Netline Pty Ltd v QAV Pty Ltd [2025] WASC 232 (S)
On 25 September 2025, the Supreme Court of Western Australia, presided over by Justice Whitby, delivered its decision regarding costs and pre-judgment interest following the assessment of damages in the case of Netline Pty Ltd v QAV Pty Ltd.
The case involved a long-standing dispute between the parties, spanning over 12 years, and centred on the assessment of the award of damages and the parties’ associated costs of the assessment.
The dispute between the parties originated over a decade ago, with the plaintiffs initially awarded nominal damages of $101 in 2020 by Master Sanderson. This decision was overturned on appeal in 2022.
The court ruled in favour of the plaintiffs, Netline Pty Ltd and Kathryn Isabel Lance, ordering the defendant, QAV Pty Ltd, to pay damages, interest, and costs.
Subsequently, Justice Whitby assessed the plaintiffs' damages at $25,515.35 during a second assessment hearing on 16 June 2025.
The defendant's argument that the plaintiffs' damages were nominal and that no costs order should be made was rejected.
The court clarified that the damages awarded were not nominal and that the plaintiffs were entitled to costs as the successful party.
The court noted that the plaintiffs were successful in the "underlying, real contest" regarding the appropriate comparator for assessing their loss. That is, Justice Whitby determined that the plaintiffs were the successful party and were entitled to recover their costs for both the first and second assessment hearings.
The court also highlighted that the plaintiffs had entered into a commercial compromise with the defendant, securing $141,215.41 under a fixed return rental agreement, which reduced the quantum of damages claimed.
Justice Whitby awarded pre-judgment interest of $8,065.65 (on the damages amount of $25,515.35) calculated at a rate of 6% per annum from 11 March 2020 to 16 June 2025.
The court determined that in calculating interest, it would be assessed from the midpoint of the damages period. Justice Whitby reasoned that this approach was the fairest approach as it balanced the timeline of incurred damages. This calculation was guided by section 32 of the Supreme Court Act 1935 (WA), and the Civil Judgments Enforcement Act 2004 (WA) and relevant regulations.
Justice Whitby also ruled that the defendant must pay the plaintiffs' costs for both the First and Second Assessment Hearings, rejecting the defendant's submissions for alternative cost orders.
The defendant argued that the plaintiffs unreasonably rejected several offers by it to settle, including a Calderbank offer made on 10 April 2025.
However, the court found that the plaintiffs’ rejections of these offers was not unreasonable, given the substantial legal and expert costs incurred by the plaintiffs and the broader context of the litigation. The plaintiffs had incurred significant legal and expert fees, which were not accounted for in the offers.
The court exercised its discretion under section 37 of the Supreme Court Act 1935 (WA) and Order 66 of the Rules of the Supreme Court 1971 (WA), which generally provide that costs follow the event.
The court noted that the plaintiffs' rejection of the Calderbank offer was reasonable, as the offer did not include provisions for legal costs, and the plaintiffs had already incurred substantial expenses. Consequently, the court declined to depart from the general rule on costs.
The court emphasised that the rejection of settlement offers must be assessed at the time they were made, not with hindsight.
The court noted that the plaintiffs were wholly successful in the Second Assessment Hearing, particularly regarding the apartment comparator used to assess their loss. Additionally, the plaintiffs and defendant had reached a commercial compromise on future damages, which resulted in fixed rental payments until 2028 and reduced the overall damages awarded by the court (because the dispute had been partially resolved). These factors supported the court's decision to award costs to the plaintiffs.
Justice Whitby made the following orders:
This decision highlights that the court will exercise its discretion, particularly in cases involving complex and protracted disputes, in awarding costs and interest, reinforcing the principle that costs generally follow the event. Just because the eventual damages award might be less than the costs incurred by the plaintiff in prosecuting the dispute, does not mean that the plaintiff does not get to recover their costs.
It also underscores the importance of carefully considering the quantum and timing of settlement offers, particularly those made under the principles of Calderbank v Calderbank. Those offers can only be relied upon to reverse the usual position if it would be unreasonable for the plaintiff to reject the offer at the it was made.
Offers made too early for the opposing party to properly appreciate the risks they face if they don’t accept the offer (because of a lack of documentation, evidence or the status of the pleadings) are unlikely to be upheld as a reasonable compromise.
Offers made late in time when significant costs have been incurred, but which do not properly compensate the opposing party for those costs, are also unlikely to be upheld as a reasonable compromise if that party does eventually succeed.
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