category: B

Representation:

Counsel:

Plaintiffs	:	No Appearance
Defendant	:	No Appearance

Solicitors:

Plaintiffs	:	Graham & Associates Lawyers
Defendant	:	Lawton Gillon

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

Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 WLR 394
Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873
Calderbank v Calderbank [1975] All ER 333
Currie v Currie [No 3] [2018] WASC 306
Ford Motor Company of Australia Ltd v Lo Presti (2009) 41 WAR 1
Frigger v Professional Services of Australia Pty Ltd [No 2] [2011] WASCA 103 (S)
Netline Pty Ltd v QAV Pty Ltd [2020] WASC 23
Netline Pty Ltd v QAV Pty Ltd [2022] WASCA 131
The Mediana [1900] AC 113
Thiess Contractors Pty Ltd v Placer (Granny Smith) Pty Ltd [2001] WASCA 166
Yara Australia Pty Ltd v Oswal [2012] WASCA 264

WHITBY J:

These reasons concern the costs orders to be made following my assessment of damages in Netline Pty Ltd v QAV Pty Ltd [2025] WASC 232 (Reasons for Decision). I assessed the plaintiffs' damages in the amount of $25,515.35. These reasons also concern the appropriate costs order to be made for pre-judgment interest on the award of damages.
The plaintiffs seek the following orders:
(1)The defendant pay the plaintiffs $8,065.65 for interest, being interest accrued on the sum of $25,515.35 at the rate of 6% per annum pursuant to s 2 of the Supreme Court Act 1935 (WA) (SCA) from 11 March 2020 to 16 June 2025.
(2)The defendant pay the plaintiffs' costs with respect to the assessment of damages, including the costs of the assessment before Master Sanderson and of the assessment before Justice Whitby, and of the issue of costs, to be taxed if not agreed.

The plaintiffs rely on the affidavit of Warren Matheson Lance sworn on 23 July 2025 (Lance Affidavit), an outline of submissions filed on 14 July 2025 and an outline of responsive submissions filed on 28 July 2015.
The defendant submits that there should be no order as to costs.
Alternatively, the defendant submits that the following orders are appropriate:
(1)The defendant pay the plaintiffs' costs of and incidental to the matter from 6 October 2022 to 10 April 2025 on a standard basis, to be assessed if not agreed.
(2)The plaintiffs pay the defendant's costs of and incidental to the matter from 11 April 2025 on an indemnity basis, to be assessed if not agreed.
Alternatively, the defendant submits that that the appropriate costs order is that the defendant pay the plaintiffs' costs fixed in the sum of $60,000.
The defendant relies on the affidavit of John William Gates sworn on 9 July 2025 (Gates Affidavit), the affidavit of Simon Christopher England sworn on 14 July 2025 (England Affidavit), an outline of submissions filed 14 July 2025 and reply submissions filed on 29 July 2025.
For the reasons that follow, I find that the appropriate costs orders are those proposed by the plaintiffs.

Background

The background to the dispute between the parties has a long and difficult history which began over 12 years ago. That history is set out in the Reasons for Decision at [1]-[9].
The assessment of the plaintiffs' damages was first determined by Master Sanderson in 2020 - the Master determined that the plaintiffs were entitled to nominal damages in the amount of $10[1] (First Assessment Hearing). The Master's decision was overturned on appeal in 2022.[2] On 16 June 2025, I assessed the plaintiffs' damages in the amount of $25,515.35 (Second Assessment Hearing).
[1] Netline Pty Ltd v QAV Pty Ltd [2020] WASC 23.
[2] Netline Pty Ltd v QAV Pty Ltd [2022] WASCA 131.
I am now required to consider the appropriate costs orders in relation to the First Assessment Hearing and the Second Assessment Hearing. I am not however, required to consider the appropriate costs orders in the appeal - the Court of Appeal made orders on 6 October 2022 dealing with the costs of the appeal. Those costs orders do not assist in determining the appropriate costs orders on either assessment of damages.

Costs of the Assessment of Damages

Pursuant to s 37 of the SCA, the court has a general discretion to award costs and has full power to determine by whom or out of what estate, fund or property, and to what extent costs are paid. This discretion is subject to the rules of the court. Order 66 r (1) of the Rules of the Supreme Court 1971 (WA) (RSC) provides that, without limiting the general discretion conferred on the court by the SCA, the court will generally order that the successful party to any action or matter will recover their costs. This is referred to as the general rule that 'costs follow the event'.
In determining who is the successful party, the question to be answered is who was successful in the 'underlying, real contest' between the parties.[3]
[3] Frigger v Professional Services of Australia Pty Ltd [No 2] [2011] WASCA 103 (S) [12].
An award of only nominal damages may be found to disentitle the successful party from an award of costs.[4] However, the court has a wide discretion to award costs and there is no rule to this effect.[5]
[4] Thiess Contractors Pty Ltd v Placer (Granny Smith) Pty Ltd [2001] WASCA 166 [9] (Thiess Contractors) citing Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873 at 874 and Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 WLR 394 at 402 - 404).
[5]Thiess Contractors [9].
Nominal damages were described by Lord Halsbury in The Mediana [1900] AC 113 at 116 as:
'Nominal damages' is a technical phrase which means that you have negatived anything like real damage, but that you are affirming by your nominal damages that there is an infraction of a legal right which, though it gives you no right to any real damages at all, yet it gives you a right to the verdict or judgment because your legal right has been infringed. But the term 'nominal damages' does not mean small damages.
The defendant submits that the appropriate costs order is 'no order as to costs' because, amongst other things, the plaintiffs failed to obtain any substantial order as to damages. While the amount of damages assessed may have been small, it was not 'nominal'. Further, the quantum of damages awarded to the plaintiffs must be considered in the context of what has occurred since the First Assessment Hearing.
Firstly, the parties resolved the issue of future damages on the first day of the Second Assessment Hearing. This is not properly categorised as an abandonment of the plaintiffs' claim for future loss, rather as a commercial compromise between the parties. This commercial compromise is reflected in the agreement reached between the parties, and tendered into evidence at the Second Assessment Hearing, pursuant to which the plaintiffs are entitled to receive $141,215.41 from the defendant under a fixed return rental agreement.[6] This compromise resulted in a reduction of the quantum of damages claimed by the plaintiff at the Second Assessment Hearing as future damages were no longer sought by the plaintiffs.
[6] Exhibit 12.
Secondly, although the plaintiffs claimed damages in the amount of $443,753 in the First Assessment Hearing, had they been successful in obtaining that amount, the plaintiffs would not have been entitled to any further payments from the defendant by way of rent or revenue sharing. During the six years that elapsed between the First Assessment Hearing and the Second Assessment Hearing, the plaintiffs continued to receive monthly payments and payments referred to as 'top up payments' from the defendant. Therefore, I do not accept that the defendant had success in reducing the amount of damages claimed by the plaintiffs - instead it was time and commercial compromise that had that effect.
The issue to be resolved at the Second Assessment Hearing was the appropriate apartment comparator to use in the assessment of the plaintiffs' loss. The plaintiffs were wholly successful on that issue and in my view, there is no reason to depart from making the usual order entitling the plaintiffs to recover their costs of both the First Assessment Hearing and Second Assessment Hearing from the defendant.
The defendant says however, that the plaintiffs unreasonably rejected several offers made by the defendant to resolve the matter. Those offers to which the defendant refers are as follows:
(1)An offer contained in a letter dated 4 April 2019 offering the plaintiffs the amount of $25,353.02 and a lease agreement to remain in the defendant's leasing pool;
(2)An offer contained in a letter dated 11 June 2019 offering the plaintiffs the amount of $24,050.87 and a lease agreement to remain in the defendant's leasing pool; and
(3)An offer made on 10 April 2025 pursuant to the principles set out in Calderbank v Calderbank[7] by which the defendants offered to pay the plaintiffs the sum of $130,000 in full and final satisfaction of the dispute and the plaintiffs could elect for their apartment to be retained in the letting pool or removed from the letting pool (Calderbank Offer).
[7] Calderbank v Calderbank [1975] All ER 333.
First, I will consider the two offers made by the defendant in 2019. The defendant submits that the plaintiffs' rejection of those offers was unreasonable such as to justify no order as to costs or alternatively, an order that the defendant pay the plaintiffs' costs be fixed in the amount of $60,000. The defendant does not provide any explanation as to why he says these offers were unreasonably rejected. Having regard to all the circumstances, I infer that it is the ultimate quantum of damages awarded that renders the refusal of those offers unreasonable.
Mr Lance, the director of the first plaintiff, deposes that the 2019 offers were rejected because:[8]
(1)the offers made no provision for legal costs;
(2)the plaintiffs had incurred $89,904.09 in expert fees;
(3)the plaintiffs had incurred approximately $166,396.09 in legal fees for its former solicitors; and
(4)the offers proposed reducing rental payments and making future adjustments to rent, including entering into a deed poll.
[8] Lance Affidavit [4] and [5].
Given the unchallenged evidence of Mr Lance, I do not consider that the plaintiffs unreasonably rejected the offers made by the defendant in 2019. The plaintiffs' rejection of these offers does not give me any reason to depart from making the usual orders as to costs, that is that the defendant pay the plaintiffs' costs of the First Assessment Hearing and Second Assessment Hearing.
Second, I turn to consider the Calderbank Offer. The Calberbank Offer provides the foundation for the defendant's submission that the plaintiffs ought pay his costs from 10 April 2025 on an indemnity basis.
There must be a special or unusual feature of a case in order for a court to exercise its discretion to award costs on an indemnity basis.[9] One circumstance where an indemnity costs order is warranted is where a party unreasonably rejects a Calderbank offer.[10]
[9] Yara Australia Pty Ltd v Oswal [2012] WASCA 264 [33].
[10] Ford Motor Company of Australia Ltd v Lo Presti (2009) 41 WAR 1 (Lo Presti).
In deciding whether the rejection of a Calderbank offer was unreasonable, the following factors are relevant:
(a)the stage of the proceeding at which an offer was received;
(b)the time allowed to the defendant to consider an offer;
(c)the extent of the compromise offered;
(d)the plaintiffs' prospects of success assessed at the date of an offer;
(e)the clarity with which the terms of an offer were expressed; and
(f)whether an offer foreshadowed an application for indemnity costs in the event of the plaintiffs rejecting it.[11]
[11] Lo Presti [19].
Whether the rejection was unreasonable must be assessed at the time that a Calderbank offer is rejected, not with the benefit of hindsight. I must be satisfied that reasonable people in the plaintiffs' position, giving proper consideration to the evidence to be adduced and properly advised about the law, should have assessed their prospects of obtaining an amount greater than that offered to be so low that it was unreasonable to reject a Calderbank offer.[12]
[12] Currie v Currie[No 3] [2018] WASC 306 [13].
The party who asserts that a Calderbank offer was unreasonably rejected bears the onus of proving that the rejection was unreasonable such that the court should make an order for indemnity costs.[13]
[13] Lo Presti [21].
Mr Lance deposes that the plaintiffs rejected the Calderbank Offer because it made no provision for legal costs and, in addition to the legal costs previously incurred, the plaintiffs had incurred an additional $50,318.79 in expert fees and $51,778.40 in legal fees.[14]
[14] Lance Affidavit [9].
In my view, the plaintiffs did not unreasonably reject the Calderbank Offer at the time that it was made. While the assessment of damages appears to be modest in comparison to the Calderbank Offer, the plaintiffs' legal costs and disbursements incurred were considerable at that time. Further, the ultimate assessment of damages is not wholly reflective of the outcome achieved by the litigation - the plaintiffs and the defendant also agreed on fixed rental payments until 31 January 2028.
As is the case with the 2019 offers, the plaintiffs' rejection of the Calderbank Offer does give me any reason to depart from making the usual order as to costs, that is that the defendant pay the plaintiffs' costs of the First Assessment Hearing and Second Assessment Hearing.

Pre-Judgment Interest

The assessment of damages relates to the period from 2 April 2015 to 31 March 2025. The plaintiffs submit that the court should award pre-judgment interest on the amount of $25,515.35 from 11 March 2020, which is the midpoint of that period, and that the appropriate interest rate is 6%. I agree with the plaintiffs' submissions for the following reasons:
(1)It is not appropriate to calculate interest from the beginning of the period when no damage had yet been incurred by the plaintiffs, nor is it appropriate to calculate interest from the end of the period, when the entire damage had been incurred by the plaintiffs;
(2)On 31 December 2024, the defendant made two payments to the plaintiffs, totalling $26,485.77, in reduction of the plaintiffs' damages - this was towards the end of the damages assessment period;
(3)As an overall matter of impression, the fairest way to calculate interest on the award of damages is to do so by reference to the mid point of the damages assessment period;
(4)Section 32 of the SCA provides that the court may order that a judgment may include an amount for pre-judgment interest; and
(5)When calculating interest for the purposes of s 32 of SCA, the court may use, as a guide, the rate of interest prescribed from time to time for the purpose of s 8 of the Civil Judgments Enforcement Act 2004 (WA): O 36 r 20 RSC. The current prescribed rate of interest is 6% per annum.[15]
[15] Regulation 4 of the Civil Judgments Enforcement Regulations 2005 (WA) provides that the rate of interest for the purposes of s 8(1)(a) of the Civil Judgments Enforcement Act is 6% per annum.

Orders

I make the following orders:
1.The defendant pay the plaintiffs $8,065.65 for interest, being interest accrued on the sum of $25,515.35 at the rate of 6% per annum pursuant to section 32 of the Supreme Court Act 1935 (WA) from 11 March 2020 to 16 June 2025.
2.The defendant pay the plaintiffs' costs with respect to the assessment of damages, including the costs of the assessment before Master Sanderson and of the assessment before Justice Whitby and of the issue of costs, to be taxed if not agreed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
RP
Associate to the Honourable Justice Whitby
25 SEPTEMBER 2025