IN THE SUPREME COURT OF VICTORIA	Not Restricted	
AT MELBOURNE
Common Law Division
JUDICIAL REVIEW AND APPEALS List
S ECI 2022 04572

HANH TRAN and HOI LE	Appellants	
		
v  		
		
PACKAGING LOGISTICS PTY LTD (ACN 101 920 763) trading as AUSTRAL ALUMINIUM PRODUCTS	Respondent	

S ECI 2022 05112

PACKAGING LOGISTICS PTY LTD (ACN 101 920 763) trading as AUSTRAL ALUMINIUM PRODUCTS 	Appellant	
		
v  		
		
HANH TRAN and HOI LE	Respondents	

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JUDGE:	Gorton J	
WHERE HELD:	Melbourne	
DATE OF HEARING:	On the papers, following judgment given on 20 December 2023 and the subsequent filing of written submissions in March and again in May 2024	
DATE OF RULING:	5 June 2024	
CASE MAY BE CITED AS:	Tran v Packaging Logistics Pty Ltd (Final Orders and Costs)	
MEDIUM NEUTRAL CITATION:	[2024] VSC 290	

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APPEALS –  Appeals from Magistrates’ Court of Victoria – Where appellants succeeded in their appeal relating to assessment of damages and Austral’s appeal was dismissed – Whether the appellants proceeding should be remitted to Magistrate for assessment of damages – Whether leave should be granted to adduce further evidence – Where legal costs are disproportionate - Where appeal Court to assess damages on the evidence already led – Aerial Advertising Co v Bachelors Peas Ltd (Manchester) [1938] 2 All ER 688 - Civil Procedure Act 2010 (Vic) ss 7(1) and 8(1) - Magistrates’ Court Act 1989 (Vic) s 109(6).

DAMAGES – Whether evidence permits an assessment of damages – Where Court to assess damages as best it can - JLW (Vic) Pty Ltd v Tsiloglou [1994] 1 VR 237.

COSTS – Costs of the appeal proceedings and Magistrates’ Court proceeding – Where no without-prejudice offers made – Where Magistrate did not err to refuse appellants to reopen their case – Where orders made by Magistrate should not be disturbed – Where Austral was unsuccessful in its appeal - Chen v Chan (No 2) [2009] VSCA 233.

INTEREST –  Where uplift factor or interest sought – No legal or evidentiary basis for uplift factor – Whether interest payable on damages sum – Supreme Court Act 1986 (Vic) s 60 – Penalty Interest Rates Act 1983 (Vic) s 2. 

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APPEARANCES:
	Counsel	Solicitors	
For the Appellants in S ECI 2022 04572 / Respondents in S ECI 2022 05112	Mr S Stuckey KC and 
Mr J Stavris	Indovino’s Lawyers	
			
For the Respondent in S ECI 2022 04572 / Appellant in S ECI 2022 05112	Mr B Mason	Phillips & Wilkins	

TABLE OF CONTENTS

A. Introduction	1
B.  The findings I made	1
C.  The appeals themselves	2
D.  What to do now?	2
D.1  The options	2
D.2 Parties’ positions	3
D.3  Conclusion: I should decide based on the evidence already led	3
E.  What should the damages be?	5
F.  ‘Uplift factor’ or interest	9
G.  Costs	11
G.1  Costs below	11
G.2.  Costs of the appeals	12
H. Disposition	12

HIS HONOUR:
A. Introduction
1	These reasons concern the form of order I should make, including as to costs and interest, following the publication of my reasons for judgment in Tran v Packaging Logistics Pty Ltd.   
B.  The findings I made
2	Packaging Logistics Pty Ltd (ACN 101 920 763) trading as Austral Aluminium Products (‘Austral’) supplied and installed some doors and aluminium windows for Ms Hanh Tran and Mr Hoi Le (‘the appellants’) at a property that they owned.  In a proceeding in the Magistrates’ Court of Victoria, the Magistrate determined that the doors and windows were defective, some could be rectified, and others could not be rectified and had to be replaced.  His Honour also accepted, I concluded, that the glass in all the doors and windows had to be replaced because otherwise no certificate of occupancy could be issued.  The appellants sought damages based on the cost of removing and replacing all the doors and windows.  His Honour instead awarded damages for those doors and windows that could be rectified based on the cost of rectification, and did not award any damages for those doors and windows that were defective and had to be replaced on the grounds that the evidence did not permit those damages to be evaluated.  
3	Both parties appealed.  On 20 December 2023, I delivered reasons in which: 
(a)	I concluded that his Honour had erred in his approach to the assessment of damages for those doors and windows that could be rectified by deciding to assess damages based on the cost of rectifying them (rather than replacing them) without taking into account the evidence that the glass had to be removed and replaced and that the proposed rectification works did not include the removal and replacement of the glass;
(b)	I accepted the appellants’ submission that the Magistrate had erred by awarding no damages for the doors and aluminium windows that could not be rectified and had to be replaced because, contrary to his Honour, I concluded that the evidence did permit an assessment of those damages; 
(c)	I rejected the appellants’ submission that the Magistrate had erred by failing to consider claims under ss 259(3)(b) and 267(3)(b) of the Australian Consumer Law (that is, sch 2 to the Competition and Consumer Act 2010 (Cth));
(d)	I rejected the appellants’ submission that the Magistrate had erred by not granting them leave to reopen to lead further evidence as to these damages; 
(e)	I decided that Austral should be given leave to appeal out of time;  
(f)	I rejected Austral’s submission that the evidence led by the appellants on damages was inadmissible or ‘not probative’; and
(g)	I provided for the parties to file and serve submissions on the form of order that should be made in light of these findings.  They did so.
C.  The appeals themselves
4	As set out in Part G of my earlier reasons:
(a)	The appellants’ appeal (S ECI 2022 04572) should be allowed, and the orders made below on 10 October 2022 be set aside; and 
(b)	In Austral’s appeal (S ECI 2022 05112), an order should be made giving Austral leave to appeal out of time, but the appeal should otherwise be dismissed.
D.  What to do now?
D.1  The options
5	There are three options:
(a)	The matter could be remitted, ideally to the Magistrate who first heard the matter, with the parties being permitted to adduce further evidence on the question of damages;
(b)	The matter could be remitted without my giving the parties leave to adduce further evidence (although it would be usual to leave that question, ultimately, to the Magistrate determining the issue); or
(c)	Although uncommon in an appeal limited to a question of law, I could, if I think it appropriate to do so, decide the matter myself based on the evidence already led.   Section 109(6) of the Magistrates’ Court Act 1989 is expressed in wide terms:
(6) 	After hearing and determining the appeal, the Supreme Court may make such order as it thinks appropriate, including an order remitting the case for re-hearing to the Court with or without any direction in law.
D.2 Parties’ positions
6	The appellants submit that the question of damages ought to be remitted to the Magistrates’ Court with leave to the parties to adduce further evidence; alternatively, if no further evidence may be adduced, the assessment of damages ought to be done by this Court.  
7	Austral submits that the question of damages ought to be remitted to the Magistrates’ Court, constituted by the same Magistrate, without leave to the parties to adduce further evidence.  It also submits that, if the question of damages is to be determined by this Court, it should, again, be determined without leave being given to the parties to adduce further evidence.
D.3  Conclusion: I should decide based on the evidence already led
8	There has already been a hearing in the Magistrates’ Court that ran for six days, supplemented by detailed written submissions, and then these appeals.  The claim is for no more than $82,240 plus GST or $90,464.  The practical reality is that allowing the parties now to lead further evidence would require the matter to be remitted to the Magistrates’ Court for redetermination and result, in substance, in having the whole question of damages  heard afresh.  It is apparent that, certainly by now, the legal costs of this litigation have become disproportionate to the amount at stake.  That is an observation, rather than a criticism of either side.  But it is an overarching purpose of the Civil Procedure Act 2010 that the resolution of disputes be ‘cost effective’ and the Courts are obliged to seek to give effect to this purpose.  To remit the matter to be reheard after the calling of further evidence would substantially increase the legal costs incurred and the disproportionality.  Further, the parties made forensic decisions in choosing what evidence to lead and there is no compelling reason why they should not be held to those decisions.  
9	Also, as noted above, I found that the Magistrate did not err in refusing the appellants’ application to reopen to lead further evidence as to damages.  It would be an odd result if I were now to remit it to be determined on the basis that the parties did have leave to adduce further evidence. 
10	Accordingly, the question of damages should be determined on the evidence that has already been led.  
11	Austral submitted that it would be in the interests of justice, under s 109(6) of the Magistrates’ Court Act 1989, that the question of quantum be remitted to the trial Magistrate. It submitted that the matter ought to be remitted to the original Magistrate to assess the credibility and weight of the evidence of the witness Mr Kon Samartzis, the owner and director of Pacific Shopfitters Pty Ltd who gave a global quote for the removal and replacement of the installed doors and windows, and that this Court was not suitably placed to assess his credibility ’to the extent those submissions concern features of his evidence which cannot be gleaned from the transcript.’  It submitted that the Magistrate who heard the original proceeding will be able to assess the weight to be given to the evidence of Mr Samartzis.  
12	I am not persuaded by this submission.  The Magistrate heard the matter on 28 March 2022 – 1 April 2022 and 20 April 2022, and handed down reasons on 4 May 2022.  Given the passage of time, it is unlikely that the Magistrate who first heard the matter would be in a better position that me now to assess damages, even assuming the same Magistrate were available to do so.   Further, Mr Samartzis was a glazier with 30 years’ experience who was subpoenaed to give evidence because he had provided a quote for the removal and replacement of all the defective doors and windows (and an additional door not in dispute in this case).  The appellants relied on that quote as evidence of what it would cost to remove and replace the defective doors and windows.  Mr Samartzis was cross-examined.  He was reluctant to reveal the calculations underlying his quote, but had them with him and no one required him to produce them.  Although Austral contended that his evidence should be given no weight for that and other reasons, his credit was not attacked at the time.  I do not consider that I would be inappropriately disadvantaged in my ability to assess his evidence from the transcript without having seen and heard him give his evidence.
13	For these reasons, I conclude that the appropriate course is for me now to assess those damages and to do so on the evidence led below. 
E.  What should the damages be?
14	After I published my reasons, the parties filed submissions on damages generally.  Those submissions did not address the issue of what those damages should be in the event that I decided to assess damages myself.  The parties were invited to file further submissions that did so, and took up that invitation.  Austral also filed an additional reply submission.
15	Austral submitted that the assessment of damages had to proceed on the basis that the trial Magistrate had determined ‘which windows and doors require rectification only, and not removal and replacement’ as those findings ‘were not disturbed on appeal’.  I disagree if by this submission it was contending that I must approach the assessment of damages in the same way.  I concluded that his Honour had erred in approach by assessing damages by reference to the rectification cost of some of the doors and windows without having regard to all the evidence.  Once his Honour’s assessment is set aside on that basis, I may assess damages myself and am not constrained to follow the same approach.  
16	The appellants are entitled to the damages necessary to put them in the same position that they would have been in had the contract been complied with. As noted above, on the findings of the Magistrate, that I have not set aside, Austral supplied and installed six doors or windows that were defective.  Four of the items supplied and installed –  two sliding doors, a six leaf bi-fold door and a set of three windows -  were capable of being rectified, but, in addition to the frame rectification work that was identified, had to have their glass removed and replaced with new glass.  There was evidence of the cost of the frame rectification work required but there was no evidence of the cost of removing and replacing the glass. In my view, assessing damages by reference to the cost of rectifying the frames of those doors and windows that were able to be rectified is unsatisfactory because that would then allow no damages for the fact that the glass on those doors and windows had still to be removed and replaced.  Two of the items supplied and installed – a ten-leaf bi-fold door and a sliding door -  could not be rectified and had to be replaced entirely.  
17	There was evidence (in the form of a quote from Pacific Shopfitters Pty Ltd) for the cost of removing and replacing all of the six defective items, in addition to a 2360 × 1000mm ‘single swinging door’.  The quote, which is set out in para 43 of my earlier reasons and again below, was for $82,240 plus GST, or $90,464:
First Floor
3300mm × 10,100mm = 1, 10 leaf bi-fold door	(Upstairs Bi-Fold Doors)
2820mm × 3190mm = 1, apartment style sliding door 	(Upstairs Sliding Door)

Ground floor
2810mm × 4480mm = 1, apartment style sliding door	(Downstairs Sliding Doors)
3300mm × 3850mm = 1, apartment style sliding door	(as above)
2810mm × 3100mm × 1830mm = 1, corner 6 leaf bi-fold door 	(Corner Bi-Fold)
2530mm × 2450mm = 3, fixed windows pool windows	(Pool Windows)
2360mm × 1000mm = 1, single swinging door

18	I have added the descriptive words in parentheses, and italicised the item in respect of which the applicants are not entitled to damages.
19	The Court is required to assess damages as best it can, if it safely can, on the evidence that was led.  In my view, the best method of assessing damages, on the evidence led, is to use the quote to assess the cost of removing and replacing all the defective doors and windows.  This is a quote to remove and replace doors and windows in the same building.  It was not suggested in cross-examination that there was some particular quality of the doors and windows the subject of the quote that meant that they were not proper replacements for the defective doors and windows or that Mr Samartzis had inflated his quote for some improper purpose.  Either party could have led further evidence at that time, but neither did.  To assess damages in any other way would be to deny to the appellants realistic compensation for their loss and would fail to put them in the position they would have been in had the doors and windows supplied and installed not been defective in the first place.  
20	The quote included a 10-leaf bi-fold door, a six-leaf bi-fold door, three fixed windows, and three sliding doors, in addition to the single swinging door.  It is unfortunate, of course, that the quote does not itemise the costs of the various items so that the amount attributable to the ‘single swinging door’ can easily be ascertained, but that is the state of the evidence left to the Court by both parties.  In my view, this imperfection does not preclude an assessment of damages altogether.  I reject Austral’s submission that the appellants have ‘reached an analytical cul-de-sac’ and that the applicants should not receive any ‘additional damages’ because the use of this quote as the basis of an assessment would involve ‘speculation or guesswork’.
21	The appellants submitted that the quote was for a total of 31 panels and 101.25m2 of glass.  On this basis, the quote averaged $2,652.90 per panel and $812.25 per square metre.  They submitted that a ‘per panel’ assessment was conservative in the sense that it was likely that the bi-fold doors were more expensive to remove and replace than single panels.  They submitted that their damages should be assessed by reducing the amount of the quote by up to $2,600 to allow for the cost of the ‘single swinging door’ that was not part of the defective products to be removed and replaced.  
22	In order to establish that the quote was for 31 panels, the appellants relied on the original quote that Austral provided.  That document was not easy to understand and did not satisfy me that the quote under consideration here was for 31 panels.  
23	The Pacific Shopfitters Pty Ltd quote is for nine separate items, two of which are multi-panel bi-fold doors.  Putting height to one side, the eight items for which damages are to be assessed are over 27 metres wide (the second set of figures in the quote is the width).  The single swinging door is one metre wide.   A single swinging door is unlikely to be as complicated to make or to install as bi-fold doors or sliding doors, but may or may not be harder than a fixed window.  Any estimate of damages must be conservative.  In my view, the damages may conservatively and safely be assessed, taking into account the descriptions of the doors and windows in the quote, by reducing the quoted price, inclusive of GST,  by one-twentieth ($4,523) to allow for the fact that it includes the single swinging in respect of which damages are not to be assessed.  Based on the evidence as a whole, I am satisfied that a quote for the removal and replacement of the items other than the ‘single swinging door’ would have been at least $85,940.80 inclusive of GST.  I consider that to be, on the evidence presented and assessing the matter conservatively, an appropriate estimate of the amount required to put the appellants in the position they would have been in had Austral supplied and installed doors and windows that were fit for purpose.   
24	Austral submitted that it would be wrong to assess damages in this way on the grounds that the appellants had conceded in oral argument that the Magistrate could not have used the quote to ascertain the cost for the replacement of individual items.  I did not understand that to be the appellants’ position in the event that I determined that the Magistrate had erred in his approach.  The appellants’ position was, always, that damages should be assessed including by reference to the quote obtained by them for the removal and replacement of all the doors and windows.  In the written submission they made to the Magistrate, they said:
In circumstances where the Pacific Shop fitters quotation was not challenged and alternative pricing in current terms is not provided, this honourable Court ought to accept the Pacific Shop fitters quote as fair and reasonable.
25	For the above reasons, I assess damages in the amount of $85,940.80 inclusive of GST.
F.  ‘Uplift factor’ or interest
26	The applicants sought an ‘uplift factor’ to reflect that ‘building costs have famously risen substantially in the intervening years’.  I am not prepared to allow an ‘uplift factor’.  I see no legal or evidentiary basis for doing so.   
27	The applicants sought, as an alternative, interest.  Section 60 of the Supreme Court Act 1986 provides that the Court, on application in a proceeding for the recovery of 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 s 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 damages awarded.  By reason of s 33 of the Supreme Court Act 1986, s 60 of that Act applies to proceedings in the Magistrates’ Court of Victoria.
28	In its reply submission, Austral submitted:
There is ... no basis for the Court to award interest in circumstances where there is no evidence that the appellants have incurred any amount to rectify the units in question in the 10 years since they first contracted with the respondent.
29	This submission does not address the reason for which interest (strictly, damages in the nature of interest) is usually ordered on an award of damages.  Interest is not ordered to reflect the fact that a plaintiff has expended moneys to remedy a problem caused by a defendant.  It is ordered, instead, primarily because a plaintiff has been deprived of the use of the judgment sum for the period of the litigation and the defendant has had the use of the judgment sum for that period.  The plaintiff ‘ought in justice to be placed in the position in which he would have been had the amount of the verdict been paid to him at the date of the commencement of the action’.  It is also ordered to encourage settlements and ‘to make it unprofitable for defendants to delay settlement of or adjudication upon the claim made upon them’.  Sympathy for a defendant is not a good reason to refuse to award interest.  In my view, Austral has not shown ‘good cause ... to the contrary’, and accordingly the applicants are entitled by s 60 of the Supreme Court Act 1986 to damages in the nature of interest.
30	As noted above, s 60 of the Supreme Court Act 1986 provides for the Court to order damages in the nature of interest ‘at such rate not exceeding the rate for the time being fixed under s 2 of the Penalty Interest Rates Act 1983 as it thinks fit from the commencement of the proceeding to the date of the judgment’.  The Magistrates’ Court proceeding was commenced on 25 September 2018.  Some difficulty arises in determining the ‘date of the judgment’.  The Magistrates’ Court order was made on 10 October 2022.  However, those orders are to be set aside and so the ‘date of the judgment’ should be taken to be the date on which I order damages to be paid.  The period of time is therefore from 10 October 2022 to today, that is, 5 June 2024.  
31	The penalty interest rate includes a ‘penalty’ component but is the rate routinely ordered.  That is because, presumably, if there were no penalty component there would be no disadvantage to a defendant seeking to delay the determination of a claim.  There is no reason put forward for which interest should not be calculated at the rate provided under the Penalty Interest Rates Act 1983. It has been 10% since 1 February 2017. The interest is calculated on a simple rather than a compounding basis.  
32	The interest payable on the sum of $85,940.80 from 10 October 2022 to 5 June 2024 at the rate fixed in s 2 of the Penalty Interest Rates Act 1983 is $14,221.44.  Accordingly, I will order damages in the nature of interest in the sum of $14,221.44.
G.  Costs
33	The appellants sought their costs below and of the appeal.  Austral objected to my determining the question of costs at the same time that I determine the question of damages.  It did not contend that there were any without-prejudice offers on which it might seek to rely.  Its submissions did not make it clear that it was objecting to my determining the costs below, or the costs of the appeals, or both.    
34	In those circumstances, I will set out my preliminary views on both costs below and of the appeals.  I will not authenticate orders until seven days after I publish these reasons, so that either party may, if it wishes to do so, contend for some other form of costs order.
G.1  Costs below
35	Subject to para 36 below, the appellants should have their costs below to be assessed in default of agreement on the standard basis at the scale amount appropriate to the award of damages awarded, which I understand is Scale G.  Despite the fact that the appellants had offered to accept $80,000, and they have obtained an award greater than that, I am not prepared in circumstances such as these where the evidence was left in a rather unsatisfactory state to order costs on the indemnity basis.  
36	The Magistrate ordered the appellants to pay Austral’s costs of their application to reopen made by their 17 May 2022 summons which costs are to include the 19 May 2022 hearing.  The appellants failed to persuade me that the Magistrate erred by refusing to permit them to reopen their case.  Those orders made below should not be disturbed. 
G.2.  Costs of the appeals 
37	The appellants were substantially successful in their appeal.  They persuaded me that the Magistrate had erred in his assessment of damages, and have obtained a substantially larger award of damages in their favour.  They should subject to para 38 below get their costs of their appeal (proceeding S ECI 2022 04572).  
38	As noted above, the appellants failed to persuade me that the Magistrate erred in refusing to permit them to reopen their case.  This ground of appeal was a discrete attack on a separate decision made by the Magistrate following the filing by the appellants of a summons after his Honour had delivered his reasons.  It was a relatively minor aspect of the appeals, but, nonetheless, a reduction of their costs of their appeal by 10% is appropriate, being a broad brush estimate directed at achieving substantial justice rather than arithmetic precision.  
39	Austral was unsuccessful in its appeal.  It should pay the costs of that appeal (proceeding S ECI 2022 05112).
40	I will give Austral an indemnity certificate under s 4 of the Appeal Costs Act 1998 in respect of the appellants’ appeal (proceeding S ECI 2022 04572).
H. Disposition 
41	Unless a party files and serves a submission in which it contends for the making of different costs orders, I will, in seven days’ time, authenticate orders in the following form:
(a)	In proceeding S ECI 2022 04572 :
1.	The appeal be allowed.
2.	Paragraph one of the orders made by the Magistrates’ Court of Victoria in Case No J12518447 on 10 October 2022 and para one of the orders made on 19 July 2022 be set aside, and in lieu thereof it be ordered that:
a.	The defendant (Packaging Logistics Pty Ltd t/as Austral Aluminium Products) pay to the plaintiffs (Ms Tran and Mr Le) damages in the sum of $85,940.80 together with damages in the nature of interest in the sum of $14,221.44.
b.	The defendant (Packaging Logistics Pty Ltd t/as Austral Aluminium Products) pay the plaintiffs’ (Ms Tran and Mr Le) costs (such costs not to include its costs of the plaintiffs’ 17 May 2022 summons) to be taxed in default of agreement on Magistrates’ Court scale G.
3.	The respondent (Packaging Logistics Pty Ltd t/as Austral Aluminium Products) pay the appellants (Ms Tran and Mr Le) 90% of their costs of the appeal, to be taxed in default of agreement on the standard basis.
4.	The respondent (Packaging Logistics Pty Ltd t/as Austral Aluminium Products) be granted a certificate under s 4 of the Appeal Costs Act 1998 (Vic).
(b)	In proceeding S ECI 2022 05112:
1.	The appeal be dismissed.
2.	The appellant (Packaging Logistics Pty Ltd t/as Austral Aluminium Products) pay the respondents (Ms Tran and Mr Le) the costs of the appeal, to be taxed in default of agreement on the standard basis.