"Ul nuthet Reda ; . Ko, ' ; CATCHWORDS TRADE PRACTICES - reliance on respondent's expertise - reasonable time only allowed. FEDERAL COURT - interest - applying State law - Western Australia - statute applicable to courts generally - whether jurisdiction to award. Trade Practices Act 1974, ss.52, 71(2) Supreme Court Act (W.A.) 1935-1979 ss.32, 34 Ned Schepis & Ors. v. Elders IXL Limited WA G68 of 1986 PINCUS J. BRISBANE 24 DECEMBER 1986 \ FEDETAL + G AUSTRA: Pay 3 Aur 1 a . IN THE FEDERAL COURT OF AUSTRALIA ) WESTERN AUSTRALIA DISTRICT REGISTRY ) W.A. GOB of 1986 GENERAL DIVISTON ) BETWEEN: NED SCHEPIS, CARMELO SCHEPIS, VENY SCHEPIS and JOHN SCHEPIS Applicants AND: ELDERS IXL LIMITED Respondent MINUTES OF ORDER JUDGE MAKING ORDER: PINCUS J. DATE OF ORDER: 24 DECEMBER 1986 WHERE MADE: BRISBANE THE COURT ORDERS THAT: i. The respondent pay the applicants the sum of $51,000. 2. Costs be reserved. 3. The time for the filing of a notice of appeal he extended until 28 January 1987. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. (s IN THE FEDERAL COURT OF AUSTRALIA ) WESTERN AUSTRALIA DISTRICT REGISTRY ) W.A. G68 of 1986 GENERAL DIVISION ) BETWEEN: NED SCHEPIS, CARMELO SCHEPIS, VENY SCHEPIS and JOHN SCHEPIS Applicants AND: ELDERS IXL LIMITED Respondent PINCUS J. 24 DECEMBER 1986 REASONS FOR JUDGMENT This 18 a case about the cause of the relative failures of two crops of tomatoes grown by the applicants on their property near Perth in the 1984/85 and 1985/86 seasons. The applicants' case 1s that the principal cause of the relative failures was that they relied on an irrigation system supplied by the respondent for watering and fertilisation of the tomatoes, but that system worked very poorly. I call the failures "relative" because, although tomatoes were produced 1n each season, they were not as_ good, large or numerous as they should have been. There is credible expert evidence that the system was deficient as alleged, and nothing to contradict it. No witness has been called by the respondent as to the efficacy of the system it supplied. For the reasons explained below, it seems clear that the respondent must be held liable under s.52 of the Trade 2. ? Practices Act and under the general law, but the extent to which it 1s liable is a complicated question depending on the analysis of a mass of evidence. It is common ground that the two tomato crops were not very successful, and that causes having nothing to do with the respondent made at least some contribution to their unsuccess. It is not possible by any mathematical process to apportion the effects of the various causes, and I have, in the end, adopted a broad estimate. In arriving at it I have had to reach conclusions on a number of contested factual questions mentioned below. Of these, the one which is most important is whether the respondent should be held liable for the results of the deficiencies in the irrigation system throughout the whole of the two seasons, or whether the loss should be "cut off" at an earlier date; on that point, as will appear, my conclusion is in favour of the respondent, principaily because I think the applicants should have obtained advice other than that of the respondent at a tame earlier than they did. Pleadings The statement of claim inthe form in which 1t came before me alleged that the applicant Ned Schepis approached the respondent to design and supply an automatic irrigation and fertiliser system, and that the applicants made known that they required "automatic and variable irrigation and fertilisation of individual bays of tomato plants at varying rates of watering and application of fertiliser specified by the applicants". There was also to be a self-cleaning filtration system operating automatically. The defence, to put it simply, denied that the 3. respondent undertook to design anything, but as will appear, that issue was not seriously contested. The statement of claim also alleges that the respondent, by Trevor Guest, represented to the applicant Ned Schepis, ain substance, that the respondent could design and supply an efficient system which would meet the applicants' requirements. Other representations were also alleged, but it is not necessary to deal with them. The defence denies that any such representations were made. Then the pleadings show, in substance, an agreement that there was a contract to buy an irrigation system for $13,270.25, and that the contract was carried out. The statement of claim also alleges that the representations were false in that, inter alia, the system failed to meet the applicants' requirements. Counsel for the respondent took the point that s.52 of the Trade Practices Act cannot create liability for mere broken promises; however, for reasons which will appear, it ais not necessary to determine how that principle applies to the present case. The defence also pleads that the system supplied was. one specified by the applicants; that allegation was not' seriously pressed, although there was some evidence that Ned Schepis participated in the selection of some equipment. The statement of claim goes on to say, in effect, that the representations were false in that the respondent did not have the capacity to design and supply such a system as was required. The applicants' pleading further says that each representation was a term of the contract, and alternatively that it was an implied term of the contract, that the system would be reasonably fit for the purpose for which it was supplied. Lastly, the applicants plead a case in negligence. As the hearing progressed, it became clear that one of the applicants' complaints, not covered by the pleading, was that the equipment had been supplied too late in the first season - 1.e. in the 1984/85 season, and that the delay had caused a loss. Counsel for the applicants sought to amend, but counsel for the respondent informed me, and I accepted, that the respondent would not be able to meet that case without further investigation which would necessitate an adjournment. In the special circumstances, 1t seemed to me unfair to force the respondent to litigate the issue of delay, without an adjournment properly to prepare its case on that rather complicated question. Since the applicant did not wish the amendment to be granted on terms as to an adjournment, I refused the application for amendment. That had consequences adverse to the applicants, for they attributed part of their loss - rightly as 1t seemed to me - to the fact that the system was not installed until rather late in the 1984/85 tomato season. Ned Schepis and Trevor Guest Under this heading I deal with the evidence of the applicant Ned Schepis and that of Trevor Guest, they being the two principal witnesses as to the dealings between the parties. Both 5. of them appeared to me fairly honest witnesses, although Guest was, early in his evidence, somewhat unco-operative. Schepis is an automotive mechanic by trade, but he and his family have for some years had experience in market gardening. In 1982, he received a letter from the respondent regarding Guest's availability as an "irrigation specialist" and received a business card, which was tendered, to the same effect. He met Guest and discussed irrigation problems with him. Guest explained that his own experience in arrigation was principally in "overhead" systems, meaning thereby systems in which water 15 sprayed into the air, rather than being run or trickled onto the soul. That known limitation on Guest''s experience 15 of importance and bears upon the reasonableness of the applicants' continuing to rely upon the respondent after difficulties arose with the system supplied by the respondent, a subject further discussed helow. Schepis says that in the 1982/83 season he had an arrigation system which he installed after consulting Guest and others, one of the latter being described as the "local irrigation adviser". In that season, the applicants put in 5-6,000 tomato plants and in the 1983/84 season intended to increase their planting to about 12,000. That proposal was discussed with Guest who took measurements, heights and levels and roughly designed an irrigation system, apparently for no fee. That system worked fairly well. It incorporated means of fertilising the plant but not "automatic" means. Coles Stores bought tomatoes from the applicants in the 1983/84 season and asked, during or at the end of that season, if the applicants could increase their production. Schepis formed the view that he could not do so without automating his irrigation and fertilising system, and spoke to Guest in April 1984 on the subject. Guest told Schepis that an automatic system could he provided and that he had experience with automatic reticulation of water. However, Schepis knew that Guest was not really experienced in the specific sort of system the applicants desired. About the middle of 1984, Guest again took steps to design a system to suit the applicants' requirements and, for some months, had numerous conversations with Schepis about the matter. Guest's evidence was that about this time he sent a representative from "Hardies" to Schepis. Although Schepis did not admit that, I find it to have occurred, and find, more generally, that at all material times Schepis was aware that Guest relied, at least to some extent, upon Hardies with respect to technical matters. The respondent acted as agent for distribution of Hardies' irrigation products. Hardies submitted a design of an automatic system, but Schepis rejected it as too dear, According to Schepis, Guest said that he would produce a cheaper design. Guest was inclined to say that he took no responsibility for design, but merely transmitted to the applicants Hardies' ideas about design. In cross-examination, however, he substantially abandoned that position, and I am satisfied that he assumed responsibility, in large part, for supplying a design, relying upon such information 7. "supplied by Hardies as he thought fit. It would seem to have been, in a commercial sense, rather reckless for the respondent, through Guest, to have done this. It had no true expertise available in the area. Of course, no design fee was paid. It must have been clear to Guest that if the system failed the applicants might sustain considerable losses. However, I do not think Guest is the sort of Man who gives thought to self-protection above all else; he was genuinely anxious to help the applicants, no doubt partly in order to make a sale, but also because he 1s temperamentally so inclined. He worked on the applicants' irrigation system in his own time, as well as in that of his employer. I find that Guest told the applicants about the middle of 1984 that he would submit a design with a cost estimate. No design was ever produced, but Guest, working on the basis of Hardies' design, supplied a quotation Listing equipment which he thought was necessary to achieve the applicants' purposes. The design was implicit in the selection of the equipment. Guest gave evidence that he knew nothing about automatic fertilisation and Schepis gave no evidence that Guest ever claimed expertise in that area. JI think Schepis was determined to have the system designed for no charge, if he could, and to some extent exploited Guest's over-enthusiasnm. Schepis intended to use the quotation from the respondent to "shop around", no doubt endeavouring to get the same equipment cheaper elsewhere, having the advantage of the respondent's design work. In the event, however, the quotation 8. . 'arrived too late to enable him todo that. Schepis had no understanding of the extent to which expertise is in truth necessary in the selection and layout of irrigation equipment of such a sophisticated kind as he desired. He seems to have been willing to accept the risk that such a modestly experienced person as Guest might prove incapable of supplying the requisite technical knowledge. Equipment supplied by the respondent arrived and was installed, in important respects, under the supervision of Guest. The only person with any real claim to relevant technical experience who took part in the installation was an electrician engaged by the applicants, one Gary Pruden. However, as Pruden made clear i1nhis evidence, he also had to rely upon Guest's supposed knowledge, having no experience of the kind which was relevant to the specific task in hand. The applicants intended to plant seedlings from about the beginning of October 1984. They intended to have the system operating before planting, but 1t arrived too late, for reasons which do not require examination. Towards the end of October, the system was put into operation, but the pipe joins started to part under the water pressure. Remedial steps were taken on Guest's advice, including the fitting of a "non-return valve", use of 45 degree joins instead of 90 degree joins, and bolting of the unions. At the end of November 1984, a critical part of the system arrived, namely a pump having the function of injecting 9. . fertiliser into the systen. That was selected by Guest, but erroneously so. Since it was clear to Guest that it could not be installed on the discharge side of the main pump, he put it on the suction side with results mentioned below; for present purposes, 1t is enough to note that the pump did not work properly. Even before that, the plants were suffering from lack of water and fertiliser. The intention from the outset was, as I have mentioned, that the system would be automatic. It was intended to supply irrigation and fertilisation to different parts of the applicants' cultivation by electrical controls, without the necessity of human intervention. None of the persons who were engaged in the task of establishing the system, however, had sufficient relevant experience. As time went on, and the deficiencies of the system continued, one would have expected Schepis to lose confidence in Guest; for example, Schepis says in his evidence that the pipe at the pump end of the system blew out several times during the season, despite the fact that the unions had been bolted. The evidence continued: "Mr. Guest a inspected the system on a number of occasions but could not explain why these blow-outs were occurring." Schepis' evidence was that at the end of 1984 he told Guest that the system was constantly blocking and that the means of clearing the filters (by reverse flush) did not appear to he working. Schepis said, and I accept, that when the system was examined on that occasion breakages and missing parts were 10. discovered. Guest advised Schepis to put in a non-return valve, and he took that and other measures. Schepis also said, and I find, that the controller did not automatically cause each section of the cultivation to he fertilised at its appropriate rate, as was intended. Guest suggested that time delay clocks be installed. That was done, but they did not cure the problem. About this time (December 1984), Guest left the respondent's employ, having recommended to Schepis that he contact Hardies Irrigation in Perth to seek a remedy for any problems he encountered. In February 1985, during operation of the system, part of it "blew to pieces" and Schepis complained to the respondent, whose representative was then one Bachos. Having consulted with Hardies and Bachos, by arrangement with the former Schepis sent the injection pump, which was still not working properly, to Hard1ies in Adelaide to be tested. He installed a new pump in the meantime, which also did not work properly. There were other difficulties, also, about that time, but in my opinion 1t must have become obvious before the end of the 1984/85 season, that the system was seriously defective. If Schepis had ever had the idea (as he apparently did) that Elders, through Guest or otherwise, had been able to supply such a system as would fulfil his requirements, he must have lost that illusion well before the 1985/86 season started. According to Schepis, the applicants "could not afford outside consultants and had to rely on Elders themselves for help". ll. He went on to say that between May and October 1985 he contacted Bachos ona number of occasions to ask for help in getting the system working. Bachos passed him on to a man called Smith at Hardies who passed him on to a man called Chris. "Chris was concerned but unfamiliar with the complexities of the system." Thus, the respondent having made it clear enough that it could do no more than pass the problem to its supplier Hardies, it was in my view past time for the applicants to get expert assistance. During the 1985/86 season, the system, at first, was working as it had in the previous season - 1.e. very badly. Ultimately Schepis contacted a person with the relevant expertise, one Green, and the system was corrected and made to work properly. However, that did not occur until January 1986, by which time much damage had been done. During the 1985/86 season, prior to Green's intervention, other ineffective remedial steps were tried, the details of which it 1s unnecessary to recount. It should also be mentioned that 1t 12S common ground that an insect, the "two spotted-mite" attacked the crop in the 1985/86 season, However, that 1s of no consequence because, in my opinion, the applicants behaved unreasonably in failing to obtain advice from any qualified person for such a long period of time, and Iam not prepared to allow any losses in respect of the 1985/86 season. I decline to do so, not on the basis of any general principle that in such circumstances the time during which recovery is allowed must be severely limited, but because of the particular circumstances of this case. Of these, an important one is' that Schepis was from the outset unwilling to pay for competent advice. . 12. Expert Evidence as to Defects of System There was evidence from two people with sufficient knowledge to analyse the deficiencies of the system. One was Mr, J.D.S. Hill, an engineer, and the other an irrigation consultant, Mr. P.E. Buck. The latter had no formal qualifications, but had sufficient relevant experience to make his opinion of value. Hill said that there were four things wrong with the design: the metering pump was wrongly chosen, the filters were of the wrong capacity, measures should have been taken to protect the system against excessive pressure, and thicker pipes should have been used in the higher pressure parts. Of these deficiencies, 1n my view, the most serious was the first. Hill explained that the suction effect of the main pump (which, as I have explained, was mounted "downstream" from the metering pump) was such that the metering pump had little effect upon the course of events. The main pump had such strong suction that it simply drew fertiliser straight through, whether or not the metering pump was working. The result was that a basic element of the system did not function. Instead of the flow of fertiliser being elaborately controlled, the amount drawn into the system depended upon random factors having nothing to do with the crop's fertiliser requirements. As a result, sometimes too much fertiliser was injected, and sometimes not enough. Only by chance would the desired amount be introduced. I infer that Guest did not have such understanding of the mechanism as to enable him to make a proper choice of injector pump. The injector pump was in ' 13. . truth designed to be mounted on the other (positive pressure) side of the main pump; Guest knew this. As to the other three deficiencies, little need he added. It should be pointed out, however, that the error made with respect to filter selection appears to have been of an elementary kind. The filters were designed to work with specified minimum flow rates; the system produced a rate of flow well helow them. I gained the impression from Hill's evidence that no extensive theoretical training is necessary to enable one properly to design an irrigation system. In his opinion people who market irrigation equipment generally have enough knowledge to calculate pressures and flow-rates. That supports the applicants' case, because it makes it seem reasonable for the applicants, in the first instance, to have assumed that Guest might have, or at least have ready access to, such information as was needed to permit a proper selection of equipment. It does not follow, however, that the applicants were entitled, when they knew that serious mistakes in equipment selection must have been made, simply to bill their losses to the respondent. Particularly is that so when the respondent''s amateur design work had been free and the applicants were aware that proper qualified advice was available. I do not accept that the applicants were, at relevant times, unable to expend the relatively modest sums necessary to engage people to inform them what was wrong with the system. Schepis expended monies in taking certain relatively ineffectual remedial steps, on the advice of Hardies and in consultation with Pruden. 14. Buck gave evidence that he has been a private irrigation consultant for some years, and that his firm charged "some $400 odd per day inclusive". The most obvious deficiency, in his opinion, was the insecure pipework. He agreed that the filters were wrongly selected. In his view, apart from the correction of the fertilising metering system (which had already occurred at the date of his inspection), other upgrading steps were necessary to achieve satisfactory operation and reliable performance. He estimated their cost to be $6,000. It should be added that Mr. Green, who was responsible for correcting the fertiliser metering system, was not called, but his report of 13 February 1986 was tendered. According to Schepis, some months elapsed between his first request for Green's help and Mr. Green's supplying 1t. I infer that Schepis did not press him to come as a matter of urgency. Conclusions as to Liability To some extent, the deficiencies in the system were such as cannot be attributed to any fault on the part of the respondent. That particularly applies to electrical work done by Mr. Pruden, who made no secret of his lack of understanding of the operation of the components with which he had to deal. That, however, is a matter to be taken into account in assessing the damages. It is my opinion that the respondent is liable to the applicants in respect of each of the three causes of action pleaded - i.e. under s.52 of the Trade Practices Act, for breach of contract and for negligence. liable: (i) (ii) (i121) 15. To be more specific, I hold that the respondent is Under s.52 of the Trade Practices Act, in that it represented that it had the expertise and capacity to design and supply an efficient system, but did not have either, and in that it represented that the system (consisting 1n the selected components) it supplied was such as would meet the applicants' requirements, whereas it was not of that description. In contract, by virtue of the term implied under s.71(2) of the Trade Practices Act in that the system was not reasonably fit for the purpose (made known by the applicants to the respondent) for which 1t was supplied. In negligence, in that, having assumed a relevant duty of care, it negligently failed properly to design the relevant system. I did not understand counsel for the respondent, in the end, to submit that there was no liability; he confined himself to a submission that there was no liability under the Trade Practices Act, but made no such submission with respect to the allegation of negligence. It was contended on behalf of the applicants that in the particular circumstances of the case, it did not matter whether 16. damages were assessed in tort or in contract. Prima facie, in suits brought under s.52 of the Trade Practices Act, the former method is appropriate: Gates v. City Mutual Life Assurance Society Ltd. 63 A.L.R. 600 at p.609. That involves an assessment on the basis of a comparison between the applicant's financial position had he never entered into the transaction, and his position in fact. Here, it appears that I should start from the assumption that if the applicants had not obtained the equipment selected by the respondent, they would have obtained properly-selected equipment which would have worked, and fertilised the plants with reasonable efficiency. In contract, in situations of this sort, the applicants are entitled to be put in that position which they would have occupied had the breach never occurred: Gates' case at p.607. It therefore appears to be correct, aS was submitted, that the measure of damages, in the particular circumstances of this case, 1s the same in tort as in contract. Quantum It is necessary to introduce this subject by referring further to expert evidence. A number of persons claiming relevant biological knowledge were called, principally Messrs. Parnell, Gratte and Hawson. There was also Mr. Burt from the Department of Agriculture. His evidence concerned a theory advanced by the respondent about a substance called Alar, which turned out not to require examination. 17. Mr. Parnell is a botanist, but has not a great deal of experience relevant to tomato-growing on a commercial scale. I derived assistance from his evidence, however, in the general support he gave to the account given by Schepis of his difficulties with the irrigation system. Gratte and Hawson are both government advisers of considerable experience, particularly with reference to vegetable-growing. Gratte saw the property only in 1986, and for the reasons explained above, I am not prepared to allow any damages in respect of that period. However, I have taken Gratte's evidence into account as throwing light upon the standard of management of the property; Gratte's opinion was' that Schepis was a grower of only average ability. Hawson's evidence suggested that the area in which the applicants' farm is located 1s not quite as surtable for tomato growing as land further north. He emphasised the importance of climatic conditions in successful tomato growing. There was other evidence called, from Mr. H.G. Leitch and Mr. L.J. Dickson, dealing with the "early blight" problem in the 1986 year. It seems to me unnecessary to say anything on that topic. There was a considerable volume of evidence directed to the question whether, and if so to what extent, the applicants' losses might be attributed to causes other than the breaches on behalf of the respondent. It is necessary to mention some of the more important of them. . 18. Schepis admitted that his spraying of his plants to discourage diseases would have been more effective if he had had what are called "droppers" fitted to his spray boom. However, in my opinion, that deficiency is not shown to have had any significant effect upon his output in the 1984/85 season. A more important additional cause of the applicants' difficulties, admitted to by Schepis, was the delay in supply of the irrigation system, referred to above. It is my view that part of the applicants' loss is attributable to that cause. Mr. Ainslie, for the respondent, argued that as to the delay and in other respects, the applicants' case was left too vague to enable a_ sufficiently accurate assessment of damages to be made. I do not agree; there 1s no possibility of apportioning the loss among the various causes in an arithmetical way: cf. the remarks of Gibbs J., as his Honour then was, in Ted Brown Quarries Pty. Ltd. v. General Quarries (Gilston) Pty. Ltd. (1977) 16 A.L.R. 23 at p.37. Next, in my view, Schepis failed to take Guest's advice that the main pipe should be buried. That contributed to some of the failures which occurred. The expert evidence shows that the whole system is insecure. Mr. Ainslie argued that the principal problem could have been overcome 1f Schepis had taken Guest's advice to fit a non-return valve, a solution which was ultimately adopted. I am satisfied that there was some fault on the part of Schepis which contributed to parting of joins and bursting of components. However, it seems to me clear that the principal fault was in design, or to be more specific, in specification of ' 19. items of equipment and that may properly be laid at the door of the respondent. Although parting of joins and other hreakages caused interruptions in watering and fertilisation, in my opinion the main problem was that the fertilisation system installed simply did not work, for the reasons mentioned above. Next, Schepis admits that there were blockages in the system fairly early, and in my opinion (although the evidence is not all one way on this point) 1t is likely that they were largely due to accumulation of iron oxide in the area of the fine outlets. Guest, rightly, suggested that a water sample be taken. The problem was correctable and ultimately corrected; no fault is attributable to the respondent in respect of these blockages. Schepis admits, in effect, that he was at fault in failing to supply a 200 litre tank from which the fertiliser was to be pumped. However, there is not reason to think that that fa1rlure caused any significant loss. Next, there is evidence that suggests that a problem contributing to the losses was that Schepis overtaxed the water supply. It is my view that he did not do so, and I accept that there was plenty of water. I now turn to the details of the damages claimed. The principal item is the loss in respect of the 1985/86 season which I have totally excluded. In respect of the 1984/85 season, the applicants claim a loss of $59,737.52. 20. The calculation 1S criticised on a number of grounds. It is said that there were probably some cash sales of tomatoes which were unrecorded. I am satisfied that that is so, but think them likely to have been small in amount. More importantly, Mr. Ainslie argues that a considerable reduction must be made to allow for causes in respect of which the respondent has no legal responsibility, and in particular, the delay in supply of the system. It appears to me that those causes can only be taken into account in a broad way. I am quite satisfied that the principal cause of the loss was the most obvious one, namely that the fertiliser supply system did not work. The next level of dispute about the claim for loss 1s that according to the respondent's case the "gross anticipated income" claimed 1s much too high. That submission relied largely upon the evidence of Mr. F.R. Schoonens, an agronomist employed by the respondent. In my opinion, although there 1s nothing wrong with Mr. Schoonens' arithmetic, there 1s no justification in the evidence for the assumptions on which the calculations are based. I am satisfied that the mode of calculation presented on behalf of the applicants in exhibit 6 1s basically correct, subject to one qualification, namely that 1t is necessary to take into account additional packaging and labour costs, for the reasons set out in the report of Horwath and Horwath dated 17 October 1986. The sum in question in respect of the 1984/85 season is $3,631.28 and the necessity for that adjustment is conceded by the applicants. 21. In my view, a reasonable estimate of the quantum of the applicants' losses as a result of the breaches on the part of the respondent which I have found in respect of the 1984/85 season is $40,000. To that must be added the costs of repairs and modification which do not appear to be challenged, namely $2,589. There was discussion at the hearing as to the impact of taxation upon these losses. It was conceded that as to lost income no adjustment should be made on account of taxation. Counsel for the respondent contended, however, that some adjustment is necessary in respect of the tax advantage (by way of allowable deductions) accruing on account of expenditure on repairs and modifications. In the circumstances of this case, it seems to me that no such adjustment should be made. Interest That leaves for consideration aclairm for interest. Although the amount involved in the interest claim is not very large, the legal point 1s one of some difficulty. The primary foundation on which the claim was put was s.32 of the Western Australian Supreme Court Act 1935-1979, which need not be set out in full; it is so framed as to permit an award of interest up to judgment in actions of this sort brought in the Western Australian Supreme Court. The section, however, applies to "the Court" which is defined as meaning the Supreme Court of Western Australia, s0 that prima facie the section is not available in these proceedings. 22. Under s.32(3) of the same Act, the right to recover interest applies to proceedings in a Local Court except where the sum for which judgment is given does not exceed $750. Under s.34 of the same Act: "The several rules of law enacted and declared by this Act, shall be in force and take effect 1n all courts whatsoever in Western Australia so far as the matters to which such rules were laid shall be respectively cognisable by such courts." It therefore appears that (subject to a limitation where there are proceedings in the Local Court and the judgment does not exceed $750) the power to award such interest as I have mentioned is a general one applying to Western Australian courts. It appears to me that in the end the problem 1s the same as that dealt with in Neilsen v. Hempston Holdings Pty. Ltd. 65 A.L.R. 302 at pp.311, 312. I there discussed a similar Queensland provision applicable to Courts generally in Queensland. Counsel referred me to the reasons of the Full Court in Centrepoint Freeholds Ptv. Ltd. v. T.N. Lucas Pty. Ltd. (1985) 60 A.L.R. 187 at p.198-9 suggesting that the question depends on whether the State statute uses expressions wide enough to apply to the Federal Court. Although I accept the authority of the Centrepoint Freeholds case as to its result, I do not, with respect, agree that the question depends on whether the State statute giving power to award interest uses language wide enough to apply to this Court. When such statutes speak of "all courts" they mean all State courts. In State Bank of New South Wales v. Commonwealth Savings Bank of Australia (1986) 67 A.L.R. 123, a similar problem * 23. was approached on the basis that the question is whether the State law is one "relating to procedure" within the meaning of s.79 of the Judiciary Act. I adhere generally to the view I expressed in Neilsen v. Hempston Holdings Pty. Ltd. (above) at pp.311 and 312: "State statutes picked up by s.79, especially those relating to 'procedure, evidence and the competency of witnesses', must be so drawn as to apply to State courts only and when s.79 makes such statutes binding on 'all courts exercising Federal jurisdiction in that State ...' it must mean to make them binding as if they referred to the latter category of courts." The minor reservation I have is that the expression "must be so drawn" overstates the matter; typically such State statutes will be so drawn as to apply expressly to State courts only, but some such statutes do not mention courts at all. But even where they do not, they set out to regulate procedure in State courts only. It 1s s.79 of the Judiciary Act which makes them applicable here, and where the State law (whether procedural or otherwise) applies to State courts generally, s.79 appears to require that it be treated as binding in proceedings in this Court. I am, therefore, of the view that interest 1s allowable and will allow an additional sum of $8,400 (being at the rate of 12%) under this heading. There will be judgment for the applicants, rounded off ° 24. to $51,000. Costs will be reserved for further consideration. { certify that this and the 23 preceding pages are a true cory of tho reasons for judgment herein of His Honour Mr, Justice Pincus pest Lygone Associate Dated 24 cece. ben 1986