`` CATCHWORDS
TRADE PRACTICES - claim for damages under s82 - loss of opportunity to build car park - calculation of damages.
Trade Practices Act 1974 - s82
Sellars & Anor v Adelaide Petroleum NL & Ors (1994) 179 CLR 332
Daniels & Ors v Anderson & Anor (1995) 16 ACJR 607
No. NG 882 of 1993
HOSMER HOLDINGS PTY LTD & Ors v C.A.J. INVESTMENTS PTY LTD
MOORE J
SYDNEY
18 September 1995
IN THE FEDERAL COURT OF AUSTRALIA)
)
NEW SOUTH WALES DISTRICT REGISTRY) No. NG 882 of 1993
)
GENERAL DIVISION )
BETWEEN: HOSMER HOLDINGS PTY LTD
& Ors
Applicants
AND: C.A.J. INVESTMENTS PTY LTD
Respondent
JUDGE: Moore J
PLACE: Sydney
DATE: 18 September 1995
ORDER OF THE COURT
THE COURT ORDERS THAT:
1. The Respondent pay the applicants the sum of $55,000 by way of damages and interest in the sum of $13,525.00.
2. The respondent pay nine tenths of the applicants' costs.
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 882 of 1993
)
GENERAL DIVISION )
BETWEEN: HOSMER HOLDINGS PTY LTD
& Ors
Applicants
AND: C.A.J. INVESTMENTS PTY LTD
Respondent
JUDGE: Moore J
PLACE: Sydney
DATE: 18 September 1995
REASONS FOR JUDGMENT
These reasons for judgment have to be read in conjunction with reasons for judgment published on 30 March 1995. In those reasons I dealt with the issue of whether there had been a contravention of s52 of the Trade Practices Act 1974 ("the Act") by the respondent. I concluded there had been. In so far as the applicant sought damages under s82 of the Act, I dealt with that matter in a qualified way. The qualification is explained at pp 38 and 39 of my earlier judgment.
There is now affidavit evidence from the applicants, which was not objected to, of Tarhsine Nikro who is a director of the first applicant. Mr Nikro is a builder and says that the cost of completing the construction of the car park would be $15,752.
What loss or damage the applicants suffered as a result of the contravening conduct of the respondent involves the assessment of past hypothetical events: see Malec v J.C. Hutton Pty Ltd (1990) 169 CLR 638 and also Sellars & Anor v Adelaide Petroleum NL & Ors (1994) 179 CLR 332. It is necessary to consider what would have happened had the respondent not engaged in the contravening conduct. Plainly, events could have followed a number of courses. The respondent sought to rely on an affidavit of Mr Morris who was, at the time, a director of the respondent. It deals with what he might have done. It is objected to. The respondent accepts that an affidavit as to what a party might have done is of little or no weight: see Dominelli Ford (Hurstville) Pty Ltd and Anor v Karmot Auto Spares Pty Ltd (1992) 38 FCR 471 and I do not propose to pay regard to it.
In my earlier judgment I expressed the view that:
"The access road and car park would not have been completed for at least twelve months after 8 December 1989 because Mr Sawtell was not co-operating".
and later:
"... I am satisfied on the balance of probabilities that the applicants would have satisfied the condition by building the access road and car park by mid 1993".
That observation was made by reference to the way the applicants, in fact, were conducting themselves in 1990.
Had settlement not been effected on 8 December 1989 on the terms
it was, the applicants would have more probably than not applied themselves
more diligently to the task of gaining the consent of adjoining owners and
securing the execution of relevant documentation and, thereafter, constructing
the car park. That would no doubt have
taken some time to do. Mr Sawtell was
the adjoining owner whose prevarication delayed, in fact, the consent of all
adjoining owners being obtained till after he sold his property in 1991. However there was evidence from which I infer
that by March 1990 Mr Sawtell was prepared to agree to the construction of the
car park though his agreement was subject to a qualification that he would not
have to contribute to the cost of construction or ongoing maintenance. The evidence was a letter dated 6 March 1990
from his solicitors, Thomas Mitchell and Partners, to Mr Rees of the City of
Lake Macquarie. There is no evidence
that suggests, to that point, Mr Sawtell would have been required to contribute
to the cost of construction, though on the evidence, the applicants had not
then committed themselves to ongoing maintenance. That did not occur till September 1990. So much is apparent from a letter dated 12 September
1990 from the applicants' solicitor to Mr Rees.
However, had settlement not taken place in December 1989, it is likely
that the commitment to on-going maintenance would have been made much earlier
and could well have been made at the time Mr Sawtell
was indicating his qualified agreement to the construction of the car
park. It is probable that, in those
circumstances,
the consent of all owners could have been secured in the early months of 1990.
Had the condition of the development application been satisfied by early 1990 then it is likely that the contractual arrangement between the applicants and the respondent would have endured and, as a consequence, the applicants would have expended a sum in the order of $15,000 in constructing the car park and not, as ultimately happened, forfeited the sum of approximately $80,000. Settlement would then have taken place on the basis that the condition had been satisfied.
It must also be accepted that events may not have unfolded as I have just described them. Greater delay may have attended the completion of the steps necessary to satisfy the condition of the development application. Had there been further delay it is likely that the respondent would not have idly sat by waiting for the applicants to satisfy the condition. What would have eventuated raises the issue of what the rights of the parties would have been under the contract in the event that the condition was not satisfied. Various assumptions would have to be made on questions of fact before any hypothetical determination could be made of the respective rights of the parties under the contract of sale. These issues have not been addressed by the parties save in a limited way by the respondent, and I do not propose to address them independently of what has been put to me by way of submission. However the respondent does make the submission that any damages that might be awarded should be discounted for the possibility that the applicants could not satisfy the condition of the development consent and recision of the contract and litigation between the parties following in that event.
As I have just discussed, had the respondent not engaged in the contravening conduct, it is likely that the car park would have been constructed by early 1990 and settlement effected on that basis. However should some allowance be made for the contingency that that would not have occurred if, as I accept it is, it is a real one? The leading judgment of the High Court in Sellars (supra) at 356 per Mason CJ, Dawson, Toohey and Gandron J indicates there should. Their Honours said:
"... the general standard of proof in civil actions will ordinarily govern the issue of causation and the issue whether the applicant has sustained loss or damage. Hence the applicant must prove on the balance of probabilities that he or she has sustained some loss or damage. However, in a case such as the present, the applicant shows some loss or damage was sustained by demonstrating that the contravening conduct caused the loss of a commercial opportunity which had some value (not being a negligible value), the value being ascertained by reference to the degree of probabilities or possibilities. It is no answer to that way of viewing an applicant's case to say that the commercial opportunity was valueless on the balance of probabilities because to say that is to value the commercial opportunity by reference to a standard of proof which is inapplicable.
The conclusion which we have reached on this question finds support in other considerations. The approach results in fair compensation whereas the all or nothing outcome produced by the civil standard of proof would result in the vast majority of cases in over-compensation or under-compensation to an applicant who has been deprived or a commercial opportunity. Furthermore, it is an approach which conforms to the long-standing practice of taking into account contingencies in the assessment of damages.
On the findings made by the trial judge, the Pagini contract
would have been entered into but for the contraventions of
s52(1). Although, on the probabilities,
it would not have been completed, there was a significant chance that it would
be completed. It follows that the Full
Court of the Federal Court were not in error in dismissing the appeals."
Thus it is necessary to consider the value of the lost opportunity to construct the car park by reference to the degree of probabilities or possibilities. The possibility that it could not have been constructed and events unfolded as postulated by the respondent, though slight, must be taken into account in assessing that value. A similar approach was adopted, though in an entirely different factual context, by the New South Wales Court of Appeal in Daniels & Ors v Anderson & Anor (1995) 16 ACSR 607 especially the joint judgment of Clarke and Shelter JJA at 686 to 691 on causation and 717 to 719 on damages.
Accordingly some allowance should be made for the contingency adverted to by the respondent. In written submissions the applicants claimed damages in the sum of $63,493.00 being the difference between the guaranteed sum paid to the Council on 16 February 1993, $79,500, and the cost of building the car park $15,757. They also claimed the bank charges for maintaining the guarantee between 8 December 1989 and 16 February 1993 in the sum of $4,345. These charges are said to be proved by an affidavit of Nicholas James Lourandos "sworn ... June 1995". No such affidavit was filed and there is no evidence by reference to which these charges can be calculated. Interest is then sought on the total sum.
I propose to discount the sum of $63,493 by $8,493 to reflect the possibility that the car park would not have been built and events unfolded in the way adverted to by the respondent and also to make some allowance for the ongoing cost of maintenance of the car park, though I accept that the evidence does not suggest that much would be involved in doing so.
Accordingly I determine that damages in the sum of $55,000 should be awarded to the applicants together with interest in accordance with s51A of the Federal Court of Australia Act 1976 to accrue from the 16 February 1993. This amounts to $13,525.00 which has been calculated on the basis submitted by the applicants which was not put in issue by the respondent.
The applicants are entitled to costs. However the matter should have concluded when the matter was listed for hearing. Both the applicants and the respondent have incurred additional costs as a result of the need for written submissions after I first published reasons on 30 March 1995. That flowed from the failure of the applicants to fully prepare their case. The respondent should not bear all the applicants costs and some allowance should be made for additional costs incurred by the respondent. While orders might be made endeavouring to identify and deal with the additional costs, I propose to address the matter by ordering the respondent to pay nine tenths of the applicants' costs.
I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Moore.
Associate: ....................... Date: ..../..../....
APPEARANCES
Counsel for the Applicants: Mr M.R. Aldridge & Mr P.J. Hayes
Solicitor for the Applicant: Vandenberg Reid
Counsel for the Respondent: Mr S.J. Motbey
Solicitor for the Respondent: Lyons & Lyons
Written Submissions Concluded: 8 August 1995
