Sydney Local Health District v Macquarie International Health Clinic Pty Ltd [2020] NSWCA 274

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Sydney Local Health District v Macquarie International Health Clinic Pty Ltd [2020] NSWCA 274 Hearing dates: 25–29 May 2020 Date of orders: 02 November 2020 Decision date: 02 November 2020 Before: Bell P; Gleeson JA; Payne JA Decision: (1) Appeal allowed. (2) Cross-appeal dismissed. (3) Set aside orders 1-7 and 9 of the orders made by Kunc J on 29 November 2019, and, in their place, make the following orders: (a) Judgment for Macquarie as follows: (i) mesne profits of $14,530,510 (comprising $9,486,564 in damages and $5,043,946 in interest) in relation to the Car Park Site together with interest under s 100 of the Civil Procedure Act 2005 (NSW) on that total amount from 4 May 2017; (ii) $1,048,800 in damages for additional building and consultancy costs; and (iii) $301,990 (excluding GST) in damages for remediation and excavation work. (4) Macquarie pay SLHD's costs of, and incidental to, the appeal. (5) By 9 November 2020, SLHD to file submissions not exceeding 15 pages about the question of costs and such additional orders, if any, it is submitted that Court should make (including the amount of interest to be awarded since 4 May 2017 referred to order 3(a)(i) and whether any order for restitution should be made). (6) By 16 November 2020, Macquarie to file submissions not exceeding 15 pages about the question of costs and such additional orders, if any, it is submitted that Court should make (including the amount of interest to be awarded since 4 May 2017 referred to order 3(a)(i) and whether any order for restitution should be made). (7) By 20 November 2020, SLHD to file submissions in reply not exceeding 5 pages. Catchwords: TORT – trespass – trespass on two different sites subject to long term leases – one site comprising an undeveloped block of land on which lessee was to construct and operate a private hospital – one site comprising an established car park – inquiry as to damages – initial claim for damages for loss of opportunity to earn profits from hospital site and car park site – damages for mesne profits – user principle – whether damages by way of mesne profits assessed by reference to actual usage and existing state of premises. TORT – trespass – period of trespass – manner of assessment – where order for possession made but orders stayed – whether trespass continued – whether trespass continued on refusal by High Court of application for special leave to appeal from Court of Appeal decision – whether stay order terminated on refusal of special leave application. DAMAGES – damages for trespass to land – various measures of damages – damages sought by way of mesne profits – history of mesne profits – mesne profits and the user principle – manner of assessment – assessment by reference to market rental of land trespassed upon – whether damages by way of mesne profits assessed by reference to actual usage and existing state of premises. DAMAGES – taxation – grossing up for taxation of damages for mesne profits – where damages calculated were in effect compensation for a lost commercial opportunity – whether it would have been unjust not to take into account identifiable and quantifiable taxation impacts on damages, in line with fourth principle enunciated in Daniels v Anderson (1995) 37 NSWLR 438; (1995) 118 FLR 248. PROCEDURE – where orders for possession made pending further order – consequence of refusal of special leave application – whether refusal of application for special leave had the effect of lifting stay of orders made by Court of Appeal – whether stay of orders needed to be expressly lifted by Court of Appeal. Legislation Cited: Civil Procedure Act 2005 (NSW) s 100 Income Tax Assessment Act 1997 (Cth) ss 20-20, 118-37 Uniform Civil Procedure Rules 2005 (NSW) r 36.4 Cases Cited: Allsop v Federal Commissioner of Taxation (1965) 113 CLR 341; [1965] HCA 48 Anderson v Bowles (1951) 84 CLR 310; [1951] HCA 61 Aslin v Parkin [1758] 96 ER 1215; [1758] 97 ER 501 Atlas Tiles Ltd v Briers (1978) 144 CLR 202; [1978] HCA 37 Attorney-General v Blake [2001] AC 268 Bailey & Bailey v Director-General Department of Energy Climate Change and Water [2010] NSWSC 979 Batchelor v Burke (1981) 148 CLR 448; [1981] HCA 30 Bilambil–Terranora Pty Ltd v Tweed Shire Council [1980] 1 NSWLR 465 Bocardo SA v Star Energy UK Onshore Ltd [2011] AC 380 Boensch v Pascoe (2019) 94 ALJR 112; [2019] HCA 49 British Transport Commission v Gourley [1956] AC 185 Bunnings Group Limited v CHEP Australia Ltd (2011) 82 NSWLR 420; [2011] NSWCA 342 Butler v Egg and Egg Pulp Marketing Board (1966) 114 CLR 185; [1966] HCA 38 Commonwealth Bank of Australia v Clune [2008] NSWSC 1125 Cullen v Trappell (1980) 146 CLR 1; [1980] HCA 10 Daniels v Anderson (1995) 37 NSWLR 438; (1995) 118 FLR 248 Darley Main Colliery Company v Mitchell (1886) 11 App Cas 127 Doe v Hare [1833] 97 ER 709; [1833] 3 LJ Ex 17 Eaton Mansions (Westminster) Ltd v Stinger Compania De Inversion SA [2012] EWHC 3354 Eaton Mansions (Westminster) Ltd v Stinger Compania De Inversion SA [2013] EWCA Civ 1308 Entick v Carrington (1765) 19 St Tr 1029 Experience Hendrix LLC v PPX Enterprises Inc [2003] EWCA Civ 323 Fink v Fink (1946) 74 CLR 127; [1946] HCA 54 Gaba Formwork Contractors Pty Ltd v Turner Corporation Ltd (1991) 32 NSWLR 175 Gill v Australian Wheat Board [1980] 2 NSWLR 795 Goodtitle v Tombs [1770] 95 ER 965 Green v Biddle, 21 US 1 (1823) Hackett v Inverugie Investments Ltd [1993] BHS J 126 Haines v Bendall (1991) 172 CLR 60; [1991] HCA 15 Halliday v Nevill (1984) 155 CLR 1; [1984] HCA 80 Hampton v BHP Billiton Minerals Pty Ltd (No 2) [2012] WASC 285 Hardy v Ryle (1829) 109 ER 224; (1829) 9 B & C 603 Hocking v Director-General of the National Archives of Australia (2020) 94 ALJR 569; [2020] HCA 19 Horsford v Bird [2006] UKPC 3; [2006] 1 EGLR 75 House v The King (1936) 55 CLR 499; [1931] HCA 40 Inverugie Investments Ltd v Hackett [1995] 1 WLR 713 Jackson v Abram (No 3) (District Court (SA), 24 September 2014, unrep) Jackson v Abram (2015) 124 SASR 339; [2015] SASCFC 175 Jegon v Vivian (1871) LR 6 Ch App 742 Johnson v Perez (1988) 166 CLR 351; [1988] HCA 64 Klewer v Official Trustee in Bankruptcy (No 2) [2010] NSWCA 258 Knott Investments Pty Ltd v Winnebago Industries, Inc (No 2) (2013) 305 ALR 387; [2013] FCAFC 117 Kuru v State of New South Wales (2008) 236 CLR 1; [2008] HCA 26 Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432 Laris v Lin [2017] NSWSC 279 Macquarie International Health Clinic Pty Limited v Sydney Local Health Network [2011] NSWCA 231 Macquarie International Health Clinic Pty Ltd v Central Sydney Area Health Service (Supreme Court (NSW), Windeyer J, 28 March 2000, unrep) Macquarie International Health Clinic Pty Ltd v Sydney Local Health District (No 6) [2014] NSWSC 1549 Macquarie International Health Clinic Pty Ltd v Sydney Local Health District (No 9) [2016] NSWSC 155; (2016) 215 LGERA 137 Macquarie International Health Clinic Pty Ltd v Sydney Local Health District (No 10) [2016] NSWSC 1587 Macquarie International Health Clinic Pty Ltd v Sydney Local Health District (No 11) [2017] NSWSC 1249 Macquarie International Health Clinic Pty Ltd v Sydney Local Health District (No 12) [2019] NSWSC 916 Macquarie International Health Clinic Pty Ltd v Sydney Local Health District (No 13) [2019] NSWSC 1590 Macquarie International Health Clinic Pty Ltd v Sydney Local Health District [2020] NSWCA 161 Macquarie International Health Clinic Pty Ltd v Sydney Local Health District [2019] NSWSC 1199 Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2008] NSWSC 738 Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2010] NSWCA 268 Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2010] NSWCA 348 Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2015] NSWCA 323 Martin v Porter (1839) 5 M & W 351 Mayfair Ltd v Pears [1987] 1 NZLR 459 MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657; [1991] HCA 3 McLaurin v Federal Commissioner of Taxation (1961) 104 CLR 381; [1961] HCA 9 Ministry of Defence v Ashman (1993) 25 HLR 513 Ministry of Defence v Thompson [1993] 2 EG 107 Montreuil v The Ontario Asphalt Company and the Caldwell Sand and Gravel Company (1922) 63 SCR 401 Mulvaney Holdings Pty Ltd v Thorne (No 2) [2012] QSC 146 New South Wales Cancer Council v Sarfaty (1992) 28 NSWLR 68 Nikolaou v Papasavas, Phillips & Co (1989) 166 CLR 394; [1989] HCA 11 Nowlan v Marson Transport Pty Ltd (2001) 53 NSWLR 116; [2001] NSWCA 346 Penarth Dock Engineering Co Ltd v Pounds [1963] 1 Lloyd's Rep 359 Perre v Apand Pty Limited (1999) 198 CLR 180; [1999] HCA 36 Phillips v Homfray (1871) LR 6 Ch App 770 Plenty v Dillon (1991) 171 CLR 635; [1991] HCA 5 Port Stephens Shire Council v Tellamist Pty Ltd [2004] NSWCA 353; (2004) 135 LGERA 98 Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17; [1985] HCA 14 Roberts v Rodney District Council [2001] 2 NZLR 402 Smith Kline & French Laboratories (Aust) Ltd v Commonwealth (1991) 173 CLR 194; [1991] HCA 43 Southwell v Bennett [2010] NSWSC 1372 Stoke-on-Trent City Council v W. & J. Wass Ltd [1988] 1 WLR 1406 Strand Electric and Engineering Co Ltd v Brisford Entertainments Ltd [1952] 2 QB 246 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; [1950] HCA 35 Swordheath Properties Ltd v Tabet [1979] 1 WLR 285 Sydney South West Area Health Service v Macquarie International Health Clinic Pty Ltd [2011] HCATrans 155 Taylor v Beere [1982] 1 NZLR 81 Tepko Pty Limited v Water Board (2001) 206 CLR 1; [2001] HCA 19 Tilly v Bridges (1667–1744) 2 Eq Ca Abr 588; 22 ER 495 Turner v Minister of Public Instruction (1956) 95 CLR 245; [1956] HCA 7 Water Board v Moustakas (1988) 180 CLR 491; [1988] HCA 2 Waugh v Attorney General [2006] 2 NZLR 812 Westpac v Jamieson [2016] 1 Qd R 495; [2015] QCA 50 Whisprun Pty Ltd v Dixon (2003) 77 ALJR 1598; [2003] HCA 48 Whitaker v Commissioner of Taxation (1996) 63 FCR 1; [1996] FCA 1716 Whitaker v Commissioner of Taxation (1998) 82 FCR 261; [1998] FCA 262 White v Overland [2001] FCA 1333 Whitwham v Westminster Brymbo Coal and Coke Co [1896] 1 Ch 894 Whitwham v Westminster Brymbo Coal and Coke Co [1896] 2 Ch 538 Winnebago Industries Inc v Knott Investments Pty Ltd (No 4) (2015) 241 FCR 271; [2015] FCA 1327 Yakamia Dairy Pty Ltd v Wood [1976] WAR 57 Texts Cited: C Sappideen and P Vines (eds), Fleming's The Law of Torts (10th ed, Thomson Reuters, 2011) Commonwealth Taxation Review Committee, Full Report (January 1975) DM Walker, The Oxford Companion to Law (Oxford University Press, 1980) E Bullen and SM Leake, Precedents of Pleadings in Actions in the King's Bench Division of the High Court of Justice (3rd ed, Stevens, 1868) E Cooke, "Trespass, Mesne Profits and Restitution" (1994) 110 LQR 420 JD Heydon, Heydon on Contract (Thomson Reuters, 2019) JD Heydon, MJ Leeming and PG Turner, Meagher Gummow & Lehane's Equity: Doctrines and Remedies (5th ed, LexisNexis Butterworths, 2015) JJ Edelman (ed), McGregor on Damages (20th ed, Sweet & Maxwell, 2018) MA Jones, AM Dugdale and M Simpson, Clerk & Lindsell on Torts (22nd ed, Sweet & Maxwell, 2017) RJ Sharpe and SM Waddams, "Damages for Lost Opportunity to Bargain" (1982) 2 Oxford J Legal Stud 290 Sir William Blackstone, Commentaries on the Laws of England (JB Lippincott Co, 1893) SM Waddams, The Law of Damages (5th ed, Canada Law Book, 2012) WR Cole, The Law and Practice in Ejectment (H Sweet, 1857) WS Holdsworth, A History of English Law (2nd ed, Methuen, 1937) Category: Principal judgment Parties: Sydney Local Health District (Appellant) Macquarie International Health Clinic Pty Limited (Respondent) Representation: Counsel: