IAC (Leasing) Ltd v Humphrey [1972] HCA 1

High Court of Australia Barwick C.J. McTiernan and Walsh JJ. IAC (Leasing) Ltd v Humphrey [1972] HCA 1

ORDER Appeal allowed with costs. Order of the Supreme Court of Western Australia set aside and in lieu thereof order that judgment in the action be entered for the plaintiff in the sum of $17,852 with costs applicable to the sum of $10,000.

Cur. adv. vult.

1972, Jan. 7 Barwick C.J.

The facts including the relevant parts of the agreement between the parties and the circumstances of this case are fully set out in the reasons for judgment prepared in this appeal by my brother Walsh. I agree with his conclusion that no question of a choice between a penalty or a pre-estimate of damages arises in relation to any of the cll. 4, 6, or 7 of the hiring agreement of 6th December 1967. In my opinion, those clauses involve an attempt to ensure that the initial cost of the tractor and its attachments, plus the appellant's "profit" on its hiring, should be recovered by means of the total rental paid and retained, plus on the appropriate occasion the difference between the estimated depreciated value of the tractor and its attachments and their actual recovered value, whether achieved by sale following redelivery or repossession, or by valuation in cases where in either of those events it was not sold. I have spoken of total rental paid and retained because cl. 7 in the circumstances it covers contemplates credit being given to the respondent, in the event that the actual value of the tractor and its attachments exceeds the estimated depreciated value. This description of the effect of these clauses clearly indicates in my opinion that no question arises whether the obligation to indemnify the appellant is a penalty.

I agree with my brother Walsh's reasons for reaching this conclusion and for the conclusion that the amounts claimed for rent and for repossession charges were recoverable. I agree that judgment should have been given for the amount claimed.