XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd [1985] HCA 12

High Court of Australia Gibbs C.J. Mason, Murphy, Wilson and Brennan JJ. XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd [1985] HCA 12

ORDER Appeal dismissed with costs. Cross-appeal dismissed with costs.

Cur. adv. vult.

The following written judgments were delivered:—

1985, Feb. 28 Gibbs C.J.

In this appeal we are called upon to decide whether judgment was rightly entered for the appellant, XL Petroleum (N.S.W.) Pty. Ltd. ("XL"), in a sum which included exemplary damages and if so whether the Court of Appeal of the Supreme Court of New South Wales was right in reducing the amount of the exemplary damages awarded by the jury.

The appellant, XL, was a company formed in New South Wales in January 1970 for the purpose of engaging in the sale of petrol in that State. An associated company had for some years earlier been engaged in the sale of petrol in Victoria at a discount, i.e. at a price lower than that normally charged by other companies, and XL intended similarly to sell in New South Wales at a discounted price. There was, at 150 Princes Highway, Arncliffe, a piece of land owned since October 1969 by St Christopher Motors Pty. Ltd. which had previously been used as a service station for the sale of the petrol of the respondent, Caltex Oil (Australia) Pty. Ltd. ("Caltex") but which had not been used for that purpose since at least May 1968. XL entered into an agreement with St Christopher Motors Pty. Ltd. under which it acquired full rights of occupancy to the land from 9.00 a.m. on 12 June 1970, and, as the jury found, XL had actual possession of the land on that date.

Three underground tanks, designed to hold petrol, were installed in the land. The tanks had been put in the land by Caltex in about the year 1953. Caltex was a company which engaged in the sale of petrol on a large scale; it had about 800 service stations in New South Wales. Caltex had at no time been the owner of the land in question, and the jury's findings (which were not challenged on this point) negatived a submission made at the trial that the tanks were not fixtures and that Caltex was the owner of them. At about 8.45 a.m. on 12 June 1970 an employee of Caltex telephoned a company, Turnbull & Foster Pty. Ltd., which carried on business as industrial plumbers, and instructed that company to spike the tanks on the land. The instruction was issued under the authority of Mr. Braitling, then the manager for retail sales in New South Wales for Caltex. Mr. Braitling said in evidence that he believed that the tanks were owned by Caltex and that he issued the instruction to render the tanks safe. In consequence of the instruction, Mr. Peter Turnbull, a director of Turnbull & Foster Pty. Ltd., went to the land that morning, between 9.00 and 9.30 a.m. filled the tanks with water and by hammering a steel bar through the dip points made a hole in each tank and then concreted over the dip points. Mr. Sykes, the Managing Director of XL, came on the scene while this was going on but despite his protests the spiking of the tanks was completed. The result was that the tanks were rendered unfit for use until 7 July 1970.