World Touring Melbourne v Australian Grand Prix
[2024] VSC 650
•25 October 2024
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST
S ECI 2022 01114
| WORLD TOURING MELBOURNE LIMITED (UK CRN 1217 3527) | Plaintiff |
| v | |
| AUSTRALIAN GRAND PRIX CORPORATION (ABN 86 947 927 465) | Defendant |
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JUDGE: | CROFT J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers (Plaintiff’s Submissions (15 October 2024); Defendant’s Submissions (15 October 2024)) |
DATE OF JUDGMENT: | 25 October 2024 |
CASE MAY BE CITED AS: | World Touring Melbourne v Australian Grand Prix (No 2) |
MEDIUM NEUTRAL CITATION: | [2024] VSC 650 |
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DAMAGES — Claim for penalty interest pursuant to s 60 of the Supreme Court Act 1986 — Whether interest is payable on the damages sum from the date of commencement of the proceeding — Whether there is ‘good cause’ to depart from the prima facie position under s 60(1) of the Supreme Court Act 1986 — ‘sufficient’ cause established between commencement of proceedings on 1 April 2022 until 15 December 2022 — Claim sufficiently communicated by plaintiff on delivery of a witness statement on 15 December 2022 — Amcor Ltd v Barnes (No 2) [2019] VSC 849 — Penalty Interest Rate Act 1983, s 2 — Supreme Court Act 1986.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr N. De Young KC with Mr B. Gibson and Mr C. Fitzgerald | Gadens Lawyers |
| For the Defendant | Mr G.D. Dalton KC with Ms J.D. Watson | Arnold Bloch Leibler |
HIS HONOUR:
Introduction
On 30 August 2024, the Court handed down its reasons in World Touring Melbourne Limited v Australian Grand Prix Corporation[1] and awarded World Touring Melbourne Limited (WTM) damages in the amount of $2,840,000. The parties are agreed that the Court should make orders that:
[1][2024] VSC 521.
(a) judgment is entered for the plaintiff against the defendant in the sum of $2,840,000 (damages sum); and
(b) the defendant pay the plaintiff’s costs of and incidental to the proceeding (including reserved costs) on the standard basis, such costs to be taxed in default of agreement.
The parties’ agreement does not, however, extend to the order for interest.
The difference between the parties with respect to order for interest relates to the manner in which they say that interest should be calculated:
(a) WTM has proposed an order that ‘interest … be calculated in accordance with the Penalty Interest Rate Act 1983 from 1 April 2022’, being the date the proceeding commenced; and
(b) Australian Grand Prix Corporation (AGPC) seeks an order that interest be calculated (a) from 17 April 2023 (or alternatively 16 December 2022) in respect of the sum of $2,024,000; and (b) from 1 April 2022 in respect of the balance of the judgment sum.
WTM claims penalty interest pursuant to s 60 of the Supreme Court Act 1986 (Supreme Court Act). AGPC, on the other hand, contends that this is not appropriate because it was not given proper notice of the AgBioEn claim (which resulted in the award of $2,024,000) until the expert report of Liesl Malcolm was served on 17 April 2023 (Malcolm Report). Alternatively, it says that it was not given any notice of the AgBioEn claim until the Supplementary Witness Statement of Rebecca Artmonsky was served on 16 December 2022 (Supplementary Artmonsky Statement).
By way of overview, WTM contends that the following should be noted with respect to the competing proposed orders: (a) there is no dispute that s 60 of the Supreme Court Act applies to the damages sum; (b) the rate of interest is not in dispute (i.e. penalty rate); (c) its proposed order reflects the general rule under s 60(1); and (d) AGPC’s proposed order requires it to establish that there is ‘good cause’ to depart from the general rule under s 60(1). Having regard to these matters, WTM submits that AGPC cannot establish that there is ‘good cause’ to depart from prima facie position under s 60(1) in the manner sought in its proposed order and that, consequently, the Court should make the order with respect to interest as WTM proposes.
Relevant legal principles
Section 60 of the Supreme Court Act provides that:
The Court, on application in any proceeding for the recovery of debt or damages, must, unless good cause is shown to the contrary, give damages in the nature of interest at such rate not exceeding the rate for the time being fixed under section 2 of the Penalty Interest Rates Act 1983 as it thinks fit from the commencement of the proceeding to the date of the judgment over and above the debt or damages awarded.
At all relevant times, the penalty interest rate under s 2 of the Penalty Interest Rate Act 1983 has been 10% per annum.
The object of an award of interest under s 60 is first, to compensate the plaintiff for being kept out of its money and being deprived of its use over the relevant period; secondly, to encourage a defendant to make a realistic assessment of its liability in respect of the alleged claim and to take prompt steps to compromise it.
Section 60(1) establishes a ‘prima facie rule’ or a ‘general rule’ that the plaintiff is entitled to an award of interest from the commencement of the proceeding to the date of judgment, over and above the amount awarded in ‘damages’, unless the defendant can show good cause to the contrary. Thus the Court is entitled to depart from the general rule if the defendant can show ‘good cause’ to the contrary.[2] If there is no good cause to the contrary, the Court ‘must’ award interest and so, it follows, that the onus is on the defendant to show ‘good cause’.
[2]Clarke v Foodland Stores Pty Ltd [1993] 2 VR 382, 389; Cargill Australia Ltd v Viterra Malt Pty Ltd (No 30) [2022] VSC 80, [8] per Elliott J.
The phrase ‘good cause to the contrary’ means good reason, according to the justice of the particular case, for not allowing interest at all or, if interest is to be allowed, then for not allowing interest for the whole of the period.[3] In considering whether there is good cause to the contrary, the Court should have regard to the facts and circumstances of the case weighed against the background of the purposes of an award of interest; including (i) to deter defendants from delaying proceedings thereby retaining the benefit of the funds; and (ii) to encourage defendants to make a realistic assessment of their liability and bona fide attempts to compromise.[4]
[3][1993] 2 VR 382, 394; Euromark Ltd v Smash Enterprises Pty Ltd (No 2) [2021] VSC 393, [63] per Lyons J and Amcor Ltd v Barnes (No 2) [2019] VSC 849, [85]–[86] per Sloss J.
[4]Amcor Ltd v Barnes (No 2) [2019] VSC 849, [85]–[86] per Sloss J.
More particularly in this respect, it is helpful to refer to the judgment of Sloss J in Amcor Ltd v Barnes (No 2)[5] where her Honour held that the fact that the plaintiff did not join the relevant defendant to the proceeding until 4 October 2010 was good cause to the contrary such that it was that date and not the date of commencement of the proceeding in 2007 that was the appropriate date from which interest should run. Concluding, her Honour said:[6]
In my view, from that point forward APA was on notice of the substance of the claims made against it, and even though it did not have all of the ‘fleshed out’ detail that was later provided on 15 February 2013 (in the case of the clause 12.2 claim) and on 20 July 2012 (in the case of the overcharging claim), it was in a position to commence analysing and making a realistic assessment of its liability in respect of the claims against it, with a view to taking bona fide steps towards resolving the dispute.
[5][2019] VSC 849.
[6][2019] VSC 849, [117].
Relevant background
Prior to commencing this proceeding, WTM’s solicitors sent a letter of demand and engaged in correspondence with AGPC’s solicitors.[7] The letter of demand and subsequent correspondence was based on a claim solely for the recovery of claimed costs but made no reference to the AgBioEn claim despite, as AGPC observes, its specific and significant quantum. WTM commenced these proceedings by a statement of claim filed by 1 April 2022 but the particulars to its loss and damage claim also made no reference to the AgBioEn claim. These particulars provided for:
[7]CB5644–5654.
(a) costs incurred in the performance of its responsibilities (as detailed in the schedule attached to the statement of claim) in the sum of $7,593,716.41;
(b) lost profits, estimated to be approximately $1,128,357. There were no particulars or other specification as to how those profits were calculated and what forms of revenue were comprised in the profit calculation; and
(c) further particulars as to the loss and damages suffered by WTM to be provided in advance of the trial.
WTM amended its statement of claim on 28 October 2022, including the particulars of loss and damage. As from that date, the only particulars of WTM’s claim for loss and damage were ‘[f]urther particulars as to the loss and damages suffered by WTM will be provided in advance of the trial in the form of evidence in the proceeding’.
It appears that the first mention of the AgBioEn claim occurred on 16 December 2022 when WTM served the Supplementary Artmonsky Statement which included evidence relevant to the AgBioEn claim but, nevertheless, the claim was not particularised. On 17 April 2023, WTM filed the Malcolm Report. That report contained an assumption at [1.2.1(c)] that ‘AgBioEn agreed to pay USD$2.5million to WTM as sponsorship of the Event, and this amount of revenue would have been received had the Event not been cancelled’. This was, AGPC contends, the first time that WTM clearly claimed that the AgBioEn sponsorship would be received by WTM as a form of revenue. Shortly after, on 14 June 2023, the solicitors for AGPC wrote to the solicitors for WTM requesting that WTM provide proper particulars of its loss and damage allegation. WTM’s solicitors responded, on 22 June 2023, by stating:
Our client’s loss and damage of revenue resulting from cancellation of the 2020 World Tour Melbourne scheduled to occur on 13 March 2020 is estimated to be $8.545 million. See the expert report of Liesl Malcolm filed 17 April 2023.
Further correspondence ensued between solicitors and on 10 July 2023 WTM’s solicitors reiterated in a letter to AGPC’s solicitors that:
It is sufficient that the concert would have proceeded and that, if it had, our client would have been financially better off by approximately $8.545m, as stated in the expert report of Ms Malcolm.
Application of principles
The controversy between the parties on this issue arises from the application of relevant principles in light of the particular circumstances.
WTM submits that the circumstances do not provide AGPC with ‘good cause’ for resisting the usual operation of s 60(1) of the Supreme Court Act for the following reasons:[8]
[8]Plaintiff’s Submissions On Interest (15 October 2024), [20]–[26].
20. First, whilst Ms Malcom’s report provided necessary particulars, it did not alter the nature and extent of the plaintiff’s claimed loss and damage. The plaintiff’s statement of claim filed at the commencement of the proceeding claimed loss and damage totalling approx. $8.7 million.[9] In her report, Ms Malcom assessed the plaintiff’s loss and damage totalling approx. $8.5 million.[10] At trial, the plaintiff advanced a claim for loss and damage consistently with Ms Malcolm’s report totalling approx. $8.5 million.
[9]Statement of Claim, particulars to [12].
[10][2024] VSC 521, [264].
21. Secondly, whilst the ‘global sponsorship’ claim was not particularised in the statement of claim, it was fairly and squarely addressed in the plaintiff’s witness statements which were filed and served not long after the commencement of the proceeding (December 2022) and earlier than Ms Malcolm’s report (17 April 2023). The supplementary witness statement of Ms Artmonsky dated 15 December 2022 addressed the topic in detail.[11] That document identified the basis and quantum of the claim. It concluded:[12]
[11]At [2] to [12]. See also the statement of Paul Morrison dated 20 December 2023, [63]–[64].
[12]At [12].
‘Had the 14 March 2020 concert not been cancelled by AGPC, I believe that WTM would have been entitled to receive USD$2.5 million in sponsorship from AgBioEn.’
22. Thirdly, the absence of particulars of the ‘global sponsorship’ claim in the statement of claim was not a cause of any injustice to the defendant. In this regard, we have put on evidence of the correspondence between the parties’ solicitors in this proceeding.[13]
[13]Affidavit of Simon Anthony Theodore dated 15 October 2024.
23. The defendant (via its solicitors) sent repeated letters at various stages of the proceeding stating the plaintiff’s claim was ‘fanciful’, ‘plainly misconceived’, ‘hopeless’, ‘bound to fail’, ‘entirely unfounded’, ‘objectively untenable’, ‘will fail’, ‘cannot succeed’, ‘not based on any cogent exercise of legal rights’ and an ‘artificial construct’. Further, the defendant (via its solicitors) questioned the plaintiff’s solicitors’ compliance with ethical obligations in continuing to advance the plaintiff’s case. For example, it stated:
‘We ask you to consider whether you are reasonably able to maintain the proceeding on behalf of the plaintiff in light of the obligations that legal practitioners owe to the Court’.
24. In the circumstances, it would have made no difference to the defendant’s assessment of the plaintiff’s claim, even if particulars of the ‘global sponsorship’ claim been provided earlier than Ms Malcolm’s report. This correspondence also fortifies the need to give effect to the objects of an award of interest under s 60 in this case, particularly to encourage the defendant to make a realistic assessment of its liability.
25. Fourthly, this case is obviously distinguishable on the facts from Peet v Richmond (No 2).[14] In that case, Peet pleaded various causes of action, including a claim under an alleged contract for $63 million. Peet ultimately succeeded on a quantum meruit claim for approx. $760,000. The Court (Hollingsworth J) found there was ‘good cause’ not to allow Peet to have interest under s 60 until the date Peet’s expert report was filed and served in the proceeding, in circumstances where:
[14][2009] VSC 585.
(a) prior to commencement of the proceeding, Peet was not seeking payment on a quantum meruit basis, and was actively refusing offers to be paid on that basis;[15]
(b) the defendant did not deny liability to pay on a quantum meruit basis;[16]
(c) at trial, Peet abandoned its other causes of action, and the trial proceeded based on the quantum meruit claim only;[17]
(d) after the commencement of the proceeding, Peet had engaged in unreasonable conduct, including by putting forward the ‘absurd’ proposition in correspondence the defendant could have ‘quantified Peet’s quantum merit claim for themselves, by trawling through Peet’s discovery’;[18] and
(e) Peet’s expert report ‘was the first time it gave any indication as to the amount of its quantum meruit claim, and how it was calculated’.[19]
26. None of those circumstances apply here. The plaintiff succeeded on all causes of action. The defendant defended all causes of action. The plaintiff’s damages were the same for each cause of action. The quantum of the plaintiff’s damages was identified in the statement of claim. Evidence of the plaintiff’s damages, including the basis and quantum of the ‘global sponsorship’ claim, was provided not long after the commencement of the proceeding and before the plaintiff’s expert report in this case.
[15]At [61].
[16]At [2] and [61].
[17]At [2].
[18]At [54] and [64].
[19]At [64].
AGPC submits that were the court to allow WTM interest at the statutory maximum for the full period, an injustice would be worked on AGPC because the majority of the damages award (namely $2,024,000 of $2,840,000) is for a claim that was not raised by WTM at the time that it commenced or amended the proceeding, and was only properly particularised upon service of the Malcolm Report on 17 April 2023. In this context, particular reference was made to the judgment of Sloss J in Amcor Ltd v Barnes (No 2)[20] and the passage set out previously in these reasons.[21]
[20][2019] VSC 849.
[21]See above [9].
More particularly, AGPC submits that WTM, in its original statement of claim, comprehensively stated its particulars of loss and damage, including by way of a detailed schedule but did not make any reference to the AgBioEn claim. It says further that the AgBioEn claim was not properly identified in WTM’s lay evidence, nor was it foreshadowed in the amended statement of claim on 28 October 2022. It was, it says, only when the Malcolm Report was served on 17 April 2023 that AGPC was, in the words of Sloss J, ‘in a position to commence analysing and making a realistic assessment of its liability in respect of the claims against it, with a view to taking bona fide steps towards resolving the dispute’. Thus, AGPC says that it would be unjust to impose penalty interest on it in respect of the AgBioEn amount from any earlier than 17 April 2023 when WTM delayed and failed to make this important part of its case known to AGPC earlier than that date.
Conclusions
It is clear from the authorities that ‘good cause’ may arise with respect to the operation of s 60(1) of the Supreme Court Act in circumstances where there has been insufficient communication, by way of pleadings or otherwise, of the nature and extent of a particular claim and insufficient detail to enable the other party to analyse that claim and to make a realistic assessment of its potential liability in respect of such a claim.
In the present circumstance, I am satisfied that the AgBioEn claim was sufficiently communicated by WTM to AGPC and in sufficient detail to enable AGPC to assess its position on delivery of the Malcolm Report on 17 April 2023. However, it is, in my view, also the case that this threshold was satisfied on the delivery of the Supplementary Witness Statement of Ms Artmonsky on 15 December 2022. Certainly, the Malcolm Report fleshed matters out in greater detail but I am, nevertheless, of the view that, on 15 December 2022, AGPC was able to understand and assess the AgBioEn claim in the relevant sense.
It follows that I accept that there is ‘sufficient’ cause established by AGPC with respect to the operation of s 60(1) of the Supreme Court Act between the commencement of the proceedings on 1 April 2022 until 15 December 2022 but, thereafter, WTM became entitled to penalty interest as claimed.
Orders will be made accordingly.
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