case_outcome: followed

case_text: The factual background to this matter is set out at some length in the judgment of Greenwood J in Rogers v Asset Loan Co Pty Ltd & Ors [2006] FCA 434 at [8] [27]. The applicant and the respondents before his Honour were the same parties as are currently before me. Before his Honour, the applicant sought various orders, including interlocutory relief restraining the respondents from exercising a power of sale, and in respect of a number of loan agreements, deeds of settlement, mortgages and other instruments relating to various properties. 5 At that hearing the respondents submitted, and Greenwood J found, that the majority of Mr Rogers' claims for final relief involved claims related to the legal or beneficial interest of the applicant in property which vested in the trustee in bankruptcy, and accordingly in respect of which the applicant had no standing to institute legal proceedings ([2006] FCA 434 at [35]). However his Honour noted that s 116(2) Bankruptcy Act 1966 (Cth) (' Bankruptcy Act ') excised categories of property from the interests, rights, capacities and powers divisible among the bankruptcy's creditors, including: '... (g) any right of the bankrupt to recover damages or compensation; (i) for personal injury or wrong done to the bankrupt, the spouse of the bankrupt or a member of the family of the bankrupt; ... And any damages or compensation recovered by the bankrupt (whether before or after he or she became a bankrupt) in respect of such an injury or wrong.' 6 Mr Rogers claimed that the matters he sought to agitate before his Honour by way of final relief and interlocutory relief fell within the exemption contemplated by s 116(2)(g) Bankruptcy Act because, properly understood, the claims constituted a claim with respect to a 'wrong done to the bankrupt' and the right to recover damages or compensation for each wrong remained with the applicant. As his Honour summarised: 'In effect, Mr Rogers says a claim based upon conduct on the part of the respondents that bears the statutory character of misleading or deceptive conduct or unconscionable conduct on the part of ALC or ALCPL (or the respondents more generally) in connection with the supply of financial services reflected in the various deeds, is a claim for compensation for a wrong which Mr Rogers is entitled to assert.' ([2006] FCA 434 at [40]) 7 Before Greenwood J the respondents said that, to the extent that such a claim, however it might be formulated, is one with respect to a legal or beneficial interest of the bankrupt in land or involves any right, power or capacity in relation to such an interest, the claim vests in the trustee in bankruptcy. 8 After considering each of the applicant's claims for relief and the meaning of the phrase 'wrong done to the bankrupt' in the context of s 116(2)(g) , Greenwood J held that: 'Where the claim for final relief arising out of the conduct of a respondent reflects a claim with respect to both the rights of the bankrupt in property and a claim with respect to a wrong done to the bankrupt characterised as a claim by reference to the anxiety, stress and pain felt by the bankruptcy, the rights of action in respect of the bankrupt's interests in property vest in the trustee and those rights of action where the essential cause is emotional injury done to the bankrupt (in respect of a recognised cause of action) remain with the bankrupt.' (at [47]) 9 His Honour continued: 'It may be that when Mr Rogers or his advisers formulate a statement of claim in the proceeding, a claim might emerge which, in terms of its material facts, reflects a claim within the exemption reliant upon conduct which involves a contravention of ss 52 , 51AC or 60 of the Trade Practices Act 1974 (Cth) independently of any of the former rights of the bankrupt in property which have become vested in the trustee. At the moment the material does not establish any such right. The alleged contraventions of the Trade Practices Act 1974 (Cth) which are mere conclusionary assertions are relied upon as the basis for final orders with respect to the interests of the bankrupt in property which interests have become vested in the trustee.' (at [48]) 10 Similarly a claim by the applicant for interlocutory relief in the form of 'an order that the respondents do not harass, intimidate or coerce the applicant, his family or neighbours' was not a claim called in aid of a claim for final relief within the scope of s 116(2)(g) Bankruptcy Act , but rather was in connection with an injunction to restrain an exercise of power of sale in relation to a particular property by a secured creditor in aid of final relief in relation to that property. The applicant's interest in the property was an interest vested in his trustee. However his Honour left open the possibility that the applicant could properly formulate a claim for final relief within the exemption in s 116(2)(g) , and a claim for interlocutory relief in respect of relevant conduct, which claim might well be made by the applicant independently of his trustee in bankruptcy (at [48] and [51]). 11 In the notice of motion before me, the respondents seek orders in respect of what is, in essence, the applicant's attempt to take on board the comments of Greenwood J in Rogers v Asset Loan Co Pty Ltd , namely an attempt by the applicant to formulate his statement of claim so as to plead claims coming within the exemption in s 116(2)(g) Bankruptcy Act . 12 After the decision of Greenwood J was handed down, the applicant filed a statement of claim on 15 June 2006, and an amended statement of claim on 19 June 2006. 13 When I heard this notice of motion on 29 June 2006, it became apparent that the applicant required leave to further amend his statement of claim filed 19 June 2006. Mr Coulsen on behalf of the respondents consented to an adjournment of the matter to allow the applicant to be given an opportunity to re-plead. In making this suggestion Mr Coulsen said that this would be the last time his clients would so consent. Consequently, the matter was adjourned until 4 August 2006 and the applicant was ordered to file and serve an amended statement of claim by 21 July 2006. 14 When this matter came back before me on 4 August 2006, it became apparent that the applicant had in fact filed two further amended statements of claim during the adjournment period, one on 10 July 2006 and one on 20 July 2006. Nonetheless, and notwithstanding the inconvenience to the respondents as it appeared that the further amended statement of claim of 20 July 2006 had not been served on the respondents, in order for the matter to be heard the respondents did not object to the hearing proceeding on the basis of the statement of claim filed 20 July 2006. I adjourned the hearing for a short time to allow Mr Coulsen the opportunity to compare the two documents and if necessary amend his submissions. 24 As Greenwood J noted in his judgment ([2006] FCA 434 at [4]) with respect to the claims of the applicant against the respondents, the most immediate difficulty confronting the applicant is the question of whether he has standing in connection with this litigation, on the basis that a sequestration order in respect of the applicant's estate was made on 23 February 2005. His Honour explained: • the effect of s 58 Bankruptcy Act , which vests the property of the bankrupt in the registered trustee (at [36]) • the meaning of 'property of the bankrupt' for the purposes of s 58 , which is defined as 'the property divisible among the bankrupt's creditors; and any rights and powers in relation to that property that would have been exercisable by the bankrupt if he or she had not become a bankrupt' (at [36]) • the fact that property divisible amongst the creditors for the purposes in s 116 includes 'the capacity to exercise, and to take proceedings for exercising all such powers in, over or in respect of property as might have been exercised by the bankrupt for his own benefit at the commencement of the bankruptcy or at any time after the commencement of the bankruptcy and before his discharge' (at [37]) • that only the trustee in bankruptcy is entitled to seek remedial orders in respect of property, contractual rights, security interests, and related entitlements (at [43]) • that the exemption in s 116(2)(g) with respect to wrongs done to the bankrupt is limited to those cases where the essential cause of action is the personal injury done to the person or feelings of the bankrupt, as distinct from where the damages or part of them are to be estimated by reference to the bankrupt's rights of property (at [45]-[47]; cf Daemar v Industrial Commission of New South Wales (1988) 79 ALR 591 at 601, Cox v Journeaux (No 2) [1935] HCA 48 ; (1935) 52 CLR 713 at 721, Faulkner v Bluett (1981) 52 FLR 115 at 119) • that a claim with respect to a wrong done to the applicant characterised by reference to the anxiety, stress and pain felt by the bankrupt in respect of a recognised cause of action remains with the applicant under s 116(2)(g) Bankruptcy Act (at [46]) and • that in the case before his Honour the claims were not claims for damages founded upon immediate reference to the distress and anxiety caused to the bankrupt without reference to his rights of property (at [49]); further the applicant's claim for final relief was a consequential claim necessarily connected with the applicant's interests in property (at [50]). 25 It is unnecessary for me to add to the comments of Greenwood J with respect to the consequences of the bankruptcy of the applicant and its impact on his standing in the case before me. Clearly, for the applicant as distinct from his trustee in bankruptcy to have standing to maintain a cause of action it is necessary that he not only plead that a personal injury or wrong has been done to him, but that the essential cause of action is that personal injury or wrong has been done to him. 26 Throughout his statement of claim the applicant relies on breaches of ss 51AA , 52 and 60 Trade Practices Act as founding his causes of action. These sections read as follows: ' 51AA: Unconscionable conduct within the meaning of the unwritten law of the States and Territories (1) A corporation must not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories. (2) This section does not apply to conduct that is prohibited by section 51AB or 51AC . 52 : Misleading or deceptive conduct (1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. (2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1). 60: Harassment and coercion A corporation shall not use physical force or undue harassment or coercion in connection with the supply or possible supply of goods or services to a consumer or the payment for goods or services by a consumer.' 27 It is useful to make a number of preliminary points concerning these provisions before examining the substance of the applicant's complaint. 132 This is surprising in light of the finding of Greenwood J that, in view of his bankruptcy, the applicant lacked standing to pursue claims other than those which were clearly in respect of a personal injury or wrong done to the bankrupt or his family. Unfortunately, in my view the preponderance of the statement of claim appears to revisit a great deal of the material which was before Greenwood J, which his Honour held did not give rise to causes of action in respect of which the applicant had standing. 139 Although ordinarily a party should be given an opportunity to replead in accordance with the rules ( Turner v The Bulletin Newspaper Co Pty Ltd [1974] HCA 25 ; (1974) 131 CLR 69 per Barwick CJ (Mason J agreeing) at 81; cf Fox Symes at [95]) in my view it would be unjust to the respondents to allow the applicant yet another opportunity to re-plead. In particular I note: • Greenwood J had earlier dismissed an application by the applicant for interlocutory relief in this matter on the basis that, inter alia , the applicant lacked standing to bring the application, but noted that it was possible that the applicant could formulate a statement of claim involving rights which had not vested in the trustee in bankruptcy ( Rogers v Asset Loan Co Pty Ltd & Ors [2006] FCA 434 at [48] ) • on 15 June 2006 the applicant filed a Statement of Claim • on 19 June 2006 the applicant filed an Amended Statement of Claim, although this amended statement of claim was not provided to the respondents until 29 June 2006 when the parties appeared in Court • when this matter came before me for the notice of motion to be heard on 29 June 2006, it became apparent that the applicant would in fact need to file a further amended statement of claim. I ordered that the applicant be given 21 days in which to file a further amended statement of claim • the applicant did so in compliance with this order, but then also filed a second further amended statement of claim 10 days later.


case_outcome: considered

case_title: Rose v Buckett [1901] 2 KB 449

case_text: To the extent that this conduct in allegedly burgling applicant's home and stealing documents constitutes undue harassment in breach of s 60 , a connection with the supply or possible supply of goods or services to a consumer or the payment for goods or services by a consumer must be established. The applicant does not plead how the conduct of the respondents in stealing documents constitutes undue harassment in relation to the supply of goods or services, or payment for goods or services. However rights of action in relation to unlawful access of the respondents to the applicant's home and his possessions are in the realm of tort and potentially relate to a personal injury or wrong to the applicant. In Rose v Buckett [1901] 2 KB 449 the defendants had entered the bankrupt's house on several occasions and seized goods, furniture and effects. The bankrupt alleged damage to premises, damage to goods and 'personal inconvenience and annoyance to himself and family, by being wrongfully deprived of his property and of the quiet enjoyment of his house and premises from time to time by the defendants'. Collins LJ said: 'Where the damages to property by trespass and conversion are merely nominal, the cause of action in respect thereof is not regarded as one affecting the value of the property passing to the trustee, so as to give him a right of action in respect thereof, but rather as a wrong personal to the bankrupt himself, which could not found an action by his trustee. This view is well put by Cresswell J in his opinion delivered to the House of Lords in Beckham v Drake. He says: "In (a number of cases) it was decided that rights of action for trespass to land or goods in the actual possession of a trader do not pass to his assignees if he becomes bankrupt, because those rights of action are given in respect of the immediate and present violation of the possession of the bankrupt, independently of his rights of property, and are an extension of the protection given to his person, and the primary personal injury to the bankrupt is the principal and essential cause of action".' (at 455-456, cf Stirling LJ at 457) 52 For present purposes however, I also note that the applicant has not particularised the nature of any personal injury he has suffered as a result of the respondents stealing his files and records, or indeed any other wrongs he alleges. He has also not drawn a nexus between the conduct of the respondents and any personal injury or wrong, or between the provisions of the Trade Practices Act and the wrongs he alleges. Although it is possible that the applicant experienced personal injury by being wrongfully deprived of his property and of the quiet enjoyment of his house and premises as was the case in Rose v Buckett , the manner in which the statement of claim is framed in respect of these facts could equally vest the trustee in bankruptcy with the claim, on the basis that any records of the applicant relevant to his financial position vested in the trustee and deprivation of those records gives rise to an action in the trustee. Accordingly, I refer to my comments in respect of Count 1 in this regard. 53 Accordingly, the applicant lacks standing in respect of this claim. 54 Similarly to Count 2, although the applicant claims that he suffered 'personal injury' in respect of this conduct of the respondents, the substance of this complaint is that he suffered financial injury in respect of transactions involving the Palmwood Drive Property. Claims with respect to financial damage have clearly vested in the applicant's trustee in bankruptcy. To the extent that a claim exists under ss 51AA and 52 Trade Practices Act in respect of these facts, it has clearly vested in the applicant's trustee in bankruptcy.


case_outcome: cited

case_text: The case before me is indeed a case where the observations of Lockhart J in Trade Practices Commission v Australian Iron and Steel Pty Limited (1989) 22 FCR 305 resonate: '[The Statement of Claim] fails to plead material facts, it contains confusing and irrelevant material, it uses ambiguous terms, pleads particulars rather than material facts and asserts conclusions or opinions.' (at 323) 138 To the extent that there is anything in the applicant's statement of claim which pleads a valid cause of action, in respect of which he has standing, then as Lockhart J also observed in Australian Iron and Steel : '...the defective parts are so inextricably intertwined with offending material that an oppressive burden is cast upon the respondents to spell out the alleged cause or causes of action. The whole pleading must be struck out.'


case_text: Although ordinarily a party should be given an opportunity to replead in accordance with the rules ( Turner v The Bulletin Newspaper Co Pty Ltd [1974] HCA 25 ; (1974) 131 CLR 69 per Barwick CJ (Mason J agreeing) at 81; cf Fox Symes at [95]) in my view it would be unjust to the respondents to allow the applicant yet another opportunity to re-plead. In particular I note: • Greenwood J had earlier dismissed an application by the applicant for interlocutory relief in this matter on the basis that, inter alia , the applicant lacked standing to bring the application, but noted that it was possible that the applicant could formulate a statement of claim involving rights which had not vested in the trustee in bankruptcy ( Rogers v Asset Loan Co Pty Ltd & Ors [2006] FCA 434 at [48] ) • on 15 June 2006 the applicant filed a Statement of Claim • on 19 June 2006 the applicant filed an Amended Statement of Claim, although this amended statement of claim was not provided to the respondents until 29 June 2006 when the parties appeared in Court • when this matter came before me for the notice of motion to be heard on 29 June 2006, it became apparent that the applicant would in fact need to file a further amended statement of claim. I ordered that the applicant be given 21 days in which to file a further amended statement of claim • the applicant did so in compliance with this order, but then also filed a second further amended statement of claim 10 days later.


case_text: The applicant also complains about the failure of the respondents to make payments to him pursuant to a Deed (pars 407-412). Refusal to advance funds in circumstances where a party is obliged to do so clearly falls into the realms of breach of contract: Rivkin & Co Ltd v Young (1996) 22 ACSR 589; Vision Telecommunications Pty Ltd & Ors v Australia and New Zealand Banking Group Ltd [2001] WASC 139 at [73] . There is no evidence before this Court supporting an allegation of breach of contract by the respondents. To the extent that there was such evidence, the claim would vest in the applicant's trustee in bankruptcy.


case_text: In my view no cause of action is disclosed by this Count. Nothing in the pleadings particularises any complaint with respect to the respondents or any of them refusing to lift the caveat as complained in par 683. If there was an issue with respect to the caveat and the respondents acting unlawfully, the New South Wales State Courts would have been the appropriate venue to raise it (cf comments of Dowsett J in Von Risefer v Permanent Trustee Company Pty Ltd [2001] FCA 1052 at [9] ). 124 Further, the applicant does not in his pleadings demonstrate the unequal bargaining positions which make s 51AA relevant. Section 52 appears irrelevant in this context. To the extent that the pleadings raise issues of coercion under s 60 , in my view the cause of action has vested in the trustee in bankruptcy as the facts as pleaded clearly relate to property of the bankrupt. 125 Personal injury is not particularised, and I refer again to my comments concerning Count 1.


case_text: A view has been expressed that the purpose of s 31A is to introduce a lower standard for summary dismissal and strikeouts under O 20 r 2 and O 11 r 6: cf Duncan v Lipscombe Child Care Services Inc [2006] FCA 458 at [5-8] ; Wearne v Southern Cross University [2006] FCA 1033 at [13] and Australian and International Pilots Association v Qantas Airways Limited [2006] FCA 1441 at [23] . It is unnecessary for me to decide this issue in the context of this matter. In my view the application of the applicant filed 7 April 2006 can be dismissed in accordance with either s 31A Federal Court Act or O 20 r 2 Federal Court Rules , and I should so order. ORDER 1. The proceedings in QUD130/2006 commenced by application filed 7 April 2006 by the applicant be dismissed. 2. The applicant pay the costs of and incidental to the proceedings to be taxed if not agreed. I certify that the preceding one hundred and forty-seven (147) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. Associate: Dated: 7 December 2006 Counsel for the Applicant: The Applicant appeared in person Counsel for the Respondent: CD Coulsen Solicitor for the Respondent: Whittle Lawyers Date of Hearing: 4 August 2006 Date of Judgment: 7 December 2006 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2006/1708.html


case_text: A claim in respect of defamation of the injured party so far as it concerns his credit, character and reputation remains with the injured party as it relates to a personal injury: ex parte Vine in re Wilson (1878) 8 Ch D 364, Wilson v United Counties Bank Ltd [1920] AC 102 at 111 and 128, Holmes v Goodyear Tyre & Rubber Co (Aust) Ltd (1984) 55 ALR 594. If this did give rise to a cause of action (and I make no comment as to this), in the absence of a Trade Practices Act claim or any other matter which enlivens the Court's jurisdiction, the only place it could be pursued would be in the State courts. 107 At best, the only cause of action I can identify from this Count is a possible defamation action by the applicant against the respondents (pars 619-622). As I explained earlier in this judgment in relation to Count 8, a claim in respect of defamation remains with the injured party as it relates to a personal injury: ex parte Vine in re Wilson; Wilson v United Counties Bank Ltd ; Holmes v Goodyear Tyre & Rubber Co (Aust) Ltd . If this did give rise to a cause of action (and I make no comment as to this), in the absence of a Trade Practices Act claim or any other matter which enlivens the Court's jurisdiction, the only place it could be pursued would be in the State courts. 112 As I explained earlier in this judgment in relation to Count 8, a claim in respect of defamation remains with the injured party as it relates to a personal injury: ex parte Vine in re Wilson; Wilson v United Counties Bank Ltd ; Holmes v Goodyear Tyre & Rubber Co (Aust) Ltd . If this did give rise to a cause of action (and I make no comment as to this), in the absence of a Trade Practices Act claim or any other matter which enlivens the Court's jurisdiction, the only place it could be pursued would be in the State courts.


case_text: In my view, to the extent that this is a cause of action under ss 51AA and 52 (and in my view the relevance of s 51AA is dubious) it is not one in respect of which the applicant has suffered personal injury within the meaning of s 116(2)(g) Bankruptcy Act . This is because, notwithstanding the claim that the applicant has suffered personal injury: a. Other than a statement that the applicant suffered personal injury, no injury is particularised or connection drawn between how a failure to warn and advise the applicant caused the applicant to suffer personal injury. A bare allegation that the applicant has suffered personal injury or wrong, without particularising the injury or wrong, or without stating the connection between the conduct complained of and the claimed personal injury or wrong, is not adequate to provide the applicant with standing to pursue litigation in the very limited circumstances of his bankruptcy. Particularising the damage and establishing the nexus would be necessary in any event. As explained in well-known comments of Bowen LJ in Ratcliffe v Evans (1892) 2 QB 524 at 532: 'The necessity of alleging and proving actual temporal loss with certainty and precision in all cases of the sort has been insisted upon for centuries... In all actions accordingly on the case where the damage actually done is the gist of the action, the character of the acts themselves which produce the damage, and the circumstances under which these acts are done, must regulate the degree of certainty and particularity with which the damage done ought to be stated and proved. As much certainty and particularity must be insisted on, both in pleading and proof of damage, as is reasonable, having regard to the circumstances and to the nature of the acts themselves by which the damage is done. To insist upon less would be to relax old and intelligible principles. To insist upon more would be the vainest pedantry.' (note similar comments by Dillon LJ in Lonrho plc v Fayed (No 5) [1994] 1 All ER 188 at 194, Branson J in Kirela Pty Ltd v Westfield Holdings Ltd [2002] FCA 1223 at [15] , Ryan J in PFD Food Services Pty Ltd v NAFDA Pty Ltd [2003] FCA 682 at [18] - [19] , and Smart AJ in Markisic v Dept of Community Services of New South Wales & Ors [2005] NSWSC 1373 at [115] ) b. The respondents are entitled to know the case they are to meet ( Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) [1916] HCA 81 ; (1916) 22 CLR 490 at 517; Bare v Pulham [1982] 148 CLR 568; Banque Commerciale SA (en liquidation) v Akhil Holdings Ltd [1990] HCA 11 ; (1990) 169 CLR 279 at 286, Barclays Bank v Boulter [1999] UKHL 39 ; [1999] 1 WLR 1919 at 1923; and note O 12 r 1(1) Federal Court Rules ) and the pleadings must be sufficiently clear, so that the case against the respondents is clear. c. If the claim is to be categorised as a claim in negligence which has resulted in financial loss, it properly lies with the trustee in bankruptcy: Faulkner v Bluett . d. If the claim is to be categorised as a breach of fiduciary duty or trust it properly lies with the trustee in bankruptcy. As pointed out by RD Nicholson J in Pridmore v Magenta Nominees Pty Ltd (1999) 161 ALR 458 at 468: 'In relation to s 58(1)(a) 'the property of the bankrupt' as defined in par 116(1)(a) would include any choses in action which the applicants had to enforce equitable rights. Such rights, being property being divisible among the creditors of the bankrupt, would vest in the official trustee. If the equitable rights arose after the sequestration order it would for the same reasons be 'property that is divisible amongst the creditors of the bankrupt' within s 58(6) and thus property to which s 58(1)(b) applies so that again the exercise of the rights would vest in the official trustee...' (note also Wily (as Trustee of the Bankrupt Estate of Fuller) v Fuller [2000] FCA 1512 ; Pascoe, in the matter of Hudson [2006] FCA 785) e. If the claim is categorised as a breach of ss 51AA or 52 , it is claim with respect to a commercial transaction which has now vested in the trustee in bankruptcy.


case_text: On 10 June 2005 I published reasons for judgment finding that native title can be recognised over the traditional lands of the Bardi and Jawi People on the Dampier Peninsular and in the inter-tidal zone and adjacent reefs Sampi v State of Western Australia [2005] FCA 777. On 4 November 2005 I published a draft determination to give effect to those reasons and to deal with some other issues outstanding from the primary judgment Sampi v State of Western Australia (No 2) [2005] FCA 1567.


case_title: Sampi v State of Western Australia (No 2) [2005] FCA 1567


case_title: Sampi v State of Western Australia (No 3) [2006] FCA 1716

case_text: On 30 November 2005 I made a native title determination over the land and waters in which I had found native title to exist. The orders then made expressly excluded, by agreement, certain small freehold areas in respect of which there were ongoing questions not raised at the trial of the action. Those questions were whether they were properly covered by the application and, if so, whether any extinguishment of native title on them could be disregarded because of the operation of s 47A of the Native Title Act 1993 (Cth) (the Act) Sampi v State of Western Australia (No 3) [2005] FCA 1716. 3 On 14 December 2005 programming orders were made for the filing of affidavits and written submissions in relation to the existence of native title on the adjourned areas. The adjourned hearing proceeded on 22 May 2006. For reasons I now publish, I am satisfied that the adjourned areas were not included in the native title application the subject of these proceedings. They can therefore not be included in the native title determination. This does not prevent a separate application for a native title determination being brought in respect of the adjourned areas. Having regard to the evidence taken and facts found in the primary proceedings it would seem that the only issue on a new application is likely to be the application of ss 47A and 47B of the Act to those areas. 4 The orders made on 30 November 2005 included the following as Order A: 'The proceeding stands adjourned by Order of the Court made 25 November 2005 in relation to the following areas which are not included in the Determination Area: (a) those portions of Dampier Location 25 as were comprised in Certificate of Title Volume 1670 Folio 883 when the native title determination application the subject of proceeding WAD 49 of 1998 was made, including Dampier Locations 371, 372, 373, 374, 404 and 405; and (b) the areas comprised in Certificates of Title Volume 1744 Folio 116 (Portion of Dampier Location 19), Volume 1744 Folio 117 (Portion of Dampier Location 69) and Volume 1744 Folio 118 (Dampier Location 21), generally shown on the Maps in Schedule 8.' I attach copies of enlargements of the two adjourned areas within the determination area.


case_text: The doctrine of restitution lies in the principle that a party should be restored to the position it was in prior to the payment of money leading to the unjust enrichment of another party. Unjust enrichment may arise in a variety of ways (see: Muschinski v Dodds [1985] HCA 78 ; (1985) 160 CLR 583; Daly v The Sydney Stock Exchange Limited [1986] HCA 25 ; (1986) 160 CLR 371 at 378-379; National Commercial Banking Corporation of Australia Limited v Batty [1986] HCA 21 ; (1986) 160 CLR 251 at 268; Baltic Shipping Company v Dillon [1993] HCA 4 ; (1993) 176 CLR 344 at 359; Pavey & Matthews Proprietary Limited v Paul [1987] HCA 5 ; (1987) 162 CLR 221 at 227) including total failure of consideration (see: Rowland v Divall [1923] 2 KB 500), or as a result of unconscionable conduct (see: Roxborough and Others v Rothmans of Pall Mall Australia Limited [2001] HCA 68 ; (2001) 208 CLR 516 per Gummow J at [70]- [71]).


case_text: Division 1 of Part V of the Act provides a general prohibition against misleading and deceptive conduct of corporations in trade and commerce. A breach of this section can result in an order of damages under s 82 of the Act. The characteristics of statements which constitute representations in breach of s 52 of the Act have been considered in numerous decisions, see: Equity Access Pty Ltd v Westpac Banking Corporation and Another (1990) ATPR 40-994 at 50,950; (1989) 16 IPR 431; Brown and Another v Jam Factory Pty Ltd (1981) 53 FLR 340 at 348; Henjo Investments Pty Limited and Others v Collins Marrickville Pty Limited (No 1) (1988) 39 FCR 546; Parkdale Custom Built Furniture Proprietary Limited v Puxu Proprietary Limited [1982] HCA 44 ; (1982) 149 CLR 191 at 198; Rhone- Poulenc Agrochimie SA and Another v UIM Chemical Services Pty Ltd and Another (1986) 12 FCR 477; Hornsby Building Information Centre Proprietary Limited and Another v Sydney Building Information Centre Limited [1978] HCA 11 ; (1978) 140 CLR 216. To constitute such breach, a statement must be made by a corporation in the course of trade or commerce. The concept of 'in trade or commerce' has been considered by the majority of the High Court in Concrete Constructions (NSW) Pty Limited v Nelson [1990] HCA 17 ; (1990) 169 CLR 594 at 604. Further the intent of the representor is irrelevant (see Hornsby Building Information Centre 140 CLR 228).


case_title: Concrete Constructions (NSW) Pty Limited v Nelson [1990] HCA 17 ; (1990) 169 CLR 594


case_title: Daly v The Sydney Stock Exchange Limited [1986] HCA 25 ; (1986) 160 CLR 371


case_title: Equity Access Pty Ltd v Westpac Banking Corporation and Another (1990) ATPR 40-994 at 50,950; (1989) 16 IPR 431


case_text: Initially the respondents defended Findlay Underwriters' claims and a cross-claim was filed by each of them. However, no evidence was filed in support of the cross-claim. On 2 April 2007 Mr Salfinger made an unsuccessful application to adjourn the proceedings on the ground of his illness. The relevant orders relating to the preparation of the matter for hearing and of the Court's decision concerning the application for adjournment are contained in an interlocutory judgment of the Court delivered on 17 April 2007: see Findlay & Co Stockbrokers (Underwriters) Pty Limited v Carminco Gold & Resources Limited [2007] FCA 499. 4 After such judgment was delivered, counsel representing the respondents sought and was granted leave to withdraw. Accordingly the proceedings have been heard undefended. 5 Mr Ivor Findlay is Managing Director of Findlay & Co Stockbrokers Pty Limited ('Findlay Stockbrokers') and Director of Findlay & Co Stockbrokers (Underwriters) Pty Limited ('Findlay Underwriters'). Findlay Stockbrokers conducts a stockbroking business, acting as agent for high net-worth individuals for the buying and selling of shares. Findlay Underwriters conducts a corporate advisory and underwriting business which includes advisory work in respect of capital raising and corporate dealings in matters such as Initial Public Offerings ('IPO'), placement of shares, underwriting, sub-underwriting and other preparatory work necessary for the flotation of a new company.


case_title: Henjo Investments Pty Limited and Others v Collins Marrickville Pty Limited (No 1) (1988) 39 FCR 546


case_title: Hornsby Building Information Centre Proprietary Limited and Another v Sydney Building Information Centre Limited [1978] HCA 11 ; (1978) 140 CLR 216


case_text: It is sufficient for the offending conduct to have been a cause of an applicant's loss or damage and there is no requirement that such conduct was the only cause of an applicant's loss or damage (see: I & L Securities Pty Limited v HTW Valuers (Brisbane) Pty Limited [2002] HCA 41 ; (2002) 210 CLR 109 at 119). 47 Findlay Underwriters relies upon three representations made by the respondents in support of their claim that Carminco and TPM breached the provisions of s 52 of the Act. Additionally Findlay Underwriters relies upon a breach of s 75B of the Act in respect of the conduct of Mr Salfinger. The Court will make its findings in respect of each of the representations relied upon hereunder. 48 Mr Salfinger made oral statements to Mr Findlay and to Mr Vajda concerning the ownership by Trans Pacific Mining Ltd (Carminco) of an option to purchase Summit Lake Mine. The first representation was made orally in a conversation between Mr Salfinger and Mr Vajda wherein Mr Salfinger said words to the effect 'Trans Pacific also has an option to purchase Summit Lake Mine'. Such representation was repeated in meetings with Mr Vajda and Mr Findlay in November 2003. At the latter meeting documents were produced, issued by Trans Pacific Mining Ltd which refer, inter alia, to the Summit Lake Mine in Canada. The following statement appears in relation to such site: 'TPM has negotiated an option to acquire a 100% interest in the mine for C$550,000.'


case_title: Muschinski v Dodds [1985] HCA 78 ; (1985) 160 CLR 583


case_title: National Commercial Banking Corporation of Australia Limited v Batty [1986] HCA 21 ; (1986) 160 CLR 251


case_title: Parkdale Custom Built Furniture Proprietary Limited v Puxu Proprietary Limited [1982] HCA 44 ; (1982) 149 CLR 191 at 198


case_title: Pavey & Matthews Proprietary Limited v Paul [1987] HCA 5 ; (1987) 162 CLR 221


case_title: Rowland v Divall [1923] 2 KB 500


case_title: Roxborough and Others v Rothmans of Pall Mall Australia Limited [2001] HCA 68 ; (2001) 208 CLR 516


case_text: To recover damages pursuant to s 82 of the Act an applicant must prove that loss or damage suffered was 'by' the conduct claimed to be in breach of the relevant parts of the Act. The meaning of the word 'by' in s 82 was considered by Mason J in Wardley Australia Limited and Another v The State of Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 at 525 where his Honour said: '...s 82(1) should be understood as taking up the common law practical or common-sense concept of causation recently discussed by this Court in March v Stramare (E & MH) Pty Ltd (1001) 171 CLR 506; 65 ALJR 335; 99 ALR 423; 12 MVR 353; [1991] Aust Torts Reports 81-095; 9 BCL 215, except in so far as that concept is modified or supplemented expressly or impliedly by the provisions of the Act'.


case_outcome: referred to

case_text: On 10 February 2006, I delivered judgment in this proceeding, refusing an application for an extension of time within which to appeal the decision of a Federal Magistrate: Tran v Minister for Immigration & Multicultural & Indigenous Affairs [2006] FCA 77 (" Tran No 1 "). In that judgment, I indicated that there was an outstanding issue to de determined. That issue was whether the applicant's solicitor should be ordered to repay to the applicant some portion of the costs that the applicant was ordered to pay to the respondents. 2 Order 62 r 9(1)(c) of the Federal Court Rules provides as follows: "Without limiting the Court's discretion to award costs in a proceeding, if costs are incurred improperly or without reasonable cause, or are wasted by undue delay or by any other misconduct or default, and it appears to the Court that a legal practitioner is responsible (whether personally or through a servant or agent), the Court may, after giving the legal practitioner a reasonable opportunity to be heard, do any of the following: ... (c) direct the legal practitioner to repay to the client, costs which the client has been ordered to pay to another party;". 3 Order 62 r 9 was introduced in its present form in 2003 by the Federal Court Amendment Rules (No 3) 2003 (Cth). The rule in its earlier form was unduly restrictive. It required a reference to, and report by, a taxing officer before the power to order a solicitor to repay to his or her client costs ordered to be paid by the client to another party could be invoked. The rule in its previous form appears to have been rarely used. It is possible that because of its restrictive nature, costs orders against solicitors have tended to be dealt with in this Court pursuant to s 43 of the Federal Court Act 1976 (Cth). That section provides, in substance, that the award of costs is in the discretion of the Court or Judge. Plainly s 43 confers upon the Court a wide discretion, though of course that discretion must be exercised judicially.


case_text: Section 43 does not expressly state that a power to award costs against solicitors is given to the Court. However, the authorities are clear that s 43 does encompass this power. See Levick v Commissioner of Taxation [2000] FCA 674 ; (2000) 102 FCR 155 (" Levick ") in which the relevant principles are discussed by the Full Court. 6 The principles under which an order for costs should be made against a legal practitioner for unreasonably instituting or maintaining a proceeding or defence, at least in relation to s 43, suggest that this power should be used sparingly. Indeed, in Levick , the Full Court suggested that in order to invoke the power, there must be something akin to an abuse of process, that is, using the proceeding for an ulterior purpose or without any, or any proper, consideration of the prospects of success. The Full Court referred to White Industries (Qld) Pty Ltd v Flower & Hart (1998) 156 ALR 169 at 236 per Goldberg J to the same effect. See also Re Bendeich (No 2) (1994) 53 FCR 422 at 426-7 per Drummond J. 10 A somewhat different approach was taken by the Queensland Court of Appeal in Steindl Nominees Pty Ltd v Laghaifar [2003] 2 Qd R 683 (" Steindl "), where Davies JA (with whom Williams JA and Philippides J agreed) rejected the proposition that it was not improper for a legal representative to present a case which that legal representative knew, or ought to know, was hopeless. Mansfield J regarded himself as bound to follow the approach in Levick , in preference to that adopted in Steindl . He therefore declined to make the order sought. 14 It is unnecessary for me to say anything further about s 43. It may be arguable that the principles stated in Levick require some further consideration in the light of the later reasoning of the Queensland Court of Appeal in Steindl . However, any such reconsideration will have to await the attention of a Full Court. 24 In due course, s 78 B notices issued. They were all but incoherent. At the hearing, the applicant's solicitor pursued what purported to be a constitutional argument, of sorts, for some minutes, and then acknowledged, in effect, that he was unable to argue the point. He was no better able to identify any constitutional issue in the costs hearing before me. It is interesting to note that in Levick , a bankruptcy case, a similar inability to articulate in any sensible manner a purported constitutional challenge to the validity of a series of Commonwealth Acts (including the Taxation Administration Act 1953 (Cth), the Income Tax Assessment Act 1936 (Cth), and the Corporations Law) was properly visited with an order for costs against the debtor's solicitor. 25 In the circumstances of this case, I consider that it would be unfair to require the applicant to pay the additional costs incurred by reason of the introduction of an entirely hopeless legal point, and one that would have been beyond the applicant's comprehension. It was her legal representative who pursued this point, even when he knew that he was in no position to say anything sensible in support of it. 26 I propose therefore to make an order pursuant to O 62 r 9(1)(c) to the effect that the applicant's solicitor repay the client the costs thrown away by reason of the pursuit of the constitutional challenge. I am told that the applicant is impecunious. It is likely that the respondents will pursue her for costs. The best course, in these circumstances, is to order that the method by which the applicant's solicitor repay her for these costs is to make a payment directly to the respondents, which sum will of course, be deducted from any amount owing by the applicant by way of costs. I will fix the amount to be paid by the applicant's solicitor in the sum of $1000, which seems to me to be a very modest figure in the circumstances. 27 The applicant's solicitor asked for time to pay. I will order the applicant's solicitor to pay to the respondents the sum of $1000, that amount to be paid on or before 9 May 2006. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Weinberg. Associate: Dated: 10 March 2006 Solicitor for the Applicant: Mr D Cheung There was no appearance for the respondent Date of Hearing: 10 March 2006 Date of Judgment: 10 March 2006 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2006/199.html


case_text: In De Sousa v Minister for Immigration, Local Government and Ethnic Affairs (1993) 41 FCR 544, French J discussed, at 546, the restrictions of the previous O 62 r 9. His Honour also stated that the rule did not operate to constrain the broad powers provided for under s 43.


case_text: The principles under which an order for costs should be made against a legal practitioner for unreasonably instituting or maintaining a proceeding or defence, at least in relation to s 43, suggest that this power should be used sparingly. Indeed, in Levick , the Full Court suggested that in order to invoke the power, there must be something akin to an abuse of process, that is, using the proceeding for an ulterior purpose or without any, or any proper, consideration of the prospects of success. The Full Court referred to White Industries (Qld) Pty Ltd v Flower & Hart (1998) 156 ALR 169 at 236 per Goldberg J to the same effect. See also Re Bendeich (No 2) (1994) 53 FCR 422 at 426-7 per Drummond J.


case_title: Re Bendeich (No 2) (1994) 53 FCR 422


case_text: In Kumar v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 18 ; (2004) 133 FCR 582, Mansfield J reviewed the authorities in the context of an application by the respondent Minister for an order that the unsuccessful applicant's solicitor be ordered to pay the costs of the application jointly with the applicant. His Honour accepted that the Court had jurisdiction to make an order for costs against a solicitor. However, he declined in the exercise of his discretion to do so. 8 It seems that the application before Mansfield J was brought under s 43, and his Honour regarded the test that had to be satisfied before such an order was made pursuant to that section as requiring a finding that the solicitor's conduct was tantamount to an abuse of process. He accepted that a hopeless case might support the inference that there was some ulterior purpose for the proceeding. However, he also noted the competing principle that a party is entitled to have a solicitor act for the party even in an unmeritorious case. He referred to Ridehalgh v Horsefield [1994] Ch 205 at 233, where the Court of Appeal said: "A legal representative is not to be held to have acted improperly, unreasonably or negligently simply because he acts for a party who pursues a claim or a defence which is plainly doomed to fail." 11 In Bagshaw v Scott [2005] FCA 104 , Bennett J adopted a similar approach to that of Mansfield J in Kumar . Her Honour said, at [44], that the power to order costs against solicitors had to be exercised with care and discretion, and only in clear cases. There had to be something which amounted to a serious dereliction of duty. Simply instituting or maintaining on instructions proceedings which had no real prospect of success was not such a dereliction of duty. 12 In Kumar , Mansfield J referred to O 62 r 9 in its present form. Having concluded that there was no warrant for ordering the solicitor in that case to pay costs, pursuant to s 43, he went on to say that this did not excuse the solicitor from the obligation to provide appropriate advice to the client before instituting proceedings. His Honour then said, at [15], that if the client did not take that advice, the solicitor "has the duty to the Court not to incur costs improperly or without reasonable cause". He referred to this power as the so called "wasted costs jurisdiction". 13 It appears that his Honour drew a distinction between instituting proceedings that were essentially hopeless, where something akin to an abuse of process had to be shown before costs could be ordered, and conducting proceedings in a manner that involved costs being improperly incurred, or at least incurred without reasonable cause. On any view, there will be some overlap between the principles to be applied when considering whether to award costs against a legal practitioner under s 43, or under O 62 r 9(1).


case_title: Ridehalgh v Horsefield [1994] Ch 205

case_text: It seems that the application before Mansfield J was brought under s 43, and his Honour regarded the test that had to be satisfied before such an order was made pursuant to that section as requiring a finding that the solicitor's conduct was tantamount to an abuse of process. He accepted that a hopeless case might support the inference that there was some ulterior purpose for the proceeding. However, he also noted the competing principle that a party is entitled to have a solicitor act for the party even in an unmeritorious case. He referred to Ridehalgh v Horsefield [1994] Ch 205 at 233, where the Court of Appeal said: "A legal representative is not to be held to have acted improperly, unreasonably or negligently simply because he acts for a party who pursues a claim or a defence which is plainly doomed to fail."


case_text: A somewhat different approach was taken by the Queensland Court of Appeal in Steindl Nominees Pty Ltd v Laghaifar [2003] 2 Qd R 683 (" Steindl "), where Davies JA (with whom Williams JA and Philippides J agreed) rejected the proposition that it was not improper for a legal representative to present a case which that legal representative knew, or ought to know, was hopeless. Mansfield J regarded himself as bound to follow the approach in Levick , in preference to that adopted in Steindl . He therefore declined to make the order sought. 14 It is unnecessary for me to say anything further about s 43. It may be arguable that the principles stated in Levick require some further consideration in the light of the later reasoning of the Queensland Court of Appeal in Steindl . However, any such reconsideration will have to await the attention of a Full Court.


case_title: Bagshaw v Scott [2005] FCA 104

case_text: In Bagshaw v Scott [2005] FCA 104 , Bennett J adopted a similar approach to that of Mansfield J in Kumar . Her Honour said, at [44], that the power to order costs against solicitors had to be exercised with care and discretion, and only in clear cases. There had to be something which amounted to a serious dereliction of duty. Simply instituting or maintaining on instructions proceedings which had no real prospect of success was not such a dereliction of duty.


case_text: In the Hebridean Coast [1961] AC 545 at 576-578, Lord Reid applied there principles to a case where a government corporation claimed damages for the detention of a nonprofitearning vessel while she was being repaired. His Lordship distinguished this from the case of a profit-earning ship where the plaintiff had to prove '... the probability that she would have earned so much money if her owner could have used her' ([1961] AC at 577). With a nonprofit-earning ship, if no harm were proved apart from the mere fact that the owner is deprived of her services during the period of repairs, the Court awards damages based on interest and depreciation on the value of the ship ([1961] AC at 578 per Lord Reid, 580 per Lords Morton of Henryton and Tucker, 583 per Lord Morris of Borth-y-Gest; The Greta Holme [1897] AC 596). In Admiralty Commissioners v SS Susquehanna [1926] AC 655 at 664, Lord Sumner said that in such an assessment 'the practice of treating the injured ship, by a sort of personification, as a separate claimant is too inveterate to be disturbed now.'


case_text: And in Anthanasopoulos v Moseley [2001] NSWCA 266 ; (2001) 52 NSWLR 262 the Court of Appeal of the Supreme Court of New South Wales allowed car owners (or their insurer) who were deprived of the use of their vehicles to recover the cost of hire of a substitute vehicle while theirs underwent repair even though they were not out of pocket for that hire. That Court applied The Greta Holme [1897] AC 596 on the basis that injury to non income producing property which deprives a party of the use of the property is compensable and held that the claim was for general, not special damages (see 52 NSWLR at 276 [76] per Ipp A-JA; see too at 273 [54], 274 [58] per Beazley JA).


case_text: In Banco de Portugal v Waterlow & Sons Ltd [1932] UKHL 1 ; [1932] AC 452 at 506 Lord Macmillan held that where the sufferer from a breach of contract finds itself in consequence of that breach placed in a position of embarrassment, the measures it may be driven to adopt in order to extricate itself ought not to be weighed in nice scales at the instance of the party whose breach of contract had occasioned the difficulty. His Lordship continued: 'It is often easy after an emergency has passed to criticize the steps which have been taken to meet it, but such criticism does not come well from those who have themselves created the emergency. The law is satisfied if the party placed in a difficult situation by reason of the breach of a duty owed to him has acted reasonably in the adoption of remedial measures, and he will not be held disentitled to recover the cost of such measures merely because the party in breach can suggest that other measures less burdensome to him might have been taken.'


case_outcome: applied

case_text: The principle applicable to the right of a shipowner to recover from a wrongdoer the cost of hiring a substitute vessel while its own vessel is being repaired as a result of the tort, was stated by Viscount Sumner in SS Strathfillan v SS Ikala [1929] AC 196 at 205 (Lord Buckmaster agreeing at 205 and Lord Warrington of Clyffe gave a concurring speech at 211-212: see too per Scrutton LJ in The York [1929] P 178 at 184; The Yorkshireman (1827) 2 Hagg Adm 30n; 166 ER 155; cp: GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50 ; (2003) 128 FCR 1 at 240-241 [1062] -1067] per Finn J; Carslogie Steamship Co Ltd v Royal Norwegian Government [1951] UKHL 4 ; [1952] AC 292 at 300-302, 306, 313) thus: 'If... the [plaintiff's] case is to be that the delay upset the general current of their trade, which had to be maintained in spite of it, I think that the extent and cost of this upset must be proved and must be causally connected with the collision in accordance with the ordinary rules of law as to damage. A ship's day is not like a unit of currency, always good for so many shillings. It has to be proved that, in doing the shipowner the wrong of laying his ship idle at the time in question, work, which she would otherwise have done during the time, went undone to his measurable loss or was only done by resorting to other expedients at a measurable outlay.' 89 I am satisfied that it was necessary for Consort to charter the Noumea Express as a substitute vessel in July and August 2000 while the Gazelle Coast underwent the extensive repairs and restoration work then undertaken. I am of opinion that the claim for the hire of the Noumea Express is reasonable. Mr McInnes noted that some repairs carried out at this time were not referable to any purchase defect. I have considered those items and they appear to me, based on their description, to be of a relatively minor or routine nature and to be of a kind that could be undertaken concurrently with the major work. A shipowner can have other work performed while its vessel is undergoing repairs caused by a wrongdoer without being obliged to account, as it were, for extra costs incurred: see Carslogie Steamship Co Ltd v Royal Norwegian Government [1951] UKHL 4 ; [1952] AC 292 at 302-304 where Viscount Jowitt accurately summarizes the authorities.


case_text: In assessing damages for breach of contract the Court seeks to place the party who sustains a loss by reason of the breach in a position, so far as money can do it, which is the same as if the contract had been performed: Robinson v Harman (1848) 1 Ex 850 at 855 [154 ER 363 at 365]; Burns v M.A.N. Automotive (Aust) Pty Limited [1986] HCA 81 ; (1986) 161 CLR 653 at 658, 667, 672-673. Wilson, Deane and Dawson JJ explained that this general principle is limited by a rule laid down by the Court of Exchequor in Hadley v Baxendale (1854) 9 Ex 341 at 354 [156 ER 145 at 151] (161 CLR at 667). That rule held that the damages recoverable from a breach of contract were such as might fairly and reasonably be considered either arising naturally, that is, according to the usual course of things, from such a breach of contract itself, as may be reasonably supposed to have been in the contemplation of both parties at the time they made the contract, as the probable result of the breach of it. Their Honours went on to say that these principles had been discussed by Gibbs J in Wenham v Ella [1972] HCA 43 ; (1972) 127 CLR 454 at 471-472 where he approved the following exposition of Lord Reid ( Czarnikow Ltd v Koufos [1967] UKHL 4 ; [1969] 1 AC 350 at 385): 'The crucial question is whether, on the information available to the defendant when the contract was made, he should, or the reasonable man in his position would, have realized that such loss was sufficiently likely to result from the breach of contract to make it proper to hold that the loss flowed naturally from the breach or that loss of that kind should have been within his contemplation.'


case_text: In The London Corporation [1935] P 70 at 77, Greer LJ, with whom Slesser LJ and Eve J agreed, said: 'Prima facie, the damage occasioned to a vessel is the cost of repairs - the cost of putting the vessel in the same condition as she was in before the collision, and to restore her in the hands of the owners to the same value as she would have had if the damage had never been done; and prima facie, the value of a damaged vessel is less by the cost of repairs than the value it would have if undamaged, though it is true that evidence may establish that the value of the vessel undamaged is exactly the same as her value after she had been damaged.' (see too Davidson v JS Gilbert Fabrications Pty Ltd [1986] 1 Qd R 1 at 3 per McPherson J, Andrews ACJ agreeing (at 1), 12 per Derrington J; Mackinnon McErlane Booker Pty Ltd v P&O Australia Ltd [1988] VR 534 at 544 per Murphy J, Gray and JH Phillips JJ agreeing; Gardiner v Metcalf [1994] 2 NZLR 8 at 14 per Hardie Boys J; see too McGregor on Damages (17 th edn) [32-003], [32-007].) 73 In Davidson v JS Gilbert Fabrications Pty Ltd [1986] 1 Qd R 1 at 9, McPherson J (Andrews ACJ agreeing) held that the time, trouble, expense and risks of repair and sale were ordinarily to be borne by a defendant. That principle is also of longstanding in cases in Admiralty. Dr Lushington said in The Gazelle (1844) 2 W. Rob (Adm) 279 at 281; 166 ER 759 at 760 that in cases of collision the suffering party is entitled to indemnification which is co-extensive with the damage, that is, to restitutio in integrum . He continued, in a passage part of which is cited in McGregor on Damages (17 th edn) at [32-006] as authoritative on the common law of assessment of the cost of repair (and see too The Munster (1896) 12 TLR 264 at 265-266 per Jeune P; Port Kembla Coal Terminal Ltd v Braverus Maritime Inc [2004] FCA 1211 ; (2004) 140 FCR 445 at 542 [487] and see too at 542-543 [484]-[488] per Hely J): 'If the settlement of the indemnification be attended with any difficulty (and in those cases difficulties must and will frequently occur), the party in fault must bear the inconvenience. He has no right to fix this inconvenience upon the injured party; and if that party derives incidentally a greater benefit than mere indemnification, it arises only from the impossibility of otherwise effecting such indemnification without exposing him to some loss or burden, which the law will not place upon him.'


case_title: Gardiner v Metcalf [1994] 2 NZLR 8

case_text: In The London Corporation [1935] P 70 at 77, Greer LJ, with whom Slesser LJ and Eve J agreed, said: 'Prima facie, the damage occasioned to a vessel is the cost of repairs - the cost of putting the vessel in the same condition as she was in before the collision, and to restore her in the hands of the owners to the same value as she would have had if the damage had never been done; and prima facie, the value of a damaged vessel is less by the cost of repairs than the value it would have if undamaged, though it is true that evidence may establish that the value of the vessel undamaged is exactly the same as her value after she had been damaged.' (see too Davidson v JS Gilbert Fabrications Pty Ltd [1986] 1 Qd R 1 at 3 per McPherson J, Andrews ACJ agreeing (at 1), 12 per Derrington J; Mackinnon McErlane Booker Pty Ltd v P&O Australia Ltd [1988] VR 534 at 544 per Murphy J, Gray and JH Phillips JJ agreeing; Gardiner v Metcalf [1994] 2 NZLR 8 at 14 per Hardie Boys J; see too McGregor on Damages (17 th edn) [32-003], [32-007].) 72 Coole P remarked that whatever verbal formulations courts employed '...[i]n truth damages are in the end always a question of fact dependent on the particular circumstances' ( Gardiner v Metcalf [1994] 2 NZLR at 12).


case_text: The principle applicable to the right of a shipowner to recover from a wrongdoer the cost of hiring a substitute vessel while its own vessel is being repaired as a result of the tort, was stated by Viscount Sumner in SS Strathfillan v SS Ikala [1929] AC 196 at 205 (Lord Buckmaster agreeing at 205 and Lord Warrington of Clyffe gave a concurring speech at 211-212: see too per Scrutton LJ in The York [1929] P 178 at 184; The Yorkshireman (1827) 2 Hagg Adm 30n; 166 ER 155; cp: GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50 ; (2003) 128 FCR 1 at 240-241 [1062] -1067] per Finn J; Carslogie Steamship Co Ltd v Royal Norwegian Government [1951] UKHL 4 ; [1952] AC 292 at 300-302, 306, 313) thus: 'If... the [plaintiff's] case is to be that the delay upset the general current of their trade, which had to be maintained in spite of it, I think that the extent and cost of this upset must be proved and must be causally connected with the collision in accordance with the ordinary rules of law as to damage. A ship's day is not like a unit of currency, always good for so many shillings. It has to be proved that, in doing the shipowner the wrong of laying his ship idle at the time in question, work, which she would otherwise have done during the time, went undone to his measurable loss or was only done by resorting to other expedients at a measurable outlay.'


case_outcome: discussed

case_text: Because Consort did not become the legal or beneficial owner of the ship at the time at which the purchase money of USD 3.5m was paid to the vendor, the usual measure of damages in tort, being a comparison between the price paid and the value received, cannot be applied: Gould v Vaggelas [1985] HCA 75 ; (1984) 157 CLR 215 at 223 per Gibbs CJ; see too at 232 per Murphy J, 245-246 per Wilson J, 253-255 per Brennan J. 100 I am of opinion that, for the same reasons, damages for any claim in contract in the circumstances of a case like the present cannot be assessed on that comparative basis. This is because J-Mac's contract obliged it to provide a prepurchase survey report which was prepared with reasonable care. It could be expected, as I have held, that Consort would either itself, or through a subsidiary, enter into a contract to purchase the ship. The damage which was in the reasonable contemplation of the parties at the time the prepuchase survey contract was entered into must have been the loss that would flow to whomever was the purchaser. If that were not Consort, then Consort could only have been contemplated to be able to recover a different loss that it suffered itself. 101 In Gould v Vaggelas [1985] HCA 75 ; (1984) 157 CLR 215, Mr and Mrs Gould were the guarantors of their company, Gould Holdings Pty Limited. The Goulds had entered into a contract to buy property induced by fraudulent misrepresentations made by the vendor. The contract provided for the purchaser to be a company to be incorporated, which, in the event, became Gould Holdings. By the time of the trial, Gould Holdings was in liquidation. The liquidator gave evidence that he had no funds and there was no substantive prospect of the company bringing an action to recover damages for the deceit caused by the vendor. The High Court made it clear that it was not open to the Goulds, as shareholders, to sue for the loss which their company had suffered by purchasing the property at a price much greater than its true value. However, the Court held that the Goulds could recover damages for the loss which they personally had suffered and which was separate and distinct from the loss suffered by the company (157 CLR at 220, 228 per Gibbs CJ, 231-232 per Murphy J, 245-246 per Wilson J, 253-255 per Brennan J). 102 Even though the basis for recovery under s 82 of the Act is not governed by common law rules of causation or remoteness or by the measures of damages in contract or tort, I am of opinion that in the present case it is still necessary to identify whether Consort has suffered some loss distinct and separate from that of its wholly owned subsidiary, Rho Beta 7, by entering into and completing the contract of the purchase of the vessel. 103 Consort itself paid for all of the repairs both before January 2001, and after that time when it had assumed the legal and beneficial ownership of the ship. Accordingly, Consort claimed that it suffered the damage in respect of the cost of repairs and restoration as well as the charter hire of the substitute vessels. 104 Having regard to the evidence of the nature and extent of the corrosion and other damaged condition of the ship at the time of purchase, it is clear that if the vessel were to be operated satisfactorily and to be maintained in class, it would have been necessary for extensive repairs and restoration work to be undertaken immediately or in the foreseeable future following completion of the purchase. And, likewise, it would have been necessary for the vessel to be taken out of service while the majority of that work was undertaken so that a substitute vessel or vessels would need to be hired to take the Gazelle Coast's place in Consort's business operations. 113 While it may have been true that just as in Gould v Vaggelas [1985] HCA 75 ; (1984) 157 CLR 215, the subsidiary (Rho Beta 7) may have had a right of action against the wrongdoer (J-Mac) the fact is that without the financial support of the parent, Consort, the right of action could not be realized. In the meantime, Consort had a business to run and needed the ship back in service to do so. Consort's ability to recover its loan, being the purchase price of the vessel, from Rho Beta 7 was substantively diminished by at least the loss in the value of the ship that had to be recognized in Rho Beta 7's books. That loss, may have been offset by the contingent asset of Rho Beta 7's cause of action against J-Mac but, as I have said, the exercise of that right depended upon Consort causing it to occur. Perhaps, that would have been a legally correct and advisable course, but, for the reasons given by Lord Macmillan, the course embarked on by Consort was also reasonably open to it. 114 The purpose for which Consort had engaged J-Mac's services was to receive advice as to the condition of the vessel so that it could be employed in Consort's business. Whether it was employed directly or through one of Consort's subsidiaries mattered not. Once the vessel required, in order to maintain class and efficacy as a trading vessel, the repairs and restoration work, they had to be effected if it were to be available in Consort's business. And, Consort had to spend directly or indirectly the money for those repairs or else it would have lost the whole of the investment made. 115 The position here is similar to that which Gibbs CJ pointed out in Gould v Vaggelas [1985] HCA 75 ; (1984) 157 CLR 215 at 225: 'However it would be quite unreal to determine the extent of the Goulds' loss on the basis that Gould Holdings would recover damages for deceit immediately after the date of settlement of the contract of sale. There was not the least likelihood that such an event would occur. Moreover, there was not the slightest intention that the amount owing by Gould Holdings should be repaid to the Goulds until the company had been trading profitably for some time.' 116 Gibbs CJ went on to say that the fact that the company might have had rights against the wrongdoer, did not mean that the Goulds were precluded from enforcing their own personal rights (157 CLR at 229). His Honour had held that the direct consequence of buying the resort was that Gould Holdings had to procure, in that case, the necessary funds to enable the business to carry on and for that purpose to obtain the necessary guarantees from the Goulds. It was foreseeable that that would occur and therefore it was not unreasonable for the Goulds to have given the guarantees. 117 The situation here is stronger in Consort's favour since it itself was the principal debtor to ANZ, and Rho Beta 7 was, in effect, a surety for the repayment by Consort of the loan. 118 Mr McInnes said that in January 2001 ownership of the vessel was transferred back to Consort and the loan and security documentation was amended. He did not elaborate on precisely how that amendment occurred but I infer that the amendments were to reflect the fact that Rho Beta 7 no longer had any part in the arrangements between Consort and ANZ for the provision of funds with which to first, acquire and, secondly, repair and restore the vessel. He said: 'Effectively no money changed hands between Consort and Rho Beta 7. Rho Beta 7 now has no assets.' 120 There is, of course, in a situation such as the present, a danger that by awarding Consort the damages claimed, J-Mac could be put in the position of having to pay Rho Beta 7 the same damages at a later time if other proceedings had been taken by Rho Beta 7. But, Mr McInnes swore that Rho Beta 7 had no assets. I must therefore infer that the asset comprised in its right of action against J-Mac was no longer available to Rho Beta 7 at 21 July 2005 when he swore his affidavit. Again, the evidence is not in the most satisfactory state, but I am of opinion that even if Rho Beta 7 retained at that time the causes of action it may have had against J-Mac for its prepurchase survey reports, in Rho Beta 7's hands that right of action was as valueless as Gould Holdings' right of action was in Gould v Vaggelas [1985] HCA 75 ; (1984) 157 CLR 215 at 228, 232, 258. The likelihood of Consort recovering anything from Rho Beta 7 in respect of the losses Consort has sustained is, on the evidence before me, negligible. 121 It follows, that Consort has established that it has suffered loss and damage in the sum claimed because any cause of action it may have against Rho Beta 7 is valueless and it, Consort, suffered the loss and damage of the cost of repairs, restoration and the hire of substitute vessels itself. Accordingly, judgment should be entered for the full amount claimed together with interest on the basis which I have indicated. 122 The amount for which judgment will be entered is based on the following calculations as to interest and currency conversion in a calculation prepared by the solicitors for Consort: (a) expenditure in the schedule in Australian dollars $ 2,547,384.34 (b) expenditure in the schedule of USD 297,143 converted at the respective dates of payment to the Australian dollar equivalent $ 495,743.14 (c) interest item by item from repair payment date to today $ 1,287,112.73 $ 4,330,240.21 I certify that the preceding one hundred and twenty-two (122) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. Associate: Dated: 3 July 2006 Counsel for the Applicant: Mr GA Thompson SC with T Sullivan Solicitor for the Applicant: Thynne & Macartney Respondent: No Appearance Date of Hearing: 13 June 2006 and 16 June 2006 Date of Judgment: 3 July 2006 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2006/833.html


case_title: Hadley v Baxendale (1854) 9 Ex 341


case_text: The settled principle governing the assessment of compensatory damages, whether in actions of tort or contract, is that the injured party should receive compensation in a sum which, so far as money can do, will put that party in the same position as it would have been in if the tort had not been committed or the contract had been performed: Haines v Bendall [1991] HCA 15 ; (1991) 172 CLR 60 at 63 per Mason CJ, Dawson, Toohey and Gaudron JJ. As their Honours noted, compensation is the cardinal principle and the 'universal' rule is that a plaintiff cannot recover more than it has lost (172 CLR at 63). 65 I find that when the prepurchase survey contract was made it was in the contemplation of the parties, and of a reasonable person in the position of J-Mac, that Consort would be likely to suffer loss if the survey results were reported negligently. Consort's loss would be that it had purchased the vessel at a price that was far greater than its true value or alternatively would have to pay for the cost of repair and restoration so that it would be brought to a condition conformable with that in the advice given by J-Mac. And, I find that a reasonable person in the position of J-Mac would have realized that Consort would be likely to be exposed to such losses either directly, were it to acquire ownership of the vessel itself, or indirectly by causing the vessel to be acquired by a wholly owned subsidiary using Consort's financial support or resources to make the purchase.


case_title: Hebridean Coast [1961] AC 545


case_text: In tort, the measure of damages is that sum which would be sufficient to place the innocent party in the position it would have had had the tort not been committed. Frequently, in a case like the present where there is no contractual expectation loss ( Gates v City Mutual Life Assurance Society Ltd [1986] HCA 3 ; (1986) 160 CLR 1 at 12) courts take a similar approach to determining the loss or damage as I have just taken on the contractual measure which is appropriate in this case, namely the difference between the price and the true value: see Potts v Miller [1940] HCA 43 ; (1940) 64 CLR 282. However, that measure of damages is treated by the courts as a flexible rule of practice, which may not be appropriate to the quantification of damage in each case ( HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54 ; (2004) 217 CLR 640 at 656-658 [35] - [37] ). 96 The ultimate award, including interest, could, of course, be discounted back to reflect it as at 29 July 1999 when loss was incurred on completion of the purchase. I am of opinion that such a method would accurately reflect the damage, excluding interest, suffered by the purchaser. But, since I have evidence of the actual incurring of expenses and the appropriate quantum of interest to be awarded, it is sufficient to make the award as I propose ( HTW Valuers (Central Qld) Pty Ltd v Astoland [2004] HCA 54 ; (2004) 217 CLR 640 at 658-659 [38] - [40] , [47]). Doing the best I can, I find that such an award provides a just measure of compensation. 105 Upon purchase, Rho Beta 7 acquired an immediate right to sue J-Mac for the whole of those damages because the vessel at that time needed the repairs and restoration work to be done. There was no hidden contingency of the kind found in Murphy v Overton Investments Pty Ltd [2004] HCA 3 ; (2004) 216 CLR 388 at 401-402 [26] where someone else's discretion might in the future be exercised to change the purchaser's position. The damage to the vessel was not hidden and the need to repair and restore it was ineluctable ( HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54 ; (2004) 217 CLR 640 at 655 [30] ). Rho Beta 7 had been induced by J-Mac's negligence and misleading conduct, to pay the purchase price to the French vendor. And, when in early 2001 Consort chose to become the legal and beneficial owner of the Gazelle Coast , it knew the vessel's true value and accurately its then state of repair.


case_text: I find that had J-Mac properly reported in a prepurchase survey to Consort that the vessel had the deficiencies or a number of them which have been admitted as existing in the defence, Consort would not have purchased the vessel. In arriving at these findings I have also had regard to the evidence in the affidavits of Messrs Pasma, Woodall and Barrie as well as to so much of the affidavits of Messrs Perrott, Bleasdale, Dowell and McInnes and Capt Adhikari as was read. Accordingly, Consort's claim for damages is to be approached upon the basis that the cases have described as a 'no transaction' case ( Kenny & Good Pty Limited v MGICA (1992) Ltd [1999] HCA 25 ; (1999) 199 CLR 413). 59 Thus, in Kenny & Good Pty Limited v MGICA (1992) Ltd [1999] HCA 25 ; (1999) 199 CLR 413 at 457-458 [119] - [120] Kirby and Callinan JJ held that if a correct valuation had been given, there would have been no loss suffered by the mortgage insurer because it would not have provided mortgage insurance at all. They said that this approach gave content to, or defined, the contractual obligation to exercise reasonable care and the tortuous duty of care. It did this by having regard to the kind of loss or damage in respect of which the contract breaker or tortfeasor was required to exercise reasonable care. 60 In that case the valuation included a representation that the property was a suitable investment for trust funds, on the basis of the valuation, for a term of 3-5 years. Kirby and Callinan JJ said that the valuer had an obligation and a duty in giving the valuation to exercise reasonable care to enable the mortgage insurer to decide whether to enter into an insurance transaction at all. The obligation or duty was breached if an accurate representation would have suggested that the mortgage insurer should not have entered the transaction (the other justices took a similar approach: 199 CLR at 425-426 [19]-[21] per Gaudron J, 447 [83] and 449 [92] per Gummow J; but see per McHugh J at 431 [35]). The valuer was held liable for the whole of the loss which the mortgage insurer suffered, some of which resulted from a later fall in the property market. 61 Here, the advice sought from the professional surveyor related to the condition of the ship and its appropriateness for purchase by Consort. It was clearly within the contemplation of Consort and J-Mac at the time their contract was entered into that Consort would expose itself to financial loss if it acted on J-Mac's advice and J-Mac's prepurchase survey were inaccuracte. Such loss could occur if Consort purchased the ship itself or caused, as is usual in such commercial transactions, a subsidiary to be incorporated for the purposes of acquiring and holding the asset and the ship turned out not to be sound in respects the subject of the opinion provided by J-Mac. 62 The loss could be suffered by reason that, first, the price paid for the ship might be greater than its true worth or secondly, the cost to repair the ship, so as to bring it to the condition where it might operate and possess the characteristics the subject of the negligent opinion, was substantial. Who suffered that loss is a fundamental issue in this matter.


case_text: Immediately upon entry into the contract of purchase, Consort was exposed to a risk of loss. But risk of loss is not a category of loss ( Murphy v Overton Investments Pty Ltd [2004] HCA 3 ; (2004) 216 CLR 388 at 405-406 [37] ). By entering the purchase contract which permitted Consort to nominate the buyer, Consort did not then suffer damage. Damage would be suffered by whomever was the buyer i.e. Consort or its nominee, in the event Rho Beta 7 on completion, when the purchase price was paid. 105 Upon purchase, Rho Beta 7 acquired an immediate right to sue J-Mac for the whole of those damages because the vessel at that time needed the repairs and restoration work to be done. There was no hidden contingency of the kind found in Murphy v Overton Investments Pty Ltd [2004] HCA 3 ; (2004) 216 CLR 388 at 401-402 [26] where someone else's discretion might in the future be exercised to change the purchaser's position. The damage to the vessel was not hidden and the need to repair and restore it was ineluctable ( HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54 ; (2004) 217 CLR 640 at 655 [30] ). Rho Beta 7 had been induced by J-Mac's negligence and misleading conduct, to pay the purchase price to the French vendor. And, when in early 2001 Consort chose to become the legal and beneficial owner of the Gazelle Coast , it knew the vessel's true value and accurately its then state of repair.


case_text: In Davidson v JS Gilbert Fabrications Pty Ltd [1986] 1 Qd R 1 at 9, McPherson J (Andrews ACJ agreeing) held that the time, trouble, expense and risks of repair and sale were ordinarily to be borne by a defendant. That principle is also of longstanding in cases in Admiralty. Dr Lushington said in The Gazelle (1844) 2 W. Rob (Adm) 279 at 281; 166 ER 759 at 760 that in cases of collision the suffering party is entitled to indemnification which is co-extensive with the damage, that is, to restitutio in integrum . He continued, in a passage part of which is cited in McGregor on Damages (17 th edn) at [32-006] as authoritative on the common law of assessment of the cost of repair (and see too The Munster (1896) 12 TLR 264 at 265-266 per Jeune P; Port Kembla Coal Terminal Ltd v Braverus Maritime Inc [2004] FCA 1211 ; (2004) 140 FCR 445 at 542 [487] and see too at 542-543 [484]-[488] per Hely J): 'If the settlement of the indemnification be attended with any difficulty (and in those cases difficulties must and will frequently occur), the party in fault must bear the inconvenience. He has no right to fix this inconvenience upon the injured party; and if that party derives incidentally a greater benefit than mere indemnification, it arises only from the impossibility of otherwise effecting such indemnification without exposing him to some loss or burden, which the law will not place upon him.' 74 The principle identified by these authorities establishes that a tortfeasor must bear the cost of replacement or repair of the plaintiff's property where that has been damaged or destroyed by the tortfeasor's negligence. And the quantum of that cost is not diminished by any betterment of the plaintiff's property as a result of the repairs which the plaintiff achieves provided that the plaintiff does not act extravagantly: Port Kembla Coal Terminal Ltd v Braverus Maritime Inc [2004] FCA 1211 ; (2004) 140 FCR 445 at 542 [485] - [486] per Hely J. 75 The third basis upon which damages fall to be assessed in the present case is that provided pursuant to s 82 of the Act. That measure is one which is flexible so as to be appropriately adapted to the circumstances of compensating a person who suffers loss or damage by conduct of another person that was done in contravention of s 52 of the Act. 76 Here, Consort argues that it suffered loss by reason of J-Mac's contravention of s 52 because it was exposed to being in default under its financing arrangements with ANZ. It had caused its subsidiary to acquire the ship at a price far greater than its true worth. Rho Beta 7 had no assets other than the ship itself with which to repay the loan provided by Consort. Accordingly, Rho Beta 7 had a loan of USD 3.5m and its only asset was worth only half of that amount. Consort was obliged to maintain the asset value of its subsidiary so as to remain within its own covenants to ANZ. Thus, Consort argued that since it wished to run the ship in connection with its business, and not be in default under its loan facility it was necessary for Consort to pay for the repairs and restoration work and hire of substitute vessels. The ship had to be in a condition where it could keep its class certificates and registrations. And, it needed to be repaired and restored so as to be able to operate with appropriate efficiency in the conduct of Consort's business for which it had been purchased. Thus, Consort was exposed to the necessity of either itself paying those costs or alternatively of financing them. 77 I am satisfied that the repairs performed to the hydraulics of the vessel's cranes by Perrott Engineering Pty Limited in November 1999 were necessary and the sum claimed for them is reasonable. 78 In the period between July 2000 and September 2000 major repairs and restoration work were undertaken when the ship was at the Tropical Reef Shipyard. Further repairs were carried out in 2004. I accept Mr McInnes' evidence as to the circumstances in which the various repairs of the vessel were undertaken between 1999 and 2004 in respect of which damages are claimed in the schedule. I am of opinion that his evidence establishes that Consort acted reasonably in the way in which it went about arranging for and paying for the repairs and the hire of substitute vessels. Consort paid hire for a replacement vessels during that period.


case_text: In tort, the measure of damages is that sum which would be sufficient to place the innocent party in the position it would have had had the tort not been committed. Frequently, in a case like the present where there is no contractual expectation loss ( Gates v City Mutual Life Assurance Society Ltd [1986] HCA 3 ; (1986) 160 CLR 1 at 12) courts take a similar approach to determining the loss or damage as I have just taken on the contractual measure which is appropriate in this case, namely the difference between the price and the true value: see Potts v Miller [1940] HCA 43 ; (1940) 64 CLR 282. However, that measure of damages is treated by the courts as a flexible rule of practice, which may not be appropriate to the quantification of damage in each case ( HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54 ; (2004) 217 CLR 640 at 656-658 [35] - [37] ). 92 Consort claims damages on two alternate bases. First, it says that the total amount claimed is the equivalent of the damage suffered at the time of purchase, being the difference between the price and the true value of the Gazelle Coast ( Potts v Miller [1940] HCA 43 ; (1940) 64 CLR 282). Thus, it seeks interest on that sum from 29 July 1999. Secondly, Consort says that the amounts are claimed as damages being the expense to which it has been put in restoring the Gazelle Coast to the condition she ought to have been in had she been as J-Mac's survey report had represented. 93 The problem with the first basis is that it uses the actual costs of repair and restoration work, together with charter hire incurred at various times over the five years succeeding the purchase. No evidence has been given that repair costs remained constant in that period. And the evidence shows that charter rates were different: in mid 2000 they were USD 4600 per day while in late 2003, when the CEC Light was fixed, they were USD 5000. There is no evidence of the rates at July 1999. Nor has Consort given evidence of the net present value at July 1999 of the damages claimed. 94 If Consort were to receive an award calculated on the first basis, it would be likely to achieve more than the true measure of its loss if interest were then awarded from July 1999. Charter rates were different and the market for those rates varies over time. Mr Dowell identified an average fixing rate in the June quarter of 2000 at USD 4130, albeit that he deemed USD 4600 as a realistic rate for a replacement ship.


case_title: SS Strathfillan v SS Ikala [1929] AC 196


case_text: In Davidson v JS Gilbert Fabrications Pty Ltd [1986] 1 Qd R 1 at 9, McPherson J (Andrews ACJ agreeing) held that the time, trouble, expense and risks of repair and sale were ordinarily to be borne by a defendant. That principle is also of longstanding in cases in Admiralty. Dr Lushington said in The Gazelle (1844) 2 W. Rob (Adm) 279 at 281; 166 ER 759 at 760 that in cases of collision the suffering party is entitled to indemnification which is co-extensive with the damage, that is, to restitutio in integrum . He continued, in a passage part of which is cited in McGregor on Damages (17 th edn) at [32-006] as authoritative on the common law of assessment of the cost of repair (and see too The Munster (1896) 12 TLR 264 at 265-266 per Jeune P; Port Kembla Coal Terminal Ltd v Braverus Maritime Inc [2004] FCA 1211 ; (2004) 140 FCR 445 at 542 [487] and see too at 542-543 [484]-[488] per Hely J): 'If the settlement of the indemnification be attended with any difficulty (and in those cases difficulties must and will frequently occur), the party in fault must bear the inconvenience. He has no right to fix this inconvenience upon the injured party; and if that party derives incidentally a greater benefit than mere indemnification, it arises only from the impossibility of otherwise effecting such indemnification without exposing him to some loss or burden, which the law will not place upon him.'


case_title: The Greta Holme [1897] AC 596

case_text: In the Hebridean Coast [1961] AC 545 at 576-578, Lord Reid applied there principles to a case where a government corporation claimed damages for the detention of a nonprofitearning vessel while she was being repaired. His Lordship distinguished this from the case of a profit-earning ship where the plaintiff had to prove '... the probability that she would have earned so much money if her owner could have used her' ([1961] AC at 577). With a nonprofit-earning ship, if no harm were proved apart from the mere fact that the owner is deprived of her services during the period of repairs, the Court awards damages based on interest and depreciation on the value of the ship ([1961] AC at 578 per Lord Reid, 580 per Lords Morton of Henryton and Tucker, 583 per Lord Morris of Borth-y-Gest; The Greta Holme [1897] AC 596). In Admiralty Commissioners v SS Susquehanna [1926] AC 655 at 664, Lord Sumner said that in such an assessment 'the practice of treating the injured ship, by a sort of personification, as a separate claimant is too inveterate to be disturbed now.' 88 And in Anthanasopoulos v Moseley [2001] NSWCA 266 ; (2001) 52 NSWLR 262 the Court of Appeal of the Supreme Court of New South Wales allowed car owners (or their insurer) who were deprived of the use of their vehicles to recover the cost of hire of a substitute vehicle while theirs underwent repair even though they were not out of pocket for that hire. That Court applied The Greta Holme [1897] AC 596 on the basis that injury to non income producing property which deprives a party of the use of the property is compensable and held that the claim was for general, not special damages (see 52 NSWLR at 276 [76] per Ipp A-JA; see too at 273 [54], 274 [58] per Beazley JA).


case_title: The London Corporation [1935] P 70

case_text: In The London Corporation [1935] P 70 at 77, Greer LJ, with whom Slesser LJ and Eve J agreed, said: 'Prima facie, the damage occasioned to a vessel is the cost of repairs - the cost of putting the vessel in the same condition as she was in before the collision, and to restore her in the hands of the owners to the same value as she would have had if the damage had never been done; and prima facie, the value of a damaged vessel is less by the cost of repairs than the value it would have if undamaged, though it is true that evidence may establish that the value of the vessel undamaged is exactly the same as her value after she had been damaged.' (see too Davidson v JS Gilbert Fabrications Pty Ltd [1986] 1 Qd R 1 at 3 per McPherson J, Andrews ACJ agreeing (at 1), 12 per Derrington J; Mackinnon McErlane Booker Pty Ltd v P&O Australia Ltd [1988] VR 534 at 544 per Murphy J, Gray and JH Phillips JJ agreeing; Gardiner v Metcalf [1994] 2 NZLR 8 at 14 per Hardie Boys J; see too McGregor on Damages (17 th edn) [32-003], [32-007].)


case_text: Because, the cost of repair is adopted as being equivalent to the diminution in the ship's value, it is immaterial that the repairs themselves are never executed: The York [1929] P 178 at 184-185 per Scrutton LJ with whom Greer LJ agreed at 187. 69 For the purchaser of the Gazelle Coast , that loss was the difference between the price paid and the actual value of the ship. Mr Dowell, an expert shipbroker, has assessed that difference at around USD 1.75m (i.e. that the vessel was really worth, at the time of its purchase, half of the purchase price). He arrived at that valuation on the basis that the cost of repairs, restoration work and substitute vessel hire actually incurred by Consort were necessary to bring the vessel to the standard at which it would have been worth the purchase price of USD 3.5m accounted for the difference in value. He considered that the purchase price was a proper reflection of market value for the vessel had it been in the sound condition which J-Mac's reports erroneously said it was. 70 There is, however, in this scenario the complication to which I referred earlier, namely that although Consort entered into the contract of purchase, and was liable for the price, it exercised its right to nominate Rho Beta 7 as the purchaser. Thus, when title to the vessel passed to Rho Beta 7, as I will discuss below, it, rather than Consort, suffered the loss of USD 1.75m. 86 The principle applicable to the right of a shipowner to recover from a wrongdoer the cost of hiring a substitute vessel while its own vessel is being repaired as a result of the tort, was stated by Viscount Sumner in SS Strathfillan v SS Ikala [1929] AC 196 at 205 (Lord Buckmaster agreeing at 205 and Lord Warrington of Clyffe gave a concurring speech at 211-212: see too per Scrutton LJ in The York [1929] P 178 at 184; The Yorkshireman (1827) 2 Hagg Adm 30n; 166 ER 155; cp: GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50 ; (2003) 128 FCR 1 at 240-241 [1062] -1067] per Finn J; Carslogie Steamship Co Ltd v Royal Norwegian Government [1951] UKHL 4 ; [1952] AC 292 at 300-302, 306, 313) thus: 'If... the [plaintiff's] case is to be that the delay upset the general current of their trade, which had to be maintained in spite of it, I think that the extent and cost of this upset must be proved and must be causally connected with the collision in accordance with the ordinary rules of law as to damage. A ship's day is not like a unit of currency, always good for so many shillings. It has to be proved that, in doing the shipowner the wrong of laying his ship idle at the time in question, work, which she would otherwise have done during the time, went undone to his measurable loss or was only done by resorting to other expedients at a measurable outlay.'


case_title: The Yorkshireman (1827) 2 Hagg Adm 30n


case_text: In Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd [1998] HCA 38 ; (1998) 192 CLR 603 at 617-618 [36] - [41] per McHugh J, 638 [97(2)] per Kirby J and 654 [134] per Hayne J, this principle was applied to a case of negligent advice in contract or tort. 111 Here, Consort would not have undertaken the borrowing from ANZ or engaged in the whole exercise of procuring the acquisition of the Gazelle Coast if J-Mac had given accurate prepurchase survey reports to it. By the time the inaccuracy of J-Mac's reports became known, Consort was in the invidious position of being obligated to ANZ to maintain the value of the ship and Rho Beta 7. Not only that, Consort needed the ship for the purposes of its own business; after all that was the very purpose of the acquisition in the first place. Rho Beta 7 had no money or resources other than as may have been able to be provided by Consort. 112 As a matter of commonsense, without Consort's financial support, Rho Beta 7 could not have raised any money on the security of the ship with which to effect the repairs and restoration work which were needed. That is because the ship was worth about half of what Rho Beta 7 owed to Consort on the loan of the purchase price. The ship was mortgaged to ANZ and Rho Beta 7 had given a fixed and floating charge to ANZ. Its borrowing capacity against its only substantive asset was non existent. That is because Rho Beta 7's net asset position was one in which its liabilities exceeded its assets by about 100%, once the value of the ship was written down to half the purchase price. As a consequence, if repairs and restoration work were to be effected, they could only be by Consort using its financial resources to borrow the money and thereafter seeking to recoup itself from the wrongdoer who had place it into that position, namely J-Mac.