CATCHWORDS
TRADE PRACTICES - s52 - whether sufficient evidence to enable assessment of damages.
JLW (Vic) Pty Ltd v Tsilogou (1994) 1 VR 37
RAIA Insurance Brokers Ltd v FAI General Insurance Co Ltd (1993) 41 FCR 164
Prince Manufacturing Inc & Anor v Abac Corporation Australia Pty Ltd & Anor (1994) 4 FCR 288
Poseidon Ltd & Anor v Adelaide Petroleum NL & Ors (1991) 105 ALR 25
No. NG 974 of 1993
WINNING APPLIANCES PTY LTD v DEAN APPLIANCES PTY LTD and Ors
MOORE J
SYDNEY
22 August 1995
IN THE FEDERAL COURT OF AUSTRALIA)
)
NEW SOUTH WALES DISTRICT REGISTRY) No. NG 974 of 1993
)
GENERAL DIVISION )
BETWEEN: WINNING APPLIANCES PTY LIMITED
First Applicant
AND: DEAN APPLIANCES PTY LIMITED
First Respondent
GARRY KEITH LEASK
Second Respondent
MARY CHRISTINE LEASK
Third Respondent
JUDGE: Moore J
PLACE: Sydney
DATE: 22 August 1995
ORDER OF THE COURT
THE COURT ORDERS THAT:
1. That the Respondents pay the Applicant damages in the sum of $100.00.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA)
)
NEW SOUTH WALES DISTRICT REGISTRY) No. NG 974 of 1993
)
GENERAL DIVISION )
BETWEEN: WINNING APPLIANCES PTY LIMITED
First Applicant
AND: DEAN APPLIANCES PTY LIMITED
First Respondent
GARRY KEITH LEASK
Second Respondent
MARY CHRISTINE LEASK
Third Respondent
JUDGE: Moore J
PLACE: Sydney
DATE: 22 August 1995
SUPPLEMENTARY REASONS FOR JUDGMENT
On 6 July 1995 I published reasons for judgment in this matter though I invited further submissions on the issue of what damages, if any, should be awarded as a consequence of the finding I had made that the respondents had engaged in conduct in contravention of s52 of the Trade Practices Act 1974 ("the Act"). In that earlier judgment I adverted to several bases upon which damages might be awarded though I indicated reservations about the extent to which the evidence would justify an award of damages.
The applicant submits that the evidence discloses loss of custom by reason of the respondents' conduct and general damages should be awarded. There is evidence of one potential customer, Mrs Chapman, who purchased goods from the first respondent on the assumption that she was dealing with the business of Dean Distributing. It was a washing machine sold for $736.00. It is probable that Mrs Chapman would have bought that washing machine from the applicant had the respondents not been trading using the "Deans" name. Less direct evidence of Mr Liam Murphy was relied upon by the applicant to demonstrate lost custom. Mr Murphy gave evidence, which was objected to but admitted, that in the six months preceding the time he swore his affidavit, 13 October 1994, he had dealt with at least ten customers who had walked into the applicant's premises in Crows Nest on the mistaken belief that it was the premises of the first respondent from whom they had ordered goods. In only one instance is the appliance identified and there is no evidence of its value or likely profit on its sale. This provides further, though limited, evidence of custom lost by the applicant as a result of the conduct of the respondents.
Thus, there
is some evidence on which I could conclude the applicant lost sales on eleven
items it would otherwise have sold. The
Court could only speculate on the extent to which other sales were lost. Plainly an inference can be
drawn that there were other sales made by the respondents that might have been
made by the applicant but there is no material upon which any reasonable
assessment might be made of the extent of lost sales.
It is clear from the evidence more generally that the respondents used the name "Deans" or variants of it in trading from shortly after April 1993. What is not clear is the income and profit that was derived from this trading. The applicant made some attempt to establish the income of the first respondent in the cross-examination of Mr Leask. Mr Leask said that at the time he gave evidence, October 1994, it had not been ascertained whether the first respondent had earned income and if so in what amount. That was because no attempt appeared to have been made by the second and third respondents to differentiate between the trading activities of Woodwards Pty Ltd and those of the first respondent. There is no evidence of the profit likely to have been earned on the sale of products of the type sold by both the applicant and the first respondent.
There is no evidence of the total sales made by Woodwards Pty Ltd and the first respondent in their combined trading activities during the period of the contravening conduct, at least till the trial, and the combined income of both. Evidence could have been led by the applicant to demonstrate what those sales and income were in that period and the profit margins of the products sold. That at least would have provided the parameters within which an informed estimate may have been made as to the maximum amount of lost profit. That could have been coupled with evidence elicited from the Leasks about the proportion of sales gained through the trading under the "Deans" name and the trading under the "Retra Vision" name or other names used by businesses of the second and third respondents.
The only evidence upon which any estimate of damages can be made without engaging in speculation is the lost sale of Mrs Chapman. There is no evidence of the likely profit margin on that sale but that is a matter upon which the Court may make a judgment and I proceed on the basis that the profit lost on that sale was one hundred dollars.
I accept, as the respondent submitted, there must be some evidence of both the fact of damage and the amount of damage: see J.L.W. (Vic) Pty Ltd v Tsilogou (1994) 1 VR 229. The applicant relies upon the judgment of Beaumont J in Prince Manufacturing Inc & Anor v Abac Corporation Australia Pty Ltd & Anor (1994) 4 FCR 288 in which his Honour says:
"In my opinion, where the conduct which constitutes a contravention of s52 also constitutes the tort of passing-off and a claim is made under s82 for damages, it is appropriate to apply a measure of damages similar to that applied under the general law of passing-off (see Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre (1978) 140 CLR 216 at 227). In particular, in my view, general damages for loss of business profits may, in a proper case, be recovered under s82. By general damages it is meant damages which are not capable of precise proof and calculation but which could be expected to result in the normal course of things from a particular type of conduct. Damages of this kind may be awarded even though a claimant does not produce evidence of particular losses from particular transactions (see Taperell, Vermeesch and Harland, Trade Practices and Consumer Protection(3rd ed), p 127; Spalding v Gamage (1918) 35 RPC 101; Draper v Trist [1939] 3 All ER 513; Procea Products Ltd v Evans & Sons Ltd (1951) 68 RPC 210; Wilson v Smith (1902) 2 SR (NSW) 174; The Magnolia Metal Company v The Atlas Metal Company (1897) 14 RPC 389; Simpson Ltd v Hubbards Pty Ltd (1982) 44 ALR 695; Locklin v Day-Glo Color Corporation (1970) Trade Cases 73-241).
In Prince (supra) Beaumont J had some evidence of both the number of units sold by the party whose conduct had contravened s52 and the likely profit margin on each unit sold. His Honour also had evidence of the fall in sales of the party claiming damages during the period of the contravening conduct.
I was also referred by the applicant to a number of additional authorities in which the principle has been stated and restated that damages are to be awarded even in circumstances where their quantification is difficult and involves a fair measure of estimation. Recent examples in this Court are RAIA Insurance Brokers Ltd v FAI General Insurance Co Ltd (1993) 41 FCR 164 at 179 and Poseidon Ltd & Anor v Adelaide Petroleum NL & Ors (1991) 105 ALR 25 at 40-41.
Nonetheless
there is no rule of universal application that in circumstances where evidence
might be led to indicate, even if unprecisely, the extent of the damage
suffered and it is not, the Court is simply to guess the amount of damages to
be awarded. Brooking J in JLW
(supra) helpfully reviews a number of authorities concerning the adequacy of
proof and the court's role in assessing damages. It must be accepted, as Mason CJ and Dawson J
said in The Commonwealth v Aman Aviation
Pty Ltd (1991) 174 CLR 64 at 83 that "where precise evidence is not
available the Court must do the best it can". However as the review by Brooking J makes
plain, the extent to which a Court will estimate damages in the absence of
precise proof will depend upon the nature of the damage suffered. As his Honour said:
"There is no rigid dividing line between cases in which guesswork is permissible in assessing damages and cases in which it is not. The borderline between guesswork and rational assessment is itself indistinct, as is the line between evidence that is "precise" (the Permanite Case dictum) and evidence that is not. In Enzed Holdings Ltd v. Wynthea Pty Ltd (1984) 57 A.L.R. 167, at pp. 182-3 (to which Tadgell J. has drawn my attention) the Full Federal Court thought the case to be one in which precise evidence of the loss was not obtainable, so that if the trial judge found that the plaintiffs had suffered some loss he must do his best to quantify the loss even if "a degree of speculation and guesswork" was involved."
In the present case the Court is, in substance, being asked to guess what was the loss suffered by the applicant as a result of lost sales in circumstances where evidence could have been called to permit a considered evaluation of the loss suffered even if that evaluation itself would have involved estimation. It is for the applicant to make out its case on the loss suffered: see Watts v Rake (1960) 108 CLR 158 at 159 and this it has failed to do save in relation to the Chapman sale. I am not satisfied that there is sufficient evidence upon which an assessment may be made of damages arising from sales the applicant lost, apart from the Chapman sale, as a result of the trading activities of the respondents in contravention of s 52 of the Act.
The applicant also contends that general damages can be awarded for the loss of the opportunity to fully exploit the name it had acquired. I accept that the activities of the respondents inhibited the applicant from trading under that name. However, it did not prevent it doing so. Had the applicant traded under the name, the result may have been, as Mr Winning apprehended it would be, that its endeavours in promoting itself would have also benefited the respondents. If so, and subject to questions of proof, the applicant would have been in precisely the same position it is in now. That is, having to establish sales lost to the respondents as a result of their conduct in contravention of s52. The failure of the applicant to trade under the name "Dean Distributing" until November 1993 and then only in a limited way, was a deliberate decision taken by Mr Winning. As no loss of or damage to goodwill has been established, the mere trading in the name of "Deans" or variants of it by the respondents does not, in my opinion, sound in damages on this basis.
These last observations apply equally to the submission made by the applicant that special damages should be awarded for the loss of the benefit of the $5,500 purchase price for the name paid to the liquidator in March 1994.
I conclude
that the applicant has not made out a case for damages save for damages in the
sum of $100.00 for which
judgment will be entered and am not satisfied that it should be against the
first applicant only.
I certify that this and the preceding six (6) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Moore.
Associate: ......................
Dated: ..../..../....
APPEARANCES
Counsel for the Applicant: Mr D Pritchard
Solicitor for the Applicant: Harris & Company
Counsel for the Respondent: Mr R Vincent
Solicitor for the Respondent: J R Gibb & Co
Dates of Hearing: 17-19, 24 October 1994 and 16 February 1995
Date of Judgment: 22 August 1995
Written Submissions Completed: 18 July 1995
