Sydney Local Health District v Macquarie International Health Clinic Pty Ltd

The case of Sydney Local Health District v Macquarie International Health Clinic Pty Ltd concerned a dispute over trespass to two sites subject to long-term leases. One site was an undeveloped block intended for the construction and operation of a private hospital, while the other was an established car park. Macquarie International Health Clinic Pty Ltd (Macquarie) sought damages for loss of opportunity to earn profits from these sites, as well as mesne profits. The matter came before the Court of Appeal of New South Wales, presided over by Bell P, Gleeson and Payne JJA.

The Court of Appeal was required to determine several legal issues. These included the period of trespass and how damages should be assessed, particularly in relation to mesne profits and the "user principle." The court also had to consider whether the trespass continued after an order for possession was made but stayed, and whether the stay remained in effect following the refusal of a special leave application to the High Court. Furthermore, the court needed to address the method of calculating damages for mesne profits, specifically whether they should be assessed by reference to the actual usage and existing state of the premises or by reference to market rental. Finally, the court considered the taxation of damages for mesne profits, including the principle of "grossing up" in line with the fourth principle in *Daniels v Anderson*.

The Court of Appeal allowed the appeal and dismissed the cross-appeal. The court reasoned that the refusal of the special leave application to the High Court did not automatically lift the stay on the orders made by the Court of Appeal, and that the trespass continued during the period of the stay. In assessing mesne profits, the court applied the user principle, determining that damages should be assessed by reference to the market rental of the land trespassed upon, rather than its actual usage. The court also found that it would be unjust not to take into account the identifiable and quantifiable taxation impacts on the damages awarded for lost commercial opportunities.

Consequently, the Court of Appeal set aside previous orders and entered judgment for Macquarie. This judgment included mesne profits of $14,530,510 for the Car Park Site, comprising damages and interest, along with interest on that total amount from 4 May 2017. Macquarie was also awarded $1,048,800 in damages for additional building and consultancy costs, and $301,990 for remediation and excavation work. The court also made orders regarding the payment of costs and invited further submissions on specific aspects of the judgment, including the amount of interest and potential restitution orders.