Federal Court of Australia Ozmen Entertainment Pty Ltd v Neptune Hospitality Pty Ltd (No 8) [2022] FCA 1091 File number(s): NSD 1424 of 2017 Judgment of: RARES J Date of judgment: 5 September 2022 Date of further orders: 16 September 2022 Catchwords: HIGH COURT AND FEDERAL COURT – whether referee's report made under s 54A of the Federal Court of Australia Act 1976 (Cth) should be adopted – whether open to both parties to argue afresh factual issues determined by referee – whether error of principle, absence or excess of jurisdiction or patent misapprehension of the evidence demonstrated to justify rejection or variation of referee's report Legislation: Federal Court of Australia Act 1976 (Cth) s 54A Federal Court Rules 2011 Pt 28.6 Cases cited: Andros Springs (Owners) v World Beauty (Owners) (The World Beauty) [1970] P 144 Berry v CCL Secure Pty Limited (2020) 271 CLR 151 Chocolate Factory Apartments Limited v Westpoint Finance Pty Limited [2005] NSWSC 784 Hyundai Merchant Marine Co Limited v Dartbrook Coal (Sales) Pty Limited (2006) 236 ALR 115 Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26 Lopez v Gold Titan Pty Limited [2022] FCAFC 117 Malec v J.C. Hutton Pty Limited (1990) 169 CLR 638 Mununggurr v Channel Seven Sydney Pty Ltd (No 2) [2022] FCA 999 Neptune Hospitality Pty Ltd v Ozmen Entertainment Pty Ltd (2020) 375 ALR 489 Ozmen Entertainment Group Pty Ltd v Neptune Hospitality Pty Ltd (No 7) [2021] FCA 985 Ozmen Entertainment Pty Limited v Neptune Hospitality Pty Limited (2019) 369 ALR 644 Ozmen Entertainment Pty Limited v Neptune Hospitality Pty Limited [2017] FCA 1124 Ozmen Entertainment Pty Ltd v Neptune Hospitality Pty Ltd (No 2) [2018] FCA 1411 Ozmen Entertainment Pty Ltd v Neptune Hospitality Pty Ltd (No 5) [2019] FCA 904 Ruthol Pty Limited v Tricon (Australia) Pty Ltd (2005) 12 BPR 23,923 Division: General Division Registry: New South Wales National Practice Area: Admiralty and Maritime Number of paragraphs: 71 Date of hearing: 5 September 2022 Counsel for the Applicants: Mr M McGirr Solicitor for the Applicants: HNT Legal Solicitor for the Respondent: Barringer Leather Lawyers ORDERS NSD 1424 of 2017 BETWEEN: OZMEN ENTERTAINMENT PTY LTD First Applicant KANKI SEA TOURISM HOSPITALITY & ENTERTAINMENT PTY LTD Second Applicant AND: NEPTUNE HOSPITALITY PTY LTD Respondent order made by: RARES J DATE OF ORDER: 5 September 2022 THE COURT ORDERS THAT: 1. The parties bring in draft orders to give effect to the reasons delivered orally today on or before 7 September 2022. 2. On or before 8 September 2022, the applicants file and serve written submissions limited to five pages and any evidence in support as to their contentions that there be a stay of any order for payment by the second applicant to the respondent. 3. The respondent file and serve written submissions limited to five pages and any evidence in opposition on or before 14 September 2022. 4. The matter be stood over to 16 September 2022 for case management. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. ORDERS NSD 1424 of 2017 BETWEEN: OZMEN ENTERTAINMENT PTY LTD First Applicant KANKI SEA TOURISM HOSPITALITY & ENTERTAINMENT PTY LTD Second Applicant AND: NEPTUNE HOSPITALITY PTY LTD Respondent order made by: RARES J DATE OF ORDER: 16 September 2022 THE COURT ORDERS THAT: 1. The referee's report to the Court dated 13 May 2022 be adopted, subject to the following amendments: (a) deleting from the finding in paragraph 13 the words, "and the Receivers' payments to third parties of $266,324.40". (b) amending the table headed "Kanki's Damages and Costs" in paragraph 19 to read as follows: Kanki's Damages and Costs Profits from 25 July 2017 to return of vessel ($891,066.42) Return of vessel to 30 September 2019 ($ 33,675.20) Second period ($ 88,255.97) 5% chance of capacity being increased to 800 ($500,000.00) Profit share payable to Kanki up to 25 July 2017 ($ 77,003.21) Profit share already paid $265,731.90 Receiver's costs ($378,768.90) Interest on Receivers costs ($ 34,186.08) Interest on profits ($ 51,425.09) Interest on loss of chance (calculated to 30 Sep 2022) ($ 20,594.52) Kanki Total ($1,809,243.48) $1,168,054.31 (c) replacing the finding in the last sentence of paragraph 19 with the following: "The daily rate of interest accruing on the above balance is $432.07 from 1 April 2022, which amounts to a further $73,019.42, payable to Neptune as at 16 September 2022." 2. The second applicant pay the respondent $1,241,073.80 (inclusive of prejudgment interest). 3. On or before 8 September 2022, the applicants file and serve written submissions limited to five pages and any evidence in support as to their contentions that there be a stay of any order for payment by the second applicant to the respondent. 4. The respondent file and serve written submissions limited to five pages and any evidence in opposition on or before 14 September 2022. 5. The matter be stood over to 16 September 2022 for case management. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT (REVISED FROM THE TRANSCRIPT) RARES J: 1 On 3 April 2019, I gave reasons, following a long trial, in which I found that the respondent, Neptune Hospitality Pty Limited, had repudiated, first, the joint venture agreement that it made on 6 January 2016 (JVA) with Kanki Sea Tourism Hospitality & Entertainment Pty Limited and, secondly, the charter and licence agreement made on 6 January 2016 with Ozmen Entertainment Pty Limited, as owner of the vessel, Seadeck, and each of Kanki and Neptune, as charterers, as a bareboat charter: Ozmen Entertainment Pty Limited v Neptune Hospitality Pty Limited (2019) 369 ALR 644 (the principal reasons). Ozmen and Kanki were related companies. 2 The business of the joint venture was to use Seadeck for cruises on Sydney Harbour and later, Neptune used her on the Brisbane River. Members of the public would buy tickets for cruises or particular organisations or persons hiring her would pay for events on particular days. 3 On 9 May 2019, in Ozmen Entertainment Pty Ltd v Neptune Hospitality Pty Ltd (No 5) [2019] FCA 904, I made declarations that, based on Neptune's repudiation: on 25 July 2017, Kanki validly terminated the JVA, and the business between it and Neptune established under the JVA; on 4 August 2017 Ozmen validly terminated the charterparty; and Kanki was not liable to Ozmen in respect of any breach of the charterparty before 4 August 2017 or in respect of the use of the vessel on or after that date. 4 Neptune had continued to work the vessel because it refused to accept Kanki's termination of the JVA and Ozmen's termination of the charterparty. This led Ozmen and Kanki to apply to Burley J for orders that the vessel be redelivered. On 21 September 2017, his Honour refused to grant that relief: Ozmen Entertainment Pty Limited v Neptune Hospitality Pty Limited [2017] FCA 1124. 5 Subsequently, on 13 September 2018, his Honour ordered that receivers and managers be appointed to take control of the vessel and the joint venture pending the final hearing: Ozmen Entertainment Pty Ltd v Neptune Hospitality Pty Ltd (No 2) [2018] FCA 1411. The receivers engaged Neptune to continue to operate the business of the joint venture on their behalf. 6 Thus, on 9 May 2019, as a result of my decision, the receivers had to be discharged and Seadeck had to be redelivered to Ozmen. In order to discharge the receivers, Kanki had to pay the receivers over $265,000 in respect of the then unpaid creditors of the receivership that they had incurred in running the commercial operation, being the business of the joint venture, using Neptune as their agent. 7 There have been very many interlocutory hearings in this matter. The reference 8 Eventually, on 27 November 2020, I appointed the Honourable R.V. Gyles AO QC, a former judge of the Court, as referee under s 54A of the Federal Court of Australia Act 1976 (Cth) and Pt 28.6 of the Federal Court Rules 2011 to conduct a reference, initially on the following stated issues: 2. The Referee is to determine the following matters: a. The amount of any damages (including interest) payable by [Neptune] to the [Ozmen] for breach of contract, trespass and conversion in respect of the use of … Seadeck on and after 4 August 2017. b. The amount of any damages (including interest) payable by Neptune to the [Kanki] for breach of the [JVA]. c. The amount of profit of the joint venture business between Kanki and Neptune established under the JVA (Business) from 6 January 2016 to 25 July 2017, being the date of termination of the JVA. d. Any amount payable by Neptune to Kanki which relates to costs payable to the Receivers of the Business. e. The amount of Shared Costs calculated in accordance with the JVA (including interest) payable by Kanki to Neptune. f. Whether any of the following are payable by Kanki to Neptune pursuant to the JVA and if so, the amounts of those payments: i. Any advances on profits paid in the 2017 financial year to: 1. Kanki or at Kanki's direction; and 2. Mert Ozmen or at his direction. ii. Any tax liabilities in relation to the operations of the Business for the 2017, 2018 and 2019 financial years. iii. Any Superannuation liabilities of the Business for the 2017, 2018 and 2019 financial years. iv. Any wages payable to Mr Gavin Douchkov and Mr Mel Como for the period from 16 November 2016 to 28 April 2019. g. Whether Neptune is entitled to 50% of the value of the Seadeck brand and if so, what is the amount of that value? 9 Pursuant to those orders, the referee had power to consider and implement such manner of conducting the reference as would, without undue formality or delay enable a just, efficient, timely and cost effective resolution of the reference and to allow completion of his report. The referee could make any directions he considered appropriate for the conduct of the reference, but the rules of evidence would apply to any hearing conducted by the referee and that any contested evidence be given as he directed. 10 The referee then had a similar experience to the earlier fractious conduct of the proceedings. He needed to have multiple hearings, as a result of which he produced a total of seven reports, being the first, second, third and fourth preliminary determinations, a preliminary final determination, which the referee varied to the revised preliminary final determination after receiving further submissions from the parties as to computational matters that required correction, and on 13 May 2022, the final report to the Court. 11 In his first preliminary determination, the referee identified that there was a possible error in the expression of both order 13 that I made on 9 May 2019 and, as a result, order 2(e), of the orders made on 27 November 2020. The parties agreed that it was necessary for me to decide whether I had made a slip in the formulation of those two orders. 12 On 13 August 2021, after hearing the parties, I found that I had erred in the expression of order 13 made on 9 May 2019 and order 2(e) made on 27 November 2020: Ozmen Entertainment Group Pty Ltd v Neptune Hospitality Pty Ltd (No 7) [2021] FCA 985. I ordered that: 1. Order 13 made on 9 May 2019 be amended to state: "Kanki pay Neptune 50% of the following costs, calculated in accordance with the JVA: (a) the Shared Costs, as specifically set out in Schedule 1 of the JVA (being the amounts identified as the "Initial Loan" and "Further Costs"); (b) the RINA Survey Fee (as defined in the JVA) referred to in clause 9(d)(ii) of the JVA; (c) the Generator Costs (as defined in the JVA) referred to in clause 9(d)(iii) of the JVA; (d) the Awning (as defined in the JVA) referred to in clause 9(e) of the JVA; and (e) any costs of plant and equipment on the vessel required to conduct the joint venture business, incurred as contemplated under clause 9(d)(iv) of the JVA by Neptune between 22 October 2015 through to 25 July 2017 (being the date the JVA was terminated), with all such amounts to be assessed." 2. Order 2(e) made on 27 November 2020 be amended to state: "e. The amounts, if any, due (including interest) by Kanki to Neptune pursuant to order 13 made on 9 May 2019 as amended on 13 August 2021." (emphasis added) 13 In the final report, the referee found that the costs and damages recoverable by each of Neptune and Kanki against the other were as follows: Neptune's Recoverable Costs 50% of JVA Costs $1,627,376.37 Interest on 50% of JVA Costs 734,768.90 Ozmen and Kanki advanced profits 404,900.00 Interest on advanced profits 106,119.86 Directors' remuneration 92,000.00 Interest on Directors' remuneration 12,132.66 Neptune Total $2,977,297.79 Kanki's Damages and Costs Profits from 25 July 2017 to return of vessel ($891,066.42) Return of vessel to 30 September 2019 (33,675.20) Second period (88,255.97) 5% chance of capacity being increased to 800 (500,000.00) Profit share payable by Kanki up to 25 July 2017 (77,003.21) Profit share already paid 265,731.90 Receivers' costs (378,768.90) Creditors paid by Receivers (266,324.40 Interest on Receivers' costs and payments (58,223.44) Interest on profits (51,425.09) Interest on loss of chance (calculated to 30 Sep 2022) (20,594.52) Kanki Total ($2,099,604.91) $877,692.88 14 The effect of that summary was that the referee found Kanki owed Neptune $877,692.88 as a result of their mutual dealings. The disputed portions of the final report 15 Each of Kanki and Neptune seek to challenge certain of the referee's findings in the final report so as to vary them before it is adopted. Some of their challenges overlap. The contested claims are: (1) Neptune claimed that the referee should have disallowed any of the estimated loss of profit of $33,675.20 for the balance of the original term of the JVA (between May 2019 and 1 October 2019) that he calculated as Kanki's share of what it would have earned had Neptune not repudiated the JVA (the 2019 profit issue). (2) Kanki disputed the size of the discount of 66.67% that the referee applied to the second period profit (between October 2019 and October 2022). It contended that the referee erred in finding that the discount should have been more than about 50% even though he found that it was not more likely than not that, after the initial term of the JVA expired in October 2019, the option to renew the JVA would not be exercised. Kanki sought that this issue be remitted for further consideration (the JVA option issue). (3) Kanki claimed that the referee's allowance of 5% should be increased to 40% in respect of the possibility that, during the second period, the authorised passenger capacity of the vessel could have been increased from 450 to 800 if the option to renew the JVA were exercised. On the other hand, Neptune claimed that there was not even a 5% chance of the capacity increasing and the referee should have found there was no chance of any such increase (the passenger capacity issue). (4) Neptune claimed that Kanki should not have been awarded any of the damages of $88,255.97 for the second period (the second period damages issue). (5) Kanki claimed that the finding that it had consented, by implication, to Neptune incurring expenditures, which the referee included in the shared costs (under amended order 2(e)) and was thus liable for 50% of those costs. Kanki sought that the assessment of the shared costs be remitted for further consideration (the shared costs issue). (6) Neptune claimed that the referee should not have given Kanki credit of $266,324 for the amount that it paid to the receivers to meet their liabilities to third party creditors (the third party creditors issue). (7) Neptune contended that the referee erred in finding that it had not established that there was any evidence to support its argument that it had elected to sell its half-share of the Seadeck brand (the brand sale issue). Principles as to adoption of a referee's report 16 The parties sought to rely on a large volume of evidentiary material in support of their propositions. I rejected some of that evidence when objection was taken to it at the commencement of the hearing today. In Mununggurr v Channel Seven Sydney Pty Ltd (No 2) [2022] FCA 999 at [22], I summarised the principles for the adoption of a referee's report in a manner that both parties accepted as applicable to resolution of the current issues and said: In approaching the question whether a referee's report should, or should not, be adopted in whole or in part under r 28.67, the Court applies well-settled principles. McDougall J set these out in a much-cited, but curiously, unreported decision: Chocolate Factory Apartments Ltd v Westpoint Finance Pty Ltd [2005] NSWSC 784 at [6]–[8]. In Sheehan v Lloyds Names Munich Re Syndicate Ltd [2017] FCA 1340, the Chief Justice rehearsed those principles in his reasons at [9]–[12], saying (at [10]): Once a referee's report is provided to the Court, the Court will then hold an adoption hearing if adoption of the report is contested. The principles regarding the adoption of a referee's report, albeit within the context of the Supreme Court Rules 1970 (NSW), were distilled succinctly, but comprehensively, by McDougall J in Seven Sydney Pty Ltd v Fuji Xerox Australia Pty Ltd [2004] NSWSC 902 at [12]. They include that a Court should be reluctant to allow factual issues determined by a referee to be argued afresh in Court: Seven Sydney [2004] NSWSC 902 at [12] per McDougall J; Chocolate Factory Apartments Ltd v Westpoint Finance Pty Ltd [2005] NSWSC 784 at [7] per McDougall J. Some error of principle, absence or excess of jurisdiction or patent misapprehension of the evidence should generally be demonstrated to justify the rejection of the referee's report: Super v SJP Formwork 29 NSWLR at 563. The Court will generally not reconsider disputed questions of fact where there exists factual material that is sufficient to entitle the referee to reach the conclusions that he or she did, particularly where the disputed conclusions are made in a technical area in which the referee possesses appropriate expertise: Seven Sydney [2004] NSWSC 902 at [12] per McDougall J. Furthermore, the discretion to reconsider a referee's factual findings will generally only be exercised if the findings are such that no reasonable finder of fact could have made that finding: Franks v Berem Constructions Pty Ltd [1998] NSWCA 87 at 11 per Hodgson CJ in Eq. However, the determination of questions of law and the application of legal principles to facts found by the referee is a matter for the Court: Homebush Abbattoir Corporation v Bermria Pty Ltd (1991) 22 NSWLR 605 at 609; Super v SJP Formwork 29 NSWLR at 563; and Seven Sydney [2004] NSWSC 902 at [12]. 17 In Chocolate Factory Apartments Limited v Westpoint Finance Pty Limited [2005] NSWSC 784 at [7], McDougall J stated, the principles that the Chief Justice summarised, in the passage above. McDougall J explained (at [7] (6) and (7)) in his summary of principles that, ordinarily, the court will only intervene where the referee has been shown to have patently misapprehended, or lacked an understanding of, the evidence (as distinct from according different aspects of it different weight) or arrived at a finding that no reasonable tribunal of fact could have reached. McDougall J held that, generally, a referee's findings of fact should not be re-agitated in the court. He said that the court will not reconsider disputed questions of fact where there is factual material sufficient to have entitled the referee to reach the conclusion that he or she did, particularly where that is in a technical area or where the findings are based upon a choice between conflicting evidence. The issues 18 It is convenient to deal with the issues that the parties raised in turn. (1) The 2019 profit issue 19 The referee found, in the preliminary final determination: Damages for the time between the return of the vessel and the end of the first period on 1 October 2019 under the JVA will be pro-rata'd from the results for period from 1 July 2018 to April 2019 but on the basis of 50% of profits to Kanki. The starting point is the Xero accounts from 1 July 2018 to 30 April 2019 adding back depreciation and amortisation including the Borella account and ignoring interest. That total is $595,338 (included in the total in paragraph 9). Those accounts are for 9 months. The extra period is approximately 5 months. A pro-rata on that basis is close enough for what is an imprecise extrapolation. That predicts a profit of $330,000 with 50% or $165,000 to Kanki. I am not satisfied that there was any realistic chance of an increase in capacity of the vessel until the end of the first period. Both sides would have welcomed that result but, as remarked in paragraph 3 of the Fourth Determination, no method of curing the deficiency has been proposed by the Applicants and no evidence led as to what they have done since retaking possession. The evidence of Mr Parker, the 2017 Certificate of Survey and the 2019 Report of Surveyor Mitchell give no support to that possibility, at least in this time frame. Once the vessel had been returned to Ozmen, it should be assumed that Kanki had control of it for commercial purposes. The duty to mitigate damages requires consideration. No evidence has been led by the Applicants as to what was done with the vessel. That, while relevant, does not relieve me from deciding the issue based on the evidence and bearing in mind that Neptune is a wrongdoer. Kanki had no internal capacity to run the business and little local knowledge. It would need to find a potential partner or employ qualified staff – no easy task. It would then be necessary to gear up for trading. That would take time and I cannot be satisfied that Kanki had the financial capacity to gear up in that time. Furthermore, the period in question included winter. I do not regard it as appropriate to make an allowance for mitigation for this period. 20 Neptune argued that Kanki had not put any evidence before the referee of the trading results for the vessel from the time it regained possession of her, following my orders of 9 May 2019, until the end of the first period. It contended that there was no proof that, in those circumstances, Kanki had suffered any loss. Neptune submitted that the referee erred in principle, because he had found that neither Kanki nor Ozmen had called any substantive evidence of any claims for damages that they had. Neptune argued that Kanki wanted the ship back and it should be inferred that Kanki had put her to use, so that it had an onus to adduce evidence as to what, if anything, had happened during her trading and what, if any, loss or damage it suffered. Consideration 21 In Ruthol Pty Limited v Tricon (Australia) Pty Ltd (2005) 12 BPR 23,923 at 23,932 [44], Giles JA, with whom Santow JA and Hunt AJA agreed said: The avoided loss principle only applies so far as the innocent party in fact gained a compensating advantage. The guilty party bears the burden of proving that loss had been avoided and the extent to which it had been avoided: Andros Springs (Owners) v World Beauty (Owners) (The World Beauty) [1970] P 144 at 154, 158; [1969] 3 All ER 158 at 161, 164; Simonius Vischer & Co v Holt & Thompson [1979] 2 NSWLR 322 at 361; Monroe Schneider Associates (Inc) v No 1 Raberem Pty Ltd (1991) 33 FCR 1 at 17; 104 ALR 397 at 412. The appellant submitted to the contrary, relying on Erie Natural Gas Co Ltd v Carroll [1911] AC 105 at 118–19, but the decision turned on weak but sufficient evidence that the claimed expense of setting up new gas wells, had been recouped on sale of the gas wells which it was said the innocent party had the burden of rebutting; this was an evidentiary burden once there was evidence of compensating advantage. The appellant also submitted that no question of burden of proof arose in the present case because the respondent's defence to the claim for rent was "in the nature of a demurrer", but there is no substance in this submission. It was for the appellant to prove that the respondent had gained an actual benefit, and what benefit. The respondent may have been using borrowed money and not been advantaged by the delay, or been disadvantaged; if it was using its own money and left the purchase money idle, or used it unprofitably, the avoided loss principle did not require the allowance of a notional amount in favour of the appellant. (emphasis added) 22 In Hyundai Merchant Marine Co Limited v Dartbrook Coal (Sales) Pty Limited (2006) 236 ALR 115 at 136 [85], Kiefel J held: In my view the basis for the rule, upon which the defendants rely, is the existence of a particular factual situation – one where, as a result of the charterer's repudiation, the shipowner has a vessel available for use. In these circumstances the ordinary application of rules as to mitigation require the shipowner to seek another cargo for that vessel to limit the loss at which would otherwise suffer, or explain why that was not possible. The rule does not itself create a factual situation pertaining to the shipowner. It does not operate, like a rule of evidence, so as to create an assumption. Each case, where damages are claimed because of a failure to deliver cargo, will turn upon its own facts and the evidence relating to the position of the shipowner. (emphasis added) 23 Although Neptune relied on what Kiefel J said in support of its contention that the referee erred, I am unable to see how that follows. Her Honour was explaining that each case depended on its own evidentiary context. In Andros Springs (Owners) v World Beauty (Owners) The World Beauty [1970] P 144, at 154F–G, Lord Denning MR, with whom Fenton Atkinson LJ agreed at 158C–E, said: It must be remembered too, that it is for the defendant to prove the value of the advancement. It is he who prays in aid mitigation of damage. He must prove, therefore, the value of it. 24 Here, as Neptune contended, Kanki did not place any evidence before the referee of what, if any, trading occurred and what, if any, profits or losses arose after Kanki regained possession of Seadeck, in May 2019, to the end of the term of the JVA in October 2019. However, Kanki's case was that because it had a contract, it was entitled to expectation damages flowing from the breach in respect of earning profits from the performance of the JVA, which right accrued at the time of its acceptance of Neptune's repudiation in July 2017. 25 The referee held that it was for Neptune to prove that Kanki had failed to mitigate its loss or earn any return. He found that Neptune had not proved that Kanki had lost less than the value of its expectation damages from earning both the profits and the loss of a chance of recovering on the minimum profit guarantee in cl 10(n) of the JVA in the second period: Ruthol 12 BPR at 23,932 [44]. 26 I am unable to see any error of principle in the referee's finding. Indeed, it appears to accord with the authorities to which I have referred. (2) The JVA option issue 27 In the fourth preliminary determination, the referee examined whether the JVA would have been renewed for three years by the exercise of the option for the second period commencing in October 2019. He found that it was possible Neptune would have opted to do so because the vessel was profitable, albeit not in the same realm as the parties had contemplated in their negotiations for the JVA and charterparty. He also found that the relationship between the parties was not good once the business commenced to operate due to the Seadeck's inability to carry 800 passengers, which made the profitability of the JVA marginal, and that the parties were in dispute about the profitability at the time leading up to Neptune's repudiation. 28 The referee found that a second term was not probable but remained a possibility that needed to be assessed. In his preliminary final determination, he found: The assessment of damages must also consider the time post the first period. This was discussed in paragraphs 8 to 12 of the Fourth Determination. A favourable outcome for Kanki would have been that the option was exercised for the second period from October 2019 to October 2022 and that it traded in line with the results for the 9 months to April 2019 but increased by say 20% per annum as it became better known and to take account of a possible increase in capacity but of less than 800 persons. That would indicate a profit of $706,047.77. That would need to be discounted for COVID, being one of the possible contingencies that eventuated, by at least 25% leaving $529,535.82. As it was not more likely than not that the option would be exercised, that figure would need to be discounted by say two-thirds to $176,511.94 with $88,255.97 to Kanki plus interest of $5,737. (emphasis added) 29 Kanki argued that the referee's discount of two-thirds of the net profit that he estimated would be earned, after discounting for the possibility of an event such as COVID-19, was manifestly unreasonable. Kanki contended that the referee gave no sufficient reasons to explain why there should have been any greater discount than a 50% chance as opposed to the much larger figure of two-thirds discount. It submitted that the referee needed to explain why he had selected a discount as large as he did. 30 For its part, Neptune argued that because the option did not have to be exercised, based on the reasoning of Bell, Keane and Nettle JJ in Berry v CCL Secure Pty Limited (2020) 271 CLR 151 at 175 [37], the referee ought to have applied the principle that, where a contract is rescinded for anticipatory breach, the court will assume that the wrongdoer would have continued to perform the contract by adopting the mode of performance most beneficial to it, so that, subject to the evidence, if the contract were lawfully terminable at the instance of the wrongdoer, damages should be assessed accordingly, rather than on the basis that the contract was bound to continue. By parity of reasoning, Neptune contended that, since it was not bound to exercise the option to renew, the referee erred in failing to give it the benefit of the least expensive mode of performance. Neptune also submitted that there was no basis to infer that it or its directors would have wanted to exercise the option to keep the venture alive, given the state of the relationship of the parties. It also argued that the referee had erred in including in his final report both the $88,255.97 in respect of the loss of the expected share of profits Kanki would have earned in the second period, and $500,000 in respect of the 5% chance of the minimum profit guarantee being realised. 31 In addition, late in the course of oral argument today, Neptune sought to contend that the referee did not explain why he concluded that he would award both the amount of the discount of 66.67% of Kanki's loss of profit for the second period, and the $500,000 for the 5% chance that it would benefit from the net profit guarantee. Consideration 32 In my opinion, Neptune should not be allowed to raise its new argument now. The referee made his findings clear in the preliminary final determination on which he allowed the parties to make submissions as to any corrections or how it should be revised. He ultimately did revise some miscalculations. At no point prior to late in the argument today, as Neptune conceded, had it raised this new point as one for consideration during the many hearings before the referee or even in its points of contention for the adoption hearing as to errors in the report. 33 In my opinion, Neptune should not be allowed to raise a wholly new argument that it did not put to the referee. 34 In Berry 271 CLR at 169 [29], Bell, Keane and Nettle JJ held that where a claimant bore the legal burden of establishing the amount of its loss or damage, the nature and circumstances of the wrongdoer's conduct may support an inference or presumption that shifts the evidentiary burden. They gave an example where the wrongdoer's repudiation of a contract made proof of the loss of the chance of its renewal, or an extension of its term, incapable of proof on the balance of probabilities. They said (at 170 [29]): it is considered just that the wrongdoer should suffer the resulting uncertainty to the extent that proof to the level of a real (more than negligible) possibility is regarded as enough. The worth of the chance is then valued by a process of informed estimation. (emphasis added) 35 Their Honours held (at 171 [32]) that, where a claimant seeks to recover the loss of a commercial opportunity of some value, greater than negligible, the valuation of that lost opportunity is ascertained by reference to hypotheses and possibilities which, though they are speculative and, therefore, not capable of proof on the balance of probabilities, can be evaluated as a matter of informed estimation. Bell, Keane and Nettle JJ held (at 136 [39]) that, while the claimant bore the evidentiary burden of proof, in the sense of bearing the ultimate burden to establish its case on the balance of probabilities, the burden of proof, in the sense of introducing evidence, is liable to shift consistently, "as one scale of evidence or the other preponderates". 36 Here the referee necessarily was dealing in hypotheses and speculation. It was clear that Neptune wished to proceed with the JVA and asserted, until my findings in the principal reasons to the contrary, that despite its repudiating conduct, the JVA continued in full force and effect. It had resisted the attempts of both Kanki to terminate the JVA and Ozmen to terminate the charterparty. There was a substantial basis in the evidence for the referee to consider that there was some possibility, despite the difficulties in the relations between the parties, that the option to renew the JVA for the second period would be exercised, albeit he found that, on the balance of probabilities, this was not likely to occur. In that context, it was open to the referee to come to the view that, from the time of Neptune's breach in late July 2017, albeit unlikely, there was more than a remote possibility that the parties, despite their difficult relationship, may have wished to continue operating the vessel and JVA because both needed to recoup expenditure they had made in the unfortunate Seadeck venture. 37 It was for the referee to determine what he found, in the preliminary final determination, was the likelihood of Kanki earning its half-share of the profit for the second period and being able to recoup on the profit guarantee in cl 10(n) of the JVA. He found that there was a one-third possibility of Kanki achieving that sum as part of his informed speculation. There is nothing apparently, let alone, manifestly, unreasonable in his finding of the quantification of the chances. The referee based that finding on evidence before him, much of which was contested. The difficulty of estimation is the very issue which the referee was required to resolve. That could not be done with any mathematical certainty, as I explained in my concurring reasons in Lopez v Gold Titan Pty Limited [2022] FCAFC 117 at [39] and [40]: Bell P [in Searle v Commonwealth of Australia (2019) 100 NSWLR 55] held that it is not necessary for a judge, when assessing damages for loss of a chance, to nominate a particular percentage of probability to the potential for realisation of the chance. He said "to insist on this would be prone to artificiality" and that a global approach may beused. That can involve a measure of guesswork when there are too many uncertainties in play, such as working through what contracts may have been made and what profits would have been earned, as Sheller, Stein and Giles JJA held in Fightvision Pty Ltd v Onisorou (1999) 47 NSWLR 473 at 507 [147] (see Searle 100 NSWLR at 99–100 [205]–[208]). Moreover, as Stewart J, with whom Besanko and Banks-Smith JJ agreed on this issue (at 57 [1]), held in PKT Technologies (formerly known as Fairlight.AU Pty Ltd) v Peter Vogel Instruments Pty Ltd (2020) 376 ALR 55 at 82–83 [148]–[155], a judge's assessment of damages for loss of a commercial opportunity can be set aside for an identifiable error in the approach that he or she took, but mere sparseness of reasoning in arriving at the assessment will not necessarily warrant appellate interference. That is because the judicial evaluation is one arrived at by "informed estimation" as Brennan J said in Sellars 179 CLR at 368: see too Generic Health Pty Ltd v Bayer Pharma Aktiengessellschaft (2018) 267 FCR 428 at 472 [182]–[184] per Allsop CJ, Yates and Beach JJ. 38 In my opinion, neither party demonstrated that the referee erred in arriving at his assessment of the value of the loss of the chances, and I do not consider that there is any basis to disturb it. (3) and (4) The passenger capacity and second period damages issues 39 Each of Kanki and Neptune referred to aspects of the evidence before the referee including survey reports and the general arrangement of Seadeck relating to her passenger-carrying capacity. In addition, Neptune relied on the evidence of Grahame Parker, a naval architect, that it put before the referee. I rejected Neptune's attempt to adduce further evidence from Mr Parker based on his subsequent physical inspection of the vessel. Neptune gave no explanation as to why he had not inspected her before he gave his evidence to the referee. 40 Each of the parties sought to argue that the referee should not have made the following findings, in the preliminary final determination, in respect of the carrying capacity of the vessel: I am not satisfied that there was any realistic chance of an increase in capacity of the vessel until the end of the first period. Both sides would have welcomed that result but, as remarked in paragraph 3 of the Fourth Determination, no method of curing the deficiency has been proposed by the Applicants and no evidence led as to what they have done since retaking possession. The evidence of Mr Parker, the 2017 Certificate of Survey and the 2019 Report of Surveyor Mitchell give no support to that possibility, at least in this time frame. … Some allowance should be made for the speculative possibility that the capacity of the vessel could have been increased to 800 persons with appropriate licences during the extended term so triggering the profit guarantee for, say, two years. The uncertain funding of that possibility weighs on assessment as does the time the vessel may have been out of service. I would assess that possibility on a generous basis as no more than 5% of 2 years' guarantee of $500,000 to Kanki. This is not a claim for damages for breach of cl 7(b) of the Charter. (emphasis added) 41 The importance of those findings arose out of Neptune's obligation, pursuant to cl 7(b) of the charterparty (as I found and the Full Court affirmed: Neptune Hospitality Pty Ltd v Ozmen Entertainment Pty Ltd (2020) 375 ALR 489 at 495 [24]), to do all things necessary throughout the term of the charter to ensure that the vessel was in class, in survey and to maintain any relevant permits, licences, certificates, registrations or permissions, in the context that cl 7(a) required she be fully classed and surveyed for a vessel of her type to allow her to be used for the purpose of the business and to carry up to 813 passengers. Neptune's obligation included, but was not limited to, satisfying any requirements of the Australian Maritime Safety Authority, the New South Wales Maritime Division of the Roads and Maritime Services or any other relevant regulatory authority. 42 In the event, as I found in my principal reasons, in early 2016 when the vessel came to be surveyed, to the surprise of all parties to the litigation, the surveyor certified Seadeck in her then condition and arrangement as only to be capable of carrying 450 passengers. That had a significant impact on the basis on which the parties had contracted. Neptune had guaranteed in cl 10(n) of the JVA, that subject to Seadeck being fully licenced by the Independent Liquor and Gaming Authority (of New South Wales) with standard trading hours and a legal capacity of 800 passengers, Kanki's share of the net profit would be at least $5 million for each of those years of operation to 30 September 2017, 2018 and 2019. 43 Of course, as a result of the surveyor's decision to limit the vessel's capacity to 450 passengers, Neptune was not bound to meet the guarantee in cl 10(n). I found that the parties proceeded for the first period, that is, the full three year term of the JVA, on the basis that Neptune would not be required to meet the minimum net profit guarantee in that time. However, there was an option to renew the JVA for a further three year term. 44 In essence, Kanki argued that prior surveys and other documents in evidence before the referee showed that Seadeck had a passenger carrying capacity, in some instances, in excess of 800 persons, and in others of over 740. It contended that the referee's allowance of five per cent for the chance of the vessel being able to increase her passenger capacity to at least 800 passengers in the last two years of the second period was too low and should be increased substantially to 40 per cent. It contended that it was the innocent party deprived of the benefit of the contract in the JVA and that it was entitled to the benefit of any uncertainties in the achievement of that contractual obligation. 45 For its part, Neptune contended that the referee's statement, that there was "[a] speculative possibility that the capacity of the vessel could have been increased to 800 persons with appropriate licences during the extended term," was determinative against giving any allowance at all for the loss or the chance. It argued that there was no evidence that the referee's speculation about that possibility realistically could have come to fruition so as to justify the award of any damages at all based on what Deane, Gaudron and McHugh JJ had said in Malec v J.C. Hutton Pty Limited (1990) 169 CLR 638 at 643, namely: But unless the chance is so low as to be regarded as speculative – say less than 1 per cent – or so high as to be practically certain – say over 99 per cent – the court will take chance into account in assessing the damages. (emphasis added) Consideration 46 I am not satisfied that the referee made any of the errors that either of the parties suggested so as to warrant any interference in his assessment of a 5% change of an increase in the vessel's carrying capacity in the last two years of the second period. As Deane, Gaudron and McHugh JJ went on to say in Malec 169 CLR at 643: Where proof is necessarily unattainable, it would be unfair to treat as certain a prediction which has a 51 per cent probability of occurring but to ignore altogether a prediction which has a 49 per cent probability of occurring. Thus, the court assesses the degree of probability that an event would have occurred, or might occur, and adjusts its award of damages to reflect the degree of probability. The adjustment may increase or decrease the amount of damages otherwise to be awarded. 47 When the referee used the expression "speculative possibility," he did not do so in the sense that Deane, Gaudron and McHugh JJ had given to a chance that it was less than 1% that must be ignored in assessing damages. He assessed the possibility of a 5% chance as being sufficiently significant to take into account, albeit that it was one which, necessarily, involved some degree of speculation, guesswork or estimation, as frequently must be undertaken by a tribunal of fact in assessing damages. There was evidence before him that enabled the conclusion to be reached that the vessel could carry, safely, over 800 passengers. There is nothing that indicates that the referee acted in a manifestly unreasonable way in arriving at his conclusion on an issue which, evidently, both sides fiercely contested. 48 Accordingly, I am not satisfied either party has made out its claim for interference in the referee's final determination on the passenger capacity or second period damages issues. (5) The shared costs issue 49 The JVA provided in cl 9(d)(iv) and (v): (iv) [Neptune] may fit out and install such plant and equipment on the Vessel as it requires for the conduct of the Business with notice to and consent from [Kanki]. (v) [Kanki] may not unreasonably withhold consent. 50 Kanki argued the referee erred in accepting that Neptune had incurred, with Kanki's implied consent, the extra expenses that it claimed before the referee as falling within the meaning of "shared costs" that it specified in calculations not in evidence before me. 51 In his second preliminary determination, following the amendments made on 13 August 2021 to the issues in the reference in order 2(e) made on 27 November 2020, the referee discussed whether the shared costs could be increased based on his construction of cl 9(d)(iv) and (v) of the JVA. He said: Any live issue will now be dealt with on the merits in this Reference on an objective basis but taking into account findings made in the case and evidence given in the case. Any increase is not limited by 6 January 2016. The need for approval protects Kanki. Approval can be implied as well as express. Proof of payment and an itemised bill can be established by Schedule 1 Costs dated 10 September 2020 provided by the respondent subject to particular objections by the applicants. The burden of proof will shift according to the practical onus general explained by he who avers should establish. The general onus of the claim for profits lies on Kanki, and the general onus to establish amounts owed to the respondent lies on it. 52 In the revised preliminary final determination, the referee returned to this issue, finding: I have been referred to the evidence at the trial by [one of Neptune's directors] Gavin Douchkov (pp. 481–483) dealing with the work in Sydney and the involvement of Mert Ozmen in it. No evidence was called from Mr Ozmen or any other witness from the Applicants about that or any other issue. That evidence establishes general notice of and consent or approval to the work involved, at least up to completion of the initial rebuild and refit preparatory to the Australian sea trials on 1 March 2016. It would also cover expenditure of the same nature in the future. The contractual procedures were not being strictly observed. The Applicants stood by while considerable work took place in improving the vessel funded by Neptune. That expenditure added value to the vessel for Ozmen and assisted in making it better adapted to the business to be conducted for the benefit of Kanki. Reversion to a strict approach when a solicitor was consulted cannot rewrite history. I consider that notice consent and approval can be inferred for expenditure incurred up to the Certificate of Survey on 1 October 2016 and a reasonable time thereafter to pick up delayed bills. Business commenced soon after and the nature and purpose of expenditure from then on was clouded. Communication as to finances from then on by Neptune was found at trial to be wanting. I disallow the first item under "H. Fit out and installation" and all items dated from 27 October 2016 on, apart from the last four items under Silver Chef that commenced well before 27 October 2016. As noted in the First Determination at para 10, and in the judgment of Rares J of 13 August 2021 (2021 FCA 985) at paras 8, 18, 19 and 21, the meaning of clauses 9(d)(iv) and (v) of the JVA is not crystal clear. I answered the questions of construction in short form in para a.i of the Second Determination. To spell it out, Kanki is obliged to repay Neptune 50% of the expenditure on fitting out and installing such equipment as Neptune requires for the conduct of the business on the vessel of which notice was given to and consent given by Kanki, such repayment being from and including the date when the costs were incurred. There is no contractual liability for interest apart from that spelled out in cl 9(d)(i). That construction gives effect to the opening words of clause 9 and the opening words of clause 9(d). It is consistent with the commercial purpose of the clause. It could not have been contemplated that Neptune would entirely fund improvements to the vessel that would advantage the owner, Ozmen and benefit Kanki as much as Neptune in the conduct of the business. (emphasis added) 53 Kanki contended that cl 9(d)(iv) and (v) required its express approval of any proposed expenditure, both as to the work to be done and the amount. It asked, rhetorically, what was the point of the JVA requiring it to be given notice of something so that it could express agreement or refusal, if its consent could be implied? Kanki argued that it needed to have notice of the proposed work and cost so that it could have the opportunity of considering whether to approve the work or not in accordance with the benefit conferred on it by cl 9(d)(iv). It contended that, in substance, the referee wrongly had sought to put it to proof that the expenses that Neptune claimed in the new calculations should be added to the costs in schedule 1 ought not to have been included as shared costs. That was because, Kanki argued, there was no evidence before the referee that it had notice in accordance with cl 9(d)(iv) and (v) of the JVA and, so, it could not have exercised its right to refuse consent to any of the items since it did not know specifically what Neptune intended to do. Consideration 54 In my reasons in Ozmen (No 7) [2021] FCA 985 at [18], I held that it was a matter for the referee to construe how clause 9(d)(iv) and (v) operated. Earlier, at [16] I said: The Full Court affirmed my construction of various parts of cl 9 and Sch 1 on the issues as to whether, and to what extent, Neptune could add to the shared costs as defined in Sch 1 that it had incurred prior to the entry into the JVA (see Neptune Hospitality Pty Ltd v Ozmen Entertainment Pty Ltd (2020) 375 ALR 489 at 532–534 [154]–[163] and grounds 19–22 set out at 512–515 [92]). However, their Honours did not deal with the present issue of how the words "Shared Costs", as used in order 13, ought be understood or, indeed, how cl 9 operated as it is also, infelicitously, expressed. 55 I found there, at [21], that all parties had accepted at the hearing, on 9 May 2019, that Neptune should be able to put forward its claim as to what the costs could and should be shared between it and Kanki. I found that the reference would determine whatever was open to Neptune to claim under the proper construction of the JVA, as an accrued right prior to its termination, subject to excluding any claim that could not be maintained because of any finding in the principal reasons. 56 At the hearing today, the parties did not put any evidence before me of the transcript of Mr Douchkov's evidence to which the referee referred in [25] of the preliminary final determination (see #[52] above). As I read his finding there, the referee concluded that, because of the interactions between Mr Douchkov and Mr Ozmen in relation to the work being done to bring Seadeck into a position where she could be licenced by all the relevant authorities to undertake the joint venture business, Mr Ozmen had general notice of, and either consented to or approved, the work needed to be done and waived strict compliance with the provisions of cl 9(d)(iv) and (v) the JVA, no doubt, because of the practicality involved. As the referee found, Neptune's expenditure added value to the vessel for the benefit of the owner, Ozmen, of which Mr Ozmen was then in control, and enabled her to carry on the proposed joint venture business. 57 I am unable to see any error of the kind necessary to interfere with a referee's finding of fact that would justify setting aside his award in respect of Neptune's entitlement to 50 per cent of the shared costs of $1,627,376.37. (6) The third party creditors issue 58 The referee found in the preliminary final determination: The Receivers' professional costs are dealt with under heading (d) in the Second Determination where it was held that Kanki should receive credit for those costs paid by it. The Applicants initially sought reimbursement in the context of another basis for damages. An entitlement to 100% was raised in oral argument and in the Second Determination. Neptune had a proper opportunity to respond. No evidence could have altered the position. The appointment of the Receiver was occasioned by the actions of Neptune and the professional costs paid by Kanki should be reimbursed to it. Kanki should also get credit for the amount paid by Kanki to the Receiver for payment of creditors. They were creditors to the business, rather than of Kanki; they are included in the accounts for the period and reduce profit so there is no double counting. (emphasis added) 59 Neptune argued that the referee erred by finding that, not only should Kanki receive credit for the whole of the profits earned during the receivership, but also was entitled to payment of the sum totalling $266,324.40 that it had paid the receivers to discharge their liabilities to their third party creditors that they had incurred in earning those profits. 60 In its submissions before me, Kanki was unable to explain any basis on which the referee's finding, that it was entitled to be paid not only the total profits but also the value of some expenditures (being the amount it paid the receivers to discharge their liabilities to the third party creditors) which the receivers utilised in generating those profits, did not involve double counting. Consideration 61 In my opinion, the referee's reasoning on this issue revealed a clear error of principle. The amount of expenditure on third party creditors that the receivers incurred to generate the profit was necessarily incurred as part of the operation of the business. Those creditors had to be paid out of the earnings of the joint venture business before there could be any profit available to either of the parties, had the joint venture continued, or to Kanki, as the beneficial owner of the business during the course of the receivership. Kanki cannot both have the benefit of the profits and require Neptune to pay the costs of the business that earned those profits. 62 In my opinion, the referee erred in principle by including the sum of $266,324.40 in his calculation of damages, which should be varied to exclude that amount. (7) The brand sale issue. 63 Neptune raised the brand sale issue based on the referee's following findings in the final report: 35 Order 12 of the orders of the Court made on 9 May 2019 provided for the transfer of relevant licenses and registrations of the vessel Seadeck from Neptune to Ozmen, recognising the termination of the Charter. 36 Order 20A ordered Kanki and Neptune to grant a licence to Ozmen to use the Shared Property listed in Attachment A until final determination of the proceedings on certain terms. The Shared Property included databases and systems, the trademark Seadeck, other intellectual property and some hardware including computers – broadly speaking, that which was being used to operate the business. 37 Notation 25 to the orders of the Court made the 9 May 2019 provided, inter alia, that Kanki has elected to purchase, if Neptune elects to sell, Neptune's half share in the Shared Property listed in Attachment A for an amount to be determined in these proceedings. 38 Neptune claims that it elected to sell. Kanki does not accept that and says that the failure to do so in a reasonable time amounts to repudiation that it has accepted. The evidence is less than satisfactory. There is no direct evidence of the election by Neptune. It says that it filed an interlocutory motion on 2 July 2019 in which it sought to have the Court note that it elected not to sell the Shared Property and make orders terminating the licence to Ozmen. It describes that as asking the Court to permit withdrawing an election that it had made and says that the Court did not permit that (or termination of the licence) to happen. I have not been referred to the terms of the motion or the evidence to support it. The only relevant Order was that Neptune should pay the costs on an indemnity basis. 39 Neptune refers to an email exchange between solicitors. That is not in evidence but has not been challenged by Kanki. On 8 August Kanki's solicitor wrote: "Does your client continue to claim the $600,000 with respect to the Seadeck brand in circumstances where you have informed us and the Court that your client does not wish to sell its share of the IP?" On 16 August the solicitors for Neptune replied: "As the court has determined that the licence remains in place, our client continues to assert its claim for half of the value of the brand." 40 In my opinion, the absence of direct or secondary evidence of the election is fatal to this claim by Neptune. (emphasis added) 64 Neptune argued that the referee erred in the last sentence of [38] because he referred to the order for payment of costs on an indemnity basis as being an order against Neptune when, in fact, on 29 July 2019, I had ordered Kanki to pay those costs because of its defaults in complying with earlier orders to resolving some of the outstanding matters. 65 I permitted Neptune to tender the evidence of its solicitor, Greg Leather, that it sought to put before the referee, after it had relied on the email exchange between solicitors that the referee accurately summarised in [39] of his reasons. Mr Leather had made an affidavit on 9 March 2022 on which Neptune sought to rely, which the referee rejected at that late stage of the reference. 66 Neptune argued that rejection was in error and that the referee could, or should, not have found that there was no evidence, direct or secondary, of any election by it to sell the brand to Kanki. Neptune contended that, in substance, the statement in its email of 16 August 2019, quoted in [39] of the referee's preliminary final determination, conveyed an election to sell. Consideration 67 In my opinion, the referee was entitled to take the view that Neptune should not be entitled at the very late stage of the reference to lead further evidence. But in any event, the statement in the email of 16 August 2019 did not, and could not, have amounted to evidence that Neptune had elected to sell the brand to Kanki. The referee treated the email exchange that he summarised as not in dispute. All that the statement in the 16 August 2019 email conveyed was that Neptune asserted a claim that it was entitled to half of the value of the brand. In notation 25 in the orders of 9 May 2019, I recorded: 25. Kanki has elected to purchase, if Neptune elects to sell, Neptune's half share in the Shared Property listed at Attachment A for an amount to be determined in these proceedings on the basis that: a. such amount will form part of the determination of the overall financial adjustments to be made between the parties, and will not be payable prior to that time; b. The security in order 21 above includes an allowance of $250,000 for payment of that amount; (emphasis added) 68 Kanki's solicitors' email of 8 August 2019 asked Neptune's solicitors directly whether Neptune, having stated that it did not wish to sell its share of the intellectual property, being the Seadeck brand, still maintained its claim. Neptune's response was simply that it maintained its claim to $600,000 without asserting in any way discernible that it had elected to sell the brand to Kanki. 69 In my opinion, in the 16 August 2019 email, Neptune was seeking to keep its options open and not to convey a precise position. In those circumstances, even if the referee had treated as evidence the assertion in the email exchange which he discussed in [39], that material could not have sufficed to demonstrate that Neptune had made an election to sell the brand to Kanki: Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26 at 41 per Deane, Toohey, Gaudron and McHugh JJ. Rather, the email exchange simply told Kanki no more than that Neptune was asserting that the value of the brand to it was worth $600,000. For those reasons, no variation of the referee's determination should be made in respect of the brand sale issue. Conclusion 70 The amount payable by Kanki to Neptune as found by the referee must be increased by the amount of the third party creditor's costs, but otherwise the final report should be adopted. 71 I will order that the parties bring in draft orders to give effect to the reasons delivered orally today, on or before 7 September 2022. I certify that the preceding seventy-one (71) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rares. Associate: Dated: 16 September 2022