CATCHWORDS TRADE PRACTICES Misleading and deceptive conduct - applicability of s.52 of the Trade Practices Act to statements made in the course of a commercial transaction not involving a "consumer" - claim in the accrued jurisdiction for breach of contract. Interest Power of the Ccurt to order payment of interest up tc judgment prior to the operat s.S1IA cf the Federal Court Act - whether "loss or damage" in 2.82 of the Trade Practices Act may include a component representing 1033 of interest cn moneys not received - whether s.79 of the cCudiciary; Act Operates to pick up s.94 of ths Supreme Court Act 1270 (NSW) and provide a scurce of pcwer tc the Csurt tc order interest up to judgment. Words and Phrases "loss or damage" Trade Practices Act 1374 3.52, 32 Judjciary Act 1903 3.79 Supreme Court Act 1370 'NSW) 3.94 IN THE FEDERAL COURT OF AUSTRATIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION BETWEEN: AND: wm ee No. G.165 of 1986 CORPORATE VENTURES PIY.LTL. Applicant TAN TURNER & PARTNERS PIY.£TD. Respencent MINUTE OF ORDER JUDGE MAKING OSDER Gummow J DATE OF °PDER 3 14 May 1987 WHERE MADE 5 Sydne; THE COURT ORDERS THAT: 1. There be judgment fcr the Applicant in the sum of $12,452.21. a. The Respondent pay the Applicant's ccsts. : Settlament and entry Order 26 of the Federal tl Masters v. Cameron (1954) 931 CLR 253 referred to. Akron Tyre Co.Pty.Ltd. v. Kittson (1951) 82 CLR 477 referred to. Newlands v. Argyll General Insurance Co. Ltd. (1959) 59 SR (NSW) 130 referred to. Trollope and Colls Ltd. v. Atomics Power Construction Ltd. £1963] 1 WLR 333 referred to. e Pty. Ltd. v. Lubidineuse (1985) 59 ALR 234 referred to. Brown v. Riverstone Meat Co.Pty. Ltd. £19851 ATPR 46, 674 referred to. State Bank of New South Wales v. Commonwealth Savings Bank of Australia (1986) 67 ALR 123 applied. Gates v. City Mutual Life Assurance Society (1986) 690 ALJR 239 referred to. Sanrod Fty Ltd v. Dainford (1984) ATPR 45,249 followed. Simonius Vigcher and Co. v. Holt and Thompecn £12379] 2 NSWLR 322 referred tc. Corporate Ventures Pty. Ltd v. Ian Turner and Partners Pty.Ltd. G. 165 of 1986 Gummow J. 14 May 1987 Sydney ivi URT OF AUSTRALIA I 3or <} STR. REGISTRY Pe fa) . Lay . H m ih if) Lal) oy iD co fun) SION ~~ BETWEEN: CORPORATE VENTURES T AND: TAN TUPNER & PARTNERS rri.iTo. Respendent sUMMOW o. 1 May 132? REASCNS FoR CICGMENT In 1964 the applicant carried on business a3 "Bowserc2 Asphalt" and described itzelf as a spacralist in sprayad coatings for varicus industrial purpcezes. The respondent carried on business as managers of con3tructicn prcofects. In one such profect it acted far Durham Cevelocments Pty. Lea., in Desckvale, a suburb cf Sydney. The timetatie for the proj Ct) aQ ct called for completicn in tame for tenant sccupation sn or br cé) Cc tf The dispute between the garties arises sut cf thea angagement cf the applicant by the regpondent fcr 'in the terms & 1, ct r rah) wo bre] ye] t+ Q pa tw rey [ a oO cr ra ow | od ig w io] A. cr fad io " oO ua a a =) fa oct ia a c bs ar '. fu (a G proved cne he Pa of an ac aon q the "supply and fabricat order) "a Me . 1) i s: a " 4" a i) | ' cr oa) uy i) n Ca | Lm) Oo oO st re Mi wo sk a a1 be | ed ly c: fy oo? " aio af 9 t- fa) dA a) au ct gy at Ei) oT On ro mou) wt wd ef 0) Ho J Se ba] 7 ie J . 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PB) a m om nm © ww «1 a vy ed a o wf Ooo rn | ica) ow i ¢& wt mo oo thy s 7 hm rt wat OSS SS om Cc fe +4 © ww ur wv gs Sow # m €F Seow "3 CD DD Wy Oo @ et ww o g Sa " ar ~4 Se ih yp wt 4 wf c a 4 ~ a hm "a mn T) ~ a Wo my sy n vw : a e SG ud ") 3 m a oi] at a 'got On wt vA ej rs) uo vt a t CH } 2] t 40 at ed vi Wy Ln m4 b> BD UV . » woe uw a Fg Ei or ee ns re aa Vv fo] Me gc ww vp D a "9 " ro) "4 My +) 48 nm {! a .S : Me oO 0 w Cc tu ke Cc ' m o ti a a U0 @ & pp NON AH HH w& " *_ O W G ee ee Hf 9 GS ec 44 m gD vt owt m wt Gc " et a i] m " 4s 43 vo Cy) Oo gow o Me od ay » oc A oon o hm Oo o | oo] u ob UU & D 4 Sof Aloe 4) i, in «ee » o m% oO v Ye fe »p 4 WP tH > at ad Cu m ny of et be fa} cB) be | fey ra) oO " wy a wh ng G ~4 sd wo ag CU «4 in 4 & w oom ta " c o FH gy ot) « re t, oat OR Wr Foster waz in 1984 a project manager empleyed by the respondent and one of his tasks was te cbtain tendars far the spraying of the ceiling in the warehouse of the Brcokvale project. Fire proofing reduces insurance rates, hence the azgpressions "fire rated" and "fire retardant rating". The veference in the quotaticn and purchase order to Ordinance 70 is to lecal government requirements and any successful tender would require approval by the lscal Cosunci:. Te was 'che gractice of the applicant, cn zomeé occasionz, ts qucte Erices Coe lump gum contracts after phone salis and withcut making its own méasurement2. Sy; 31 January 1984 Mr Foster had, as h2 agreed in aviaence, something of 2 time crizizg on his hands ag regards Chis particular aspect of the project. The Tcuncil had just veafused approval under Crdinance 760 to an earlier tender by another business. The project had to be completed by the end of March. & waz in chig getting chat on 21 January 1984 ke elephconed the applicant and ezpoke co Mr Cook, the <cperatiscns reputation for spraying the type of firs retardant material he Ssught. Mr Poster tcld Mr Cock there was an urgent job t> be The accsunts of chat télephsne call and the subsequent 4. significantly. However, both agrse that Mr Foster mentioned 1SS52 3aq.m3z. to Mr Cook and said he should go to Brcokvale to look at the job. Mr Cook says he was told 1552 sq.ms waz the area in the course of Mr Foster stressing the need for an urgent price for what he said to Mr Cook would be a "goed jab". Mr Cook understood a lump sum quotation was what was scught. The sice of the job made it attractive ti Mr Cosel and it i2 a fais inference that Mr Foster appreciated this weuli ba zo ani linked it ts the urgency, fcom hia point sf view, in gatring 4a ffuca3. "Mr Foster 3ays that just before Mr Ccock lLlafc the office on l FPebruary Mr Cock asked whether ha csuld tell him "approzimately what 'che figure was". Me Foster says he understced what Mr Cook sought was the figure "relating to area". My Foster asaya he checked a document and then said ts Mr Cock that the "approximate area of the ceiling waz 1552 mécre3 squared". The term "approximate area" 4:3 nst ageear in A - a -" - 1. - -s = she evidence of Mr Cssk sn matteas?: in which there i3 ceirflocte - ag an os hk % - ~ ct : - =: o- SY SLSEParity xcetween Tham. Me Cack waz the mir2 imeressive watnes3 both in his demegancur in the witnez2 tex and in thes atcength and ccogency cf Als acccunt cf what happanedi. Further, "gy Tock'3 account ia consiztent with game contemporanicus On 2 February, according ts Mr Cook, he and a fellow officer of the applicant, Mr Fryer, (now dead) were dizcussing the preparation of a quotation. In order to proceed it was necessary to have the exact area. Mr Cock jotted various possibilities on notepaper, including "1404", 1629" and "i553", Neither he nor Mr Fryer (who had inspected the project arawings at the respondent's office on the afternson <«f 1 February: - - id bea confident which + oO io as correct. "My Cook talernonsi Mr Fester and asked him what was "the exact area". Mr Foster said "Just a moment, I will gs and have a look". Evidence 'éndersd by the respondant shows there to have baen at the North 'Tydineay n office a "Construction Estimate" on page 37 st whith, 1 respect of a ceiling specification, 1553 sq.mz. appears. Mr Feater came back to the telephone and said ""1S52". The conversation ended with Mr Foster stressing the extreme urgency of providing him with a quotation. On 1 March 1984, or shortly thereaftar, Me Peyer made cut, as waa his practice, a "quote cari" showing the cefling ar2a az L552 sq.ms. have cccurred ha hac "absolutely nec vacall" cE such a zonversaticon. 32 I nave indicated, I accept the actcunt of M Cook. My Cock did omnot make any independent measurements bkefcre the applicant tsok the next zter. Cn 2 February 13 ae) Hq 6. the applicant wrote to the respondent with a quotation of 290,970.00 for the ceiling system on the stated basis that th area was "the whole of the roof area up to but not tncluding box gutters on two sides and to the raked eaves beams cn tow (aig) sides". The respondent sent the applicant 'first 32 pPurchagzge crder dated 7 February 1984 and gzecondly, san 3 Fabruary, a printed centract under caver cf a letter which included tha following: "Kindly mote that any work commenced by fou, bafsre the aforesaid aigning, is adcecne solely upon the terms and conditiong csntained in the decrument; referred to above and ghali be deemed tr 53 an accegptance of the tarms and ccnditicns cf the Contract which will, therefcrs, te binding 'tetween us, notwithstanding lack of farmal ezecuticn Progress claims or payment2 on account 3hali not become due or payable until after the orrginal Contract i3 signed and raturned to this orifice." The receipt of the purchase order had been preceded by a ow alephone call from Mr Foster to Mr Cock on 7 Fabruary to ths wo ry on tt vi t that the applicant nad 'he jcb and he ahsuli gc ahead subract to the Council giving its agpraval. That approval was aul> forthcoming. For part cof the work, 'the applicant angageli rr) Sus-contractor, E.A. Bailey and Seng Pty.Lt2. It -cfeommencsed Wor. on 23 Pebruary and the applicant aid ge cn 2 March. w my bie] rs a w be] ct rey bed wt i rh La) be] s io Qa wD rv) ' iD fu rT vas onot until 27) March tha- the respcendent wrote accerting amendments made by che app-icant. The terms of the amendments are of no immediate soncern. The document bears the date 7 February, the date of the purchase order. There was no apecificaticn of the measurement of the area of the ceiling in the quotation purchase order, or printed contract. The printed contract also obliged the respondent to supply electricity for the applicant's operations and to bear the cost of so doing. a refer tc thiz aspect of the case later in these reasons. Io should add that in my view the dssratcn cf the quctaticn followed by the purchase ordar produced a contract at that stage, being a contract in the seccnd category described in Master3 v. Cameron (1954) 91 CLR 252 at 269-251. That being so, it is not necessary, at least for the purposes of this case, to determine the legal effect of the "Eack-dating" of the printed contract ¢t oO sd ae it) oCc fu Gel Md {see Akron Tyre Co.Pty.Ltd v. K on 951) 82 CLR 477 at 498; MNewlards v. Argyll General Insce.Co.Lta C€19591 SR (NSW) 129; Trolicss and Csiis Lea. v. Atomic Power Constructicn 263. €1953] 1 WER The work was completed by the and cf March. iy mid-March it was apparent to Mr Cock that materials were be conzumed at a greater rate in the spraying cperaticns 'han would have been expected if the area was az he believed it 'to tr @. AL a mesting cn site on 1S March, in the Bweee whe discussing other matters, Mr Cook pointed this cut to Mr "y Mr Coulter, another officer of the reapendent was Cs a ct — & ey 8. present. So was the respondent'3s construction foreman, Mr Knudsen. All four gave evidence of what tock place. All agreed that Mr Cook raigzed the issue of the area, that Mr Coulter or Mr Foster or both, indicated the matter should be looked into and if 3ubstantiated 67 measurement cf the area gzomething would be done. But there were differences in emphasis. Mr Cook in his evidence said the continuing urgency cf the completion was atressed to him. The respondent 3 witnes323 on thatr part gaid any a3surances tc Mr Cook wers snily in terms of looking into the rrovisicns of the contract. It waz after thia meeting that the terms of whe contract were th inally setclad. The claims by the applicant tc remuneration for wor's acne in respect of the area additicnal tc 1552 gq.ms. was refused by the respondent on the footing that the ccntrasct called for a lump sum payment in respect of the ar2a, whatever 03 measurement. The applicant aubmits, and =I assept Mr Sock = evidence, that the quotation of <- February was prepared in reliance on Mr Fester's statements tz Mr Cask 'an tna form I have fcund) sm 31 March and 1 February, that the area was 1552 Ce Ld ¢] h ts rey et oa oO re) a tr be da ' a oO fe] cr rs rey {a cw a Le] w be fa ie) 3] Me] tw me iv]wr ' t ri) (a Go a <i 1D s a w ct ++. Ca be] on site on 15 March, even if the versions of the respendent's witnesses be accepted, would have been consistent with the retention by Mr Cook of the belief that the measurement of the area to which the written form of contract applied was to be identified as that measurement told him by Mr Foster Lefore the quotation was issued. I accept Mr Cook's denial that the J applicant submitted the quctation on 2 February after deciiing to take the risk that the area was 15523 3q.ms. I alsc accere the submiszions that Mr Foster's statements as to the area were more than expressions of opinion and that My Cock acted upon them reasonably and understandably. Accordingly, subject to consideration of further arguments by the respondent as to the construction 2f 2.52, the applicant has made out its case of contravention cf that section by the respondent. The present case illustrates the creraticn of 5.52 in going iisectly to the practical realities cf commerzial lifts. Had the ecresent case fallen for iectaion pursly under the general iaw it may have turned on complex legal questions cf innocent or negligent misrepresentatizcn, yrectificaticn and 10. The respondent submitted that even if the facts be as T have now found them, 3.52 had neo application to this case. It was submitted that Mr Foster did not address himself to any class of consumers but merely toa tenderer who wished to be the provider of materials and services. It i3 true that conduct falling within 3.52 frequently occurs when gtataments are made by 2 corporaticn tc member2 of the public but that dces not mean 3.52 is sonfinad to g3tatements directed to the public cy some identifiable gection of it and cannot apply tS a ccommercial tsansacticn (whether or mot of a recurrent character)not involving a "sonsumer": Bevanere Pty.Ltd v. Lubidtreuge (19385) $3 ALR 234 at 341; Brown v. zZ 5 Meat -Ft7.L6d C1985] ATPR 415, 674 at 46,680. I conclude that there nas been contraventicn sf 2. a This waz brought in the accrued jurisdiction. The applicant under the printed contract, claimed 3638.75 in <saspect if Batra hours worked az a rezult of loss of pewer respondent'3 centractual obligati o ra] jw ts nm seep up the alectricity aupely. 32 uf trangpiced at the hearing, the only real tz3ue laft cn this pact sof the case wa Lb) x a aw eal o Lay at tr o a ~ » eB i=] a He a Cc f fa tr o t oy LS ro er o fu be. rs) 6% ob roy bs 4] wv a cr 8) ih re) aa a'S re) a] aoct ll. representing the extra work done by the 3ub-contractor. The zub-~contractor claimed from the applicant $252 in respect of 3 men working 1 hour each at $23 per hour, and the applicant marked this up to $345 by claiming from the respondent 10 man hours at $24.50 per hour. I accept the submission of the respondent that the liability for the mark-up does not fall upon it. The result is that the applicant succeeds cn "his claim in the gum of $545.75. There remains the questicr of interest 1n respect of the period up to judgment. Tnizg waz not the subject if detailed submissions by ccunsel, a matter for regret becauze the matter i3 not an easy cne. First as to the powerz cf the Court. Section S14 of the Federal Court of Australia Act (which would otherwise meet the case) cnly applies on its terms in respect cf causes of action arizing after that proviaion came ints force: State Bank ¢ tlew South Wales v. Sommonweaith Savings Bank sf Australia (1936) 7 ALR 123 at 124. Th cauges of actic invclved here had both arisen by May 1294 when the applicant QOctsber 1984 (see 3,2(1)). Zectisn SlA thus i132 of no Therefore, in respect of the claim under Part 7 of the Trade Practices Act, I turn to 3.82 thereof. This provides, for recovery of the amount of the "loss cr damage" auffered by the applicant ""ny" the conduct in question. The phrase 1s "loss or damage" and it ts not to be read as necessarily limited to these integers of pecuniary remedy known to the common law as "damages", whether in contrast cr tart. After all, 1f one thing i2 clear from a reading of Pars Zor the Act, in its ariginal and particularly in itz currsnct scrm, it 13 that it beth qualifies and szpands ganera vemedias (as in 3.80) and intreduc22 new remedies az oin 2.37). Thera is thus no readily apparent 2etting in «hich to read down the ezpression "loss or damage" in 3.82, although nz doubt in a broad sense common law analogias may be of suidanca in particular cases (Gates v. tz Mutual jfe Azsuranse Scetety Led. (1986) 60 ALJR 239 at 242-244). In mp view, in the present caz2 the loss auffered by the contravention cf $.52 includes net cnly the Money representing the fair value of the additional week perfcrmes zut also the loss suffered up te judgmant in respact cf the wiavailability of that money for investment .2f Zansc 7. Rainford (1984) STPR 45,349 at 45,2541 Thi 213° «0 ' + t t a 4 - aachough, as the autheritiag in Australia presenti; stand in state courts, a claim at csmmon law fcr lost interest of this The question arises whether 3.79 of the Judiciary Act operates to pick up 8.94 of the Supreme Court Act 1970 (NSW) and 30 provides a further scurce of power. I would adopt the reasoning of Lockhart J. on this point in State Bank sf New south Wales v. mmonwealth Savings Bank of Australia (1996) 67 ALR 122 and thus follow hiz Honour's dacision that 3.94 cf the 'lew South Wales Ast does not apply, by dint of 3.79 if the Judiciary Act, to proceedings in this Court. The claim in the accrued jurisdiction, insofar as 1% gesk2 interest up to judgment, cannot, az I have indicated, te zupported under the common law as presently revealed by the authorities. Nor, for the above reasons, does 3.51A cf the Federal Court of Australia Act supply a scurce of power. The consequence is that an interest component may be awarded only on the trade practices claim. In their submissions, bcch parties ascertead 15% se annum a3 the appropriate rate if I held interest up 1 judgment shculi be awardad. Interest should be calculatad from 1 Maz 19394. By that dats the applicant had made its tlaim for the additional work and the ts ig wa 'S oO ba p nmat Gct '3 fo fal fa fu wi wrcta rejecting it. 14. In the result the applicant should have its co3t3 and judgment for that sum which comprises $8658.75 plus interest on $8331 at 15% per annum from 1 May 1384 until today. The exhibits may be returned. I cartify that thiz and the thirteen (12) preceding pages are a true copy of the Reasonz for Judgment of his Honour Mr Justice Cummow. Associate: Mark and Date: /# May, 1987 Counsel and Solicitors for Mr J.K. O'Reilly Applicant: instructed b7 Messrs Dawson & Waldrcn Csoungzel and Solicitsrs for Me J. Walssn the Respondent: inztructed 7 Maszrs Blaszingtsn Judd & Cs. Date cf Haaring: % and © May 1997 Late cf Judgment: 14 May i987 wo ape Oy ~ _ IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION NO. WAG 114 of 1986 BETWEE N: BOND CORPORATION PTY LID APPLICANT and THIESS CONTRACTOPS PTY LTD First Respondent and OVE ARUP PTY LTD, ARUP PARTNERS PTY LTD and OVE ARUP CONSULTANTS PTY LTD Second Respondents MINUTE OF ORDER JUDGE MAKING ORDER: FRENCH J. DATE OF ORDER: 1 MAY 1987 WHERE MADE: Perth THE COURT ORDERS THAT: 1. The second respondents' motion 1s dismissed. 2. The second respondents are to pay the applicant's costs of the motion. Note: Settlement and entry of orders 1s dealt with in Order 26 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION wee vw NO. WAG 114 of 1986 BETWEEN: BOND CORPORATION PTY LTD APPLICANT and THIESS CONTRACTORS PTY LTD First Respondent and OVE ARUP PTY LTD, ARUP PARTNERS PTY LID and OVE ARUP CONSULTANTS PTY LTD Second Respondents CORAM: French J. 1 May 1987 REASONS FOR JUDGMENT For the fourth time in this litigation the applicant's pleading 1s under attack. The second respondents, who succeeded in having parts of the statement of claim struck out on 17 March have now returned to the fray against the amended statement of claim filed following orders made on their previous motion. The first order they seek 1s that paras.49 to 55 be struck out as disclosing no reasonable cause of action. 2. Paragraph 49 alleges some 6 representations said to have been made to the applicant by the second respondents 1n order to induce the applicant to enter an aqreement with the second respondents that they would act as its consulting and supervising engineers for the development of a residential subdivision at Brigadoon. The representations related to the experience, expertise and ability of the second respondents in various' respects including representations that:- "(d) 1t was able to provide accurate estimates of the cost of sub-dividing Brigadoon into a residential subdivision; (e} 2t would be able to provide to Bond accurate estimates of the cost of sub-dividing Brigadoon and of carrving out the Works." The representations, it is said, were made in trade and commerce (para.50) and induced the applicant to retain the second respondents as its consulting and supervising engineers for the development of Brigadoon. (para.51l). It is also alleged in para.51 that the applicant was induced to undertake the development of Brigadoon i1n_ the expectation that the cost of the development would be approximately as estimated by the second respondents from time to time before the formation of 1ts agreement with the first respondent for carrying out the Works. (para.52) 3. The representations are said to have been and deceptive conduct.(para.53) Paragraph 54 pleads:- "In reliance on such representations Bond acted on the advice of Ove Arup and 1s developing Brigadoon but the cost of doing (sic) 1s likely to exceed $15,561,000 which sum 1s far more than any of the Estimates and in false and the making of them to have constituted misleading particular more than the estimate of approximately $10,091,700 given by Ove Arup to Bond in 1985 immediately before the Agreement." By reason of "the matters aforesaid" the applicant claims to have suffered loss and damage which is particularised in para.55 of the statement of claim as follows:- "(1) Had Bond known, as was the fact, that the (2) (3) sub-division of Brigadoon would cost in excess of $15,000,000 Bond would not have undertaken such development. Bond has lost the profit 1t would have made on the sale of sub-divided lots had the cost of development been $10,091,700, together with interest on such lost profit. A schedule is being prepared setting out the amount of such loss and the method of calculation. " The second respondents submit that:- There is no pleaded causal relationship between the falsity of the first 4 of the 6 representations alleged and the damage suffered. 4. 2. There 1S no plea that the estimate of $10,091,700 was not an accurate estimate at the time and in the circumstances in which it was made. 3. There is no plea that the estimate of $10,091,700 induced the applicant to enter into the agreement with the first respondent for the construction of the Works. The applicant's response 1s that paras.49-55 plead a complete cause of action. They allege, 1t 1s said, the relevant contravention, inducement and loss. There can be it 1S submitted, no basis for seeking to strike them out as disclosing no cause of action. As to the first submission by the second respondents, the applicant pleads in paragraph 54 that acting 1n reliance upon "such representations" they acted on the advice of the second respondents and are developing Brigadoon. The assertion so made 1s sufficient to link, as a matter of pleading, all the representations to the applicant's subsequent conduct. It is true that the applicant does not allege the 1naccuracy of the estimate of $10,091,700 referred to in para.54. I think however 1t 1S clear enough that the case 1s that that estimate and all estimates which had been offered were considerably exceeded by the actual cost. 5. It is also true that the statement of claim does not plead reliance by the applicant upon the estimate of $10,091,700 Or any particular estimate. It does not however, thereby leave such a gap in the causal chain from representation to loss that 1t can be said to not disclose a cause of action. The causal chain is in this case adequately completed by the pleading 1n para.55. I do not consider that this group of paragraphs stands as a model of clarity. However it 1s sufficient to withstand the challenge mounted by the second respondents. The motion goes on to attack paras.66 and 67 of the amended statement of claim ard seeks to have them also struck out on the basis that they disclose no reasonable cause of action. Paragraph 63 of the amended statement of claim alleges, 1n respect of the agreement made between the applicant and the second respondents (the OA Agreement) :- + wane "It was a term of the OA Agreement that Ove Arup would exercise reasonable skill and Judgment in the performance of its duties as Bond's consulting and supervising engineer in respect of the Works." Paragraph 64 alleges that the term pleaded in para.63 was breached by the second respondents and sets out extensive particulars of the alleged breach. Paragraph 65 alleges that the applicant has suffered loss and damage as a result of such breaches. 6. Paragraph 66 then goes on:- "Purther, and in the alternative, in further breach of the said term of the OA Agreement Ove Arup did not exercise reasonable care, skill and judgment in estimating the total cost to Bond of sub-dividing the whole of Brigadoon and stage 1 of such sub-division. PARTICULARS On 6 November 1984 Ove Arup advised Bond that the cost of complete sub-division would be $7,692,200 and the cost of stage 1 would be $3,850,00. On 11 November 1985 Ove Arup advised that the cost of the complete sub-division would be $15,561,000 and the cost of stage 1 would be $6,307,000. The first estimates were so unrealistic that a competent engineer acting reasonable (sic) could not have reached them." As a consequence of the breach damage 1s alleged in paragraph 67:- "By reason of such breach by Ove Arup of the OA Agreement Bond has suffered loss and damage. PARTICULARS Bond repeats the particulars give under paragraph 55 hereof." The second respondents contend in relation to paras.66 and 67 that there is no plea that as a result of the alleged advice tendered on 6 November 1984, the applicant took any action at all. Further, it 1s said the plea is inconsistent with the reference to later estimates particularly that of $10,091,700 which appear earlier in the amended statement of claim. ware ome ea em 7. In my opinion however the relevant material facts are pleaded and the difficulty, if there be one, lies in_ the particulars set out in para.66. I will not therefore accede to the motion to strike out these paragraphs on the basis that they disclose no reasonable cause of action. The motion also seeks to strike out paras. 71, 72 and 73 as disclosing no reasonable cause of action. Paragraph 71 1s a plea in the alternative that the second respondents were under a duty to the applicant to exercise reasonable care, skill and judgment in and about providing to the applicant estimates of the likely cost of sub-dividing the whole of Brigadoon and stage 1 of such sub-division. Paragraph 72 alleges a breach of that duty = and particularises it as follows:- "Ove Arup by itself, its servants and agents was negligent in that 1t:- (a) failed to assess the cost of the works accurately; (b) Bond will rely upon the maxim "res ipsa loquitor" (sic)." In para.73 the applicant pleads that by reason of the second respondents' negligence it has suffered loss and damage and repeats the particulars under para.55. eee - one OO meee a enthe. hy 8. As to paragraphs 71 to 73 the thrust of the second respondents' complaint is that in the construction industry there Inay be many explanations for discrepancies between estimates and final cost which have nothing to do with the negligence on the part of the estimator. That may well be so, and the applicant's rather inelegant plea of res ipsa loguitur may well fail. Such prognosis however affords no basis for striking out these paragraphs. In conclusion therefore, the motion insofar as 1t seeks to strike out parts of the amended statement of claim will be dismissed. The question of particulars raised by the motion is a matter that will be dealt with at the next directions hearing on 8 May. These reasons should not_ be taken as aéecurial endorsement of the amended statement of claim. It is I think, open to the criticism that it 1s not a model of clarity. Behind the high threshold erected by such decisions as Dey v Victorian Railways Commissioner (1948) 78 CLR 62, all manner of imperfection may lurk invulnerable to attack of the kind brought by the second respondents' motion. 9. In a case such as the present, clearest definition of the 1ssues 1s Of importance to 1ts proper conduct and that I think 1s a matter which ought to be addressed by the applicant in considering whether to take advantage of the general leave to amend which I allowed it on 29 April in the orders made on the first respondent's motion. I hereby certify that this and the preceding eight (8) pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justice French. nssocrare: L/S Abo fener tr. Date: / May 198 7. Counsel: « for the applicant: Mr K. Archer and Mr B. Luscombe instructed by Robinson Cox -for the second respondents: Mr L.E. James instructed by Kott Gunning Date of Hearing: 30 April 1987 Date of Judgment: 1 May 1987 NOT FOR GENERAL DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G228 of 1987 ) GENERAL DIVISION ) BETWEEN: JOHN JOSEPH MOSTYN Applicant AND: THE DEPUTY COMMISSIONER OF TAXATION Respondent MINUTES OF ORDER Judge making order: Beaumont, J. Date order made: 28 May 1987 Where made: Sydney THE COURT ORDERS: 1. Application stood over generally with liberty to restore on seven days' notice. 2. Costs reserved. Note: Settlement and entry of orders is dealt with Order 36 of the Federal Court Rules. o> aoc y 3lF aa count 0! \ FEE ERALIA on, PRINCIPAL IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G228 of 1986 ) GENERAL DIVISION ) BETWEEN: JOHN JOSEPH MOSTYN Applicant AND: THE DEPUTY COMMISSIONER OF TAXATION Respondent CORAM: Beaumont, J. DATED: 28 May 1987 REASONS FOR JUDGMENT The background of this matter appears in the reasons for judgment in proceedings between the parties No. G.414 of 1986. In these proceedings, the prosecutor seeks orders by way of judici1al review pursuant to the provisions of s.39B(1) of the Judiciary Act 1903 (see p.8 of those reasons). Sch 1 of the Judicial Review Act exempts certain decisions from review under that statute but there 1s no such limitation on the jurisdiction conferred on the Court by s.39B(1) of the Judiciary Act (see Mahoney v. Singh-Dillon, Full Federal Court, unreported, 19 February 1987). Having found against the respondent on his objection to jurisdiction in the other proceedings, 1t 1S unnecessary that I deal further with this application. I propose to stand the 2. proceedings over generally but reserve liberty to restore should restoration to the list become necessary. Costs will be reserved. I certify that this and the preceding Cw (/) page are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Beaumont. Associate Dated: 28 May 1987