New South Wales District Court CITATION: Suttram Pty Limited v S & A Cooke Pty Limited and Michelin Australia Pty Limited [2009] NSWDC 119 This decision has been amended. Please see the end of the judgment for a list of the amendments. JUDGMENT DATE: 21 May 2009 JURISDICTION: District Court of New South Wales JUDGMENT OF: Cogswell SC DCJ DECISION: The plaintiff's claim and reliance on Part 5A of the Trade Practices Act must fail. CATCHWORDS: CIVIL LAW - Judgment - damages claim - loss of income - inconsistent statements - witness credibility - expert evidence - independent witnesses - whether a manufacturer - duty of care of manufacturer - duty of care of importer or distributor - causation - contributory negligence - applicability of Trade Practices Act provisions LEGISLATION CITED: Trade Practices Act 1974 (Cth) s 74A s 74B s 74D s 74J Civil Procedure Act 2005 s 100 Donoghue v Stevenson [1932] AC 562 Grant v Australian Knitting Mills Ltd (1935) 54 CLR 49 Laundess v Laundess (1994) Aust Torts Rep 81-316 Laws v GWS Machinery Pty Limited (2007) 209 FLR 53 CASES CITED: March v E & MH Stramare Pty Limited (1991) 171 CLR 506 McPherson's Ltd v Eaton (2005) 65 NSWLR 1987 Minchillo v Ford Motor Company of Australia Limited [1995] 2 VR 594 Nguyen v Cosmopolitan Homes [2008] NSWCA 246 Thompson v Johnson & Johnson Pty Limited [1991] 2 VR 449 PARTIES: Suttram Pty Limited Michelin Australia Pty Limited FILE NUMBER(S): 4530/06 COUNSEL: Mr Sharpe (plaintiff) Mr Vincent (2nd defendant) JUDGMENT 1. The plaintiff has sued the second defendant for damages. The damages it claims resulted from an accident. The accident occurred on 16 February 2002. It was an accident involving a prime mover and a trailer running off the road. The prime mover and trailer were damaged and the plaintiff - which operates the prime mover and trailer - claims that it suffered a loss of income whilst the prime mover and trailer were off the road. 2. The second defendant admits that it was an importer or distributor of certain tyres on the truck (which term I will use to refer to the prime mover and trailer collectively). The plaintiff asserts that the accident was the result of one of the tyres being defective. The second defendant denies that it was the manufacturer of the tyre. 3. There are three principal issues which arise and which need to be determined first. One is, what happened in the accident. The second is, was the tyre defective. The third is, did the second defendant manufacture the tyre. 4. What happened in the accident was described by Mr Ross Weatherburn, who was driving the truck at the time. Mr Ross Weatherburn was a director of the plaintiff. It was a Saturday night on 16 February 2002. Mr Weatherburn was driving his truck along the Hume Highway. He was driving north and was near Gundagai. He said the road was wet. If it was raining at all, it was very light rain and he was travelling in the kerbside lane. He was approaching a slight right-hand curve when about halfway around the curve the truck started going off to the left. He described it as "drifting off to the left". It went into the breakdown lane and he thought that there appeared to be no reason for the truck behaving in that way. He tried to correct it by steering it back further to the right, but it locked. When he tried to correct it, it bit and jerked to the right, then went to the left and kept going. He described the truck as not responding to the steering as he would normally expect it to do. 5. When asked by the plaintiff's counsel, Mr Sharpe, whether there was a term or expression he could use to describe what it was like, he answered "I'd say you just call it jiggling". Jiggling feels like the truck is still attached to the wheels but the wheels are not responding to what the driver is doing. The truck ended up with the trailer facing the same direction as the prime mover, described by Mr Weatherburn as like a closed up pocket knife. 6. He got out and inspected the tyres and he said that there was nothing visibly wrong with the tyres at that time. Police were called, an ambulance was called and the RTA inspector was called. The truck was eventually cleared to be towed away and was towed by a tow truck operator, Mr Woodbury, to a nearby service station and then on to Wagga Wagga. 7. Some days later, on 21 February 2002, Mr Weatherburn went to the truck repair business where the truck was located and inspected the truck. He noticed one of the steer tyres had been taken off the truck and was, as he described "completely devoid of its tread". He said that the rubber had gone and one could see the steel belts exposed. 8. Mr Vincent, who appears for the second defendant, on behalf of his client launched a substantial attack on the account of the accident given by Mr Weatherburn. One of his fundamental points was that there were two statements made by Mr Weatherburn not long after the accident. They became exhibits 1 and 2. One was a statement made at the scene to the police. The other was a claim form filled in for the insurer of the truck and dated 18 February 2002. 9. The focus of Mr Vincent's attack was that neither document mentioned jiggling. It will become apparent that the sensation which Mr Weatherburn described as jiggling is very important for the plaintiff to establish in its case on liability. Mr Vincent argued that the two early statements were the closest in time to the accident and therefore the most reliable accounts. He argued that it is not believable or acceptable that Mr Weatherburn, an experienced truck driver and familiar with the term jiggling, would omit to tell both the police and the insurer about his experience of that phenomenon before the accident. The only explanation Mr Vincent argues is that the jiggling did not occur. 10. The fact that the two early statements did not mention jiggling was appropriately explored by Mr Vincent in cross-examination. To the extent that Mr Weatherburn claimed that jiggling did occur and that the accident was the result of jiggling and not his own fault, Mr Vincent on behalf of his client says that I should reject Mr Weatherburn's evidence as untruthful. 11. Mr Vincent articulates his reasons for rejecting the evidence of Mr Weatherburn. He advances five reasons. Briefly they are, first that Mr Weatherburn has given inconsistent accounts of the accident; second that his own evidence before me is internally inconsistent; thirdly that he was evasive as a witness and resiled from positions when it became apparent that they were unfavourable to him; fourthly, that his account of the events was implausible and fifthly that his recollection regarding the jiggling only occurred after seeing the tyre at the repairer. It is necessary for me to address in this judgment Mr Vincent's challenge to Mr Weatherburn's account in order to determine his reliability as a witness and the reliability of the account of the accident given by him. 12. Mr Vincent's first point was the inconsistent accounts given over time by Mr Weatherburn. It is fair to say that the main point which he developed is that there was no mention of jiggling in either of the statements given to the police or the insurer. There was mention in statements significantly later in time of steering difficulties and jiggling. 13. Mr Vincent cross-examined Mr Weatherburn on his failure to mention jiggling in either the police statement or in the insurance claim form. So far as the police statement is concerned, it is important to appreciate the circumstances in which Mr Weatherburn gave his statement to the police. Those circumstances emerged in cross-examination. First, it should be observed that in evidence-in-chief, Mr Weatherburn described his personal experience during the accident as thinking that he was "going to roll over and I thought I was going to die". In cross-examination, he acknowledged that he had "had a chat with the police". He said that he was not present when the police statement - which as I said is exhibit 1 and signed in the police notebook by Mr Weatherburn - was written. In fact it was given to him when he was sitting in the ambulance. Whilst he was sitting in the ambulance, the notebook was given to him and someone said "Is that right?". He responded "Yes". At that stage he described himself as ready to go home, which is "all I wanted to do". He described his attitude as "Let's get this finished and let's get home. Let's get out of here". He described the statement which comprises exhibit 1 as appearing to be an over simplification of what he had said. It was in that context that he said that he was not there when it was written. He said that it was not a complete account of what he told the police and that his conversation with the police went on for far longer than it takes to read the police statement. He also said that he was very shaken at the time of the accident. 14. For my part, I regard the circumstances which I have described in which the police took an account from Mr Weatherburn as not detracting from his reliability as a witness on account of the omission of a reference to jiggling. His recent experience, his personal feelings at the time, the fact that he was in an ambulance and wanting to go home, would all contribute in my opinion to him checking the account given to the police in a cursory fashion. His mind was obviously focussed on his recent experience, which he described as life threatening, and his desire to get home rather than whether some detail of the account was present or absent in the police statement. 15. Turning to the insurance claim form, the form was not all of his handwriting. Indeed Mr Weatherburn did not recall filling in the claim form at all. He read it and adopted it but does not recall who filled it in. When it was put to him squarely by Mr Vincent that the claim form contained no reference to jiggling Mr Weatherburn's response was that there were only three lines to write on. When it was put to him that he did not see fit to include the reference to jiggling when he signed the statement he said that he did not see fit because "the accident had happened, that was it. The object was to get the truck repaired and back on the road as quick as we could". Once again it seems to me that the circumstances of the adoption of the claim form with, by that stage, his focus on getting his truck back on the road satisfactorily explains in my opinion the absence of the reference to jiggling. 16. I move now to Mr Vincent's second attack on Mr Weatherburn's credibility: that he had given inconsistent accounts in his own evidence of details about the accident. The focus of that attack was on an estimate of whether the jiggling lasted for four or five seconds or whether the whole accident lasted four or five seconds. When asked by Mr Vincent whether the jiggling continued for four or five seconds Mr Weatherburn responded "that's also I said a guess. Time - when something is happening like that, time tends to go to slow motion". He added that one doesn't really know how long it takes. Mr Vincent picked up that Mr Weatherburn's evidence had been consistent at another time with the whole accident lasting four or five seconds and put that to him. His response was "at a guess, yeah. Like I said before, I don't have a stopwatch on. I would guess that that's the time it would have taken". He added somewhat sarcastically that he did not look at his watch halfway through the accident. Another time he said that so far as the time is concerned it is hard to tell or "very hard to tell when things are happening and you know, it all seems to be in slow motion, but then maybe it's not, you know". 17. Mr Vincent also emphasised the fact that there was evidence from Mr Weatherburn that the truck drifted to the left followed by the jiggling commencing as well as evidence that the drifting and the jiggling occurred at the same time. 18. I, for my part, accept Mr Weatherburn's description or rather account of his explanation as to why his estimates of time or the exact detail of what may have occurred may have changed or been inaccurate. I accept his account because he was experiencing a major distracting event. Indeed as I have said he regarded it as a life threatening event at the time. His answers given about the difficulty in time estimates and the appearance of events moving in slow motion and not being able to time them accords in my opinion with common sense and common experience of life. I do not regard that basis as adequate for rejecting his account. 19. Mr Vincent's third challenge to Mr Weatherburn's credibility is that he was evasive and sought to resile from unfavourable evidence. Mr Vincent highlighted evidence from Mr Weatherburn that he possibly did not mention the word 'jiggling' to the police but he later acknowledged that he did tell the police about jiggling. The answers which he gave about possibly not mentioning jiggling included that at the time he was being asked "a lot of questions by a lot of people. I don't know whether I told them that or what happened". When it was put to him that he did not remember whether or not he told the police that there was jiggling his response was "something happened that I lost control", acknowledging that he possibly did not mention the word 'jiggling'. When pressed whether he mentioned it or not he said "I don't know". 20. Mr Vincent then returned to the topic later on with this series of questions: "Q. And the fact of the matter is that you didn't tell the police about any jiggling or steering problems, did you? A. That's not true. Q. Because at the time it hadn't crossed your mind, had it? A. Of course it had crossed my mind. I was trying to discover the cause of it. Q. I'm talking about at the time of the accident on the 16th--? A. At the time. Q. --of February you didn't tell the police about any jiggling? A. I did tell the police about jiggling. Q. Because you only thought about jiggling after you saw the (a) stripped tyre at Wales on 21 February? A. Totally incorrect". The reference to Wales is to the truck repairer. 21. There is indeed some inconsistency here between his positive assertion that he told the police about jiggling and his earlier evidence that he did not know. The inconsistency is tempered by the fact that his first answers about not telling the police were very qualified. His second answer about telling them was delivered under sustained and appropriate pressure of cross-examination. It included, it seemed to me, some confusion about the timeframe between the time of the accident and the time that he inspected the tyre but his answer does eventually appear to be unqualified. The inconsistency is not so significant that it causes me to have any reservation about the reliability of Mr Weatherburn's evidence. 22. Mr Vincent's fourth attack on Mr Weatherburn's credibility is that his evidence was implausible because of the evidence he gave about cruise control being on and not considering speed an important factor in accidents. This is a reference to the fact that Mr Weatherburn had given evidence that he thought the speed limit where he was, was 110 kph but that he was travelling at 100 kph. He knew that because the truck was regulated by a device which meant that it could not go above 100 kph. His evidence was that he had the cruise control in the truck set at 100 kph. 23. The basis of Mr Vincent's attack is evidence from Mr Weatherburn that he did not regard the fact that he had the cruise control set at 100 as a significant fact in the accident. He added that as a general proposition he did not agree that speed is an important factor in accidents. The line of questioning which commenced with that answer was not pursued so what is described by Mr Vincent as the rather startling proposition was not one which Mr Weatherburn had an opportunity to explain. 24. So far as his answers about the cruise control are concerned it is obvious from the evidence, and I find, that Mr Weatherburn is a very experienced driver. He has driven over millions of kilometres. On that particular stretch of road where the accident has happened he has driven thousands of times. He is a driver who checks his equipment. A bend on a wet road at night would not be an unusual condition at all confronting a truck driver. 25. He gave evidence specifically about the cruise control question. When challenged about whether it was prudent to have the speed control on a wet night at the maximum speed his response was that is how he always drives and he asserted that it was prudent "given the number of kilometres I've done with cruise control and with no incidents". I do not regard that answer coming from a person with that amount of experience in driving as one which is alarming or implausible and I do not regard evidence on that topic or the answer about speed which was appropriately described by Mr Vincent as a "glib" as detracting from Mr Weatherburn's credibility. SHARPE: Sorry your Honour, just before your Honour goes on to that your Honour stated that the speed limit was 110. HIS HONOUR: I did, there's evidence that-- SHARPE: It's truck speed limit was 100 your Honour. HIS HONOUR: Yes you are right thank you. Mr Sharpe has just correctly observed that the evidence is that the speed limit for trucks was 100 kph and I will insert a reference to that at the stage when I revise my judgment. 26. Mr Vincent's final attack on Mr Weatherburn's credibility was at his recollection of the difficulties with steering only materialised after seeing the stripped tyre at the truck repairer. When it was put to him by Mr Vincent that it was only then that he remembered that he had steering problems, not beforehand, Mr Weatherburn's response was, "It's probably not strictly correct in that it was then that I remembered. It was then that I thought I'd found the cause of the problem." 27. What it seems to me occurred when he saw the tyre was that he was confronted by some evidence which might explain what had happened. His response about only remembering the steering problem when he saw the tyre is understandably qualified by him as being "not strictly correct." That is an important distinction. I can understand the development of awareness of knowledge about what happened in the accident as being a process that does not lend itself to clear before and after compartmentalisation. I think Mr Weatherburn was genuinely mystified by what caused the accident and he wanted to find out what had happened. 28. Generally I was impressed by Mr Weatherburn as a witness. His answers appeared to me to be direct. I did not get the impression that he was prevaricating. The impression I got was that he was a straightforward and genuine person giving what he thought was an accurate account of events which happened some years ago and which were accompanied by the circumstances which I describe. I therefore reject the challenge made to Mr Weatherburn's reliability as a witness and I accept the account of what happened in the accident which he gave. 29 The second principal issue which needs to be determined is whether the tyre was defective. As I said, one of the steer tyres from the truck had been removed by the repairers. Then it was in the condition which Mr Weatherburn described it as. There are photographs - which are exhibits before me - of the tyre in that condition. The tyre was examined by Mr Carl Veen. He is a person I accepted as being able to give opinion evidence about tyres. He inspected the tyre and prepared a report. He kept samples from the tyre. He found a cavity inside part of the tyre. When he cut into the cavity he found what he described as "porosity" and the rubber appeared to be under-cured. He found in another part of the tyre several pockets of under-cured rubber. "Porosity", he said, "is a defect in moulded rubber products, resulting from under-cure, or insufficient moulding pressure, or insufficient rubber to fill the mould, during the manufacturing process." He described the tyre as containing three defects: the cavity, the porosity and the under-curing. 30. Mr Veen was called as a witness on behalf of the plaintiff. The plaintiff also called another witness, Dr Robert Casey. He also was qualified to give opinion evidence about the behaviour of tyres. He had read Mr Veen's reports and described them as a "balanced interpretation of the available tyre remains" and Dr Casey considered that the "conclusions are considered to be supported by the objective observations." Dr Casey's opinion was that there were in fact four defects. In addition to the void or cavity found by Mr Veen and the porosity and under-curing, Dr Casey described a condition which he termed contamination. 31. In evidence which I will consider later in this judgment, both Mr Veen and Dr Casey were of the opinion that there were likely to be more defects than the ones they found and that they caused a breakdown in the tyre which in turn brought about the accident. 32. On the other hand, the second defendant called as a witness a Mr Henry Herzog. I accepted him too as a person qualified to give opinion evidence about the behaviour of tyres. Mr Herzog's opinion was that there was no evidence to suggest that the tyre caused or contributed to losing control of the truck. The damage to the tyre would have occurred, Mr Herzog thought, when the truck was being towed - after the accident - to Wagga. He therefore concluded that the damage was the result of events after the accident. 33. I need to say something briefly about the expertise of some of the witnesses. Mr Veen had worked some twenty six years with what became Bridgestone Tyres. He was the New South Wales service manager from the beginning of his employment there. He has inspected and tested tyres, including truck tyres, to determine whether there was a manufacturing fault or whether a tyre was defective for other reasons. He gave before me detailed evidence about how a tyre is manufactured. He has examined, dissected and reported on over 100,000 tyres in his working career. 34. Dr Casey is a consultant engineer. He has a Bachelor of Engineering, Master of Engineering Science and a PhD. He has had experience since 1993 in automotive forensic analysis, including some work on tyres. He has held a number of significant positions in a number of universities. 35. Mr Herzog is also a consultant engineer, who also holds a Bachelor of Engineering, his with honours, and a Master of Engineering. He is also familiar with, from his previous consultancies, the behaviour of rubber and tyres and the behaviour of such materials from his study and experience. 36 Mr Vincent argues that Mr Herzog is an independent witness. Mr Sharpe challenges that, saying that he is argumentative and more an advocate than a witness. My own impression is that he is an independent witness, although he and Mr Veen engaged in some correspondence where they were disputing one another's findings and opinions and each of them obviously became somewhat defensive of their positions. Although I am not saying that that is inappropriate, I do contrast it with Dr Casey, who came across to me as being very detached and objective as a witness. 37. Mr Vincent argues that I have to make an adverse finding about the credit of Mr Herzog in order to find that the tyre was defective. I do not agree. I can find that he honestly and reliably holds his opinion and that there are opposing honestly and reliably held opinions. That I prefer other opinions does not necessitate an unfavourable finding regarding Mr Herzog's credibility any more than a dissenting judgment reflects on a judge's credibility. It involves different interpretation of the same material: both views may be open and arguable. 38. The question for me is whether the plaintiff's argued position is more likely to be the correct view. 39. Mr Vincent argues that the defects observed by Mr Veen and by Dr Casey themselves did not cause the accident. Both witnesses acknowledged that when the proposition was put to them. Mr Vincent then argues that Mr Veen's and Dr Casey's evidence is that it is likely that there were other defects. Mr Vincent points out that the tyre was cut by Mr Veen in twelve places and no such other defects were found. So Mr Vincent argues there is no actual evidence and the court is therefore dealing in possibilities rather than likelihoods, which are insufficient to establish negligence. 40. I have examined the evidence given by Mr Veen and Dr Casey on the likelihood of there being further defects, apart from the ones which they observed. (When I say "they" it was Mr Veen who inspected the tyre in detail. Dr Casey had an opportunity to inspect the pieces which were cut away from the tyre and which are still available. The tyre has since been destroyed. Dr Casey has also seen the photographs.) Dr Casey said that the void was large and that the under-curing was, as he described, macroscopically large. Mr Veen's opinion was that the fact that there were three defects indicated, in his experience, that there were likely to be others. Dr Casey was of the same view. Dr Casey thought that there were likely to be similar defects and similar sized defects. He said that other cavities could exist in more critical portions of the tyre. He said that cursory or visual inspection may not detect the defect. 41. That topic was explored, because the tow truck driver Mr Woodbury checked the tyres before he put the truck on to his tow truck and again at the service station before he embarked on his journey to Wagga. Dr Casey added that if someone knew what they were looking for and ran their hand over "and took the investigation in detail", then he thought that they would find it. On the evidence of Mr Woodbury, his inspection does seem to be cursory. I am not being critical of him, his focus was on how much the tyre was inflated. His evidence was that the tyre was not ruptured, blown or flat. He made the same observations at the service station. It seems to me that the inspection by Mr Woodbury does not amount to the kind of detailed investigation which Dr Casey had in mind. This inspection also was of putting his hand around the relevant parts of the tyre. 42. I am persuaded of the likelihood of further defects in the tyre and the likelihood that such defects propagated to such a size as to impact upon the steering. In this regard I accept the evidence of Dr Casey and Mr Veen. I do not accept other explanations as likely. Four problems, four defects, in a tyre - or three defects as Mr Veen described them - were described by Mr Veen and Dr Casey in terms of such "unbelievable", "remarkable coincidence", "extraordinary" and "most unusual". Mr Veen had not found the presence of the defects which he found in this tyre on any one previous occasion in his inspection of one hundred thousand tyres. Dr Casey's opinion was that the presence of the four defects pointed to multiple aberrant conditions at the time of manufacture. As I said, not only do I accept the evidence of Mr Veen and Dr Casey but their explanation is more likely acceptable than alternatives. 43. One possible explanation, alternative explanation, is that the tyre had become overheated because it was under-deflated. When that was put to Dr Casey he said that such overheating would be accompanied by signs which he described as a pearlitic effect, but that was absent. He said the presence of flexing marks alone, which were pointed out to him, were insufficient, although he acknowledged some blue-black marks seen by Mr Veen which may be consistent with a pearlitic effect. 44. Dr Casey said the towing on the steer tyres which occurred in this case was quite common and that the tyres do not disintegrate. He acknowledged that such towing can lead to an axle carrying more load than in service. One of the alternative theories advanced on behalf of the second defendant is that the tyres were under-deflated and overloaded. But Dr Casey said that any overloading, which he did not concede to be consistent with the evidence, was not responsible for the porosity nor the cavities because of the absence to a sufficient degree of a pearlitic effect "in the place where the cavities form". 45. When specific examples of alternative explanations were explored by Mr Vincent with the witnesses, Mr Veen did not accept that the tyre was under-deflated, nor that a cut might have been the cause. If there was a cut it would not cause as what he described as the "almighty heat" nor would there be porosity. 46. The question was put to the witnesses as to whether the truck might have been towed on its steer tyres, which were misaligned during the towing. There was, said Mr Veen, no evidence of such misalignment. He would expect there to be more scrub marks and the other tyre to show similar signs which it did not do. 47. Mr Vincent argues that the further defects were only possibilities, but I infer that they were probably there because the other causes, or explanations, have been excluded and because I accept the opinions of Mr Veen and Dr Casey of the likelihood of there being other defects. 48. Another alternative explanation explored by Mr Vincent was that a manufacturing defect, such as the kind asserted by Mr Veen and Dr Casey, would not have propagated over the thirty thousand kilometres that the evidence shows the tyre had travelled, and just occurred suddenly at this point of time. Dr Casey's evidence however - whose evidence I accept in this regard - said the question of whether a tyre would fail quickly or slowly was a complex one. 49. The alternative explanation of the defects being the result of reversion brought about by overloading I do not accept because there is not sufficient evidence of any overloading. Also, Mr Veen has not seen porosity accompanied by reversion. 50. Mr Vincent's criticism of his evidence that Mr Veen earlier held a view that porosity can be caused by reversion and his self-described "negligent way he answered the question" carries in my opinion little weight. 51. Mr Herzog, as I said, gave evidence of alternative explanations for the accident other than a manufacturing defect in the tyre causing the accident. As I said, I regard him as an honest expert witness, who has done his best to give his opinion on the material provided to him. However, he made certain significant concessions in cross-examination, which to mind mean that I place less weight on his opinion than on the opinions of Mr Veen and Dr Casey. 52. He acknowledged that there was a cavity in the tyre. He acknowledged the possibility that if there was a void, then there were other voids. His view was that the void occurred when the truck was towed with misaligned wheels, but he acknowledged that if there was a misalignment then he would "expect to see some feathering or some wear, uneven wear, on one shoulder of the tyre." The absence of wear he acknowledged "creates some unanswered questions." He acknowledged that porosity was "usually" the result of the lack of heat or pressure during the curing process of manufacture, although he said there can be other factors involved. He accepted as "a problem with the rubber" if four defects were present on physical examination, being porosity, under-cure, a cavity and contamination. Although, as he said, that is assuming that there was no trauma which brought it about. He acknowledged that if there was no trauma which brought about those defects, then there was a problem with the manufacturing of the rubber. I do not accept that there is evidence of any alternative likely explanation for the presence of the defects observed by Mr Veen and Dr Casey and I therefore find that the tyre had at least the three defects which Mr Veen found, and probably, the four which Dr Casey found. 53. I come to the third significant issue to be determined, that is, whether the second defendant manufactured the tyre. There is a separate question about whether the second defendant can be regarded as the deemed manufacturer of the tyre under the Trade Practices Act 1974. That is not the question I am presently considering. The question I am presently considering is whether I should find as a matter of fact - unrelated to any statutory regime – that the second defendant manufactured the tyre. 54. In this case, the second defendant does not admit that it was the manufacturer of the tyre. Mr Sharpe on behalf of the plaintiff argues that a number of exhibits in the proceedings all contain direct admissions that the second defendant was the manufacturer of the tyre. He points to exhibits C, H, I, P, S and T. 55. In particular, exhibit C is a letter to the plaintiff's solicitors from Michelin Australian Pty Limited, which is the second defendant. The second defendant describes itself in that letter by the abbreviation "MAPL", standing for Michelin Australia Pty Limited. The letter, which is obviously a response to an inquiry made by the plaintiff's solicitors, says "MAPL accepts on face value that the subject tyre is as follows, however this tyre has never been inspected by a representative of MAPL". It describes the tyre as a Michelin tyre. It asserts as follows: "Manufacturing plant: Thailand (week 36 of 2000)". 56. I infer from that letter, being exhibit C, that the second defendant manufactured the tyre in this case. As I said, the second defendant "accepts on face value" that the tyre was a Michelin tyre and asserts that the manufacturing plant was in Thailand. That assertion is unqualified by any suggestion that the plant was operated by another person or entity. 57. Exhibit C is a letter written to legal practitioners acting on behalf of a company which had encountered a problem with its Michelin tyre. Had the "manufacturing plant" been operated by someone other than the second defendant, one would expect the assertion to be qualified. I infer from exhibit C that the second defendant manufactured the tyre in this case. 58. I do not gain assistance from the other exhibits in reaching the conclusion but, as I said, to my mind exhibit C is the item of evidence from which I infer that the second defendant was the manufacturer of the tyre. 59. Having reached that conclusion, there are a number of topics related to the manufacture of the tyre which I will turn now to consider. The first is what is the duty of care of a manufacturer. The second is what is the duty of care of an importer or distributor, which the second defendant acknowledges it was and whether the second defendant owed the plaintiff some duty of care. The third is whether the second defendant breached any duty of care which it owed to the plaintiff. The fourth is whether the defective tyre caused the accident. Gentlemen I will consider those topics after morning tea, a bit after 12. SHORT ADJOURNMENT 60. I am just going to add an additional passage about the second defendant being a manufacturer or the manufacturer of the tyre. Mr Vincent argued on behalf of his client that exhibit C does not constitute an admission of the second defendant manufacturing the tyre. He argues that the tyres are manufactured in Thailand and the second defendant is an Australian company and took no part in it whatsoever. But, as I say, the assertion contained in exhibit C is unqualified and does not contain anything upon which I could conclude, as Mr Vincent urges, that the second defendant, which authored the letter, took no part whatsoever in the manufacture of the tyre. I do not regard the fact that the second defendant is an Australian company as alone any basis for concluding that it took no part in the manufacture of this tyre. 61. I turn now to the first of the four issues which followed the finding about the second defendant being the manufacturer of the tyre. The liability of manufacturers was confirmed in Australia in Grant v Australian Knitting Mills Ltd (1935) 54 CLR 49, a judgment delivered within a few years of the seminal judgment in Donoghue v Stevenson [1932] AC 562. The decision of Grant v Australian Knitting Mills, I had forgotten, is a decision or an opinion of the Privy Council on appeal from the High Court of Australia. 62. The judgment of the Privy Council was delivered by Lord Wright. At 63 his Lordship summed up what he regarded as the principle of the decision in Donoghue v Stevenson by quoting from Lord Atkin as follows: "A manufacturer of products, which he sells in such a form as to show that he intends them to reach the ultimate consumer in the form in which they left him, with no reasonable possibility of intermediate examination, and with the knowledge that the absence of reasonable care in the preparation or putting up of the products, will result in an injury to the consumer's life or property, owes a duty to the consumer to take that reasonable care." Lord Wright described the duty in Donoghue v Stevenson as deduced simply from the facts relied upon, namely "that the injured party was one of a class for whose use, in the contemplation and intention of the makers, the article was issued to the world, and the article was used by that party in the state in which it was prepared and issued without it being changed in any way and without their being any warning of, or means of detecting, the hidden danger". (That is at 64.) His Lordship noted one further point at 65, namely that the principle in Donoghue v Stevenson "can only be applied where the defect is hidden and unknown to the consumer, otherwise the directness of cause and effect is absent". 63. Mr Vincent focussed his submissions upon whether or not his client was a manufacturer. He realistically acknowledged that it would be a very difficult case for him to make out if I found that his client was a manufacturer. He acknowledged the readiness of courts to find a duty of care owed by manufacturers. 64. Having described the duty of care owed by a manufacturer, I now turn to another issue, the second subsidiary issue raised by the parties, of the nature of the duty of care owed by a distributor or importer. That is important because the second defendant admits that it was a distributor or importer in this case. The leading case in this State on the liability of a distributor or importer is McPherson's Ltd v Eaton (2005) 65 NSWLR 187, a decision of the Court of Appeal. 65. In his judgment Ipp JA, with whose reasons Hodgson JA substantially agreed, said at 198 ([61]) that the leading case before that case was Laundess v Laundess (1994) Aust Torts Rep 81-316. Ipp JA quoted from the judgment of Mahoney JA with whom Meagher and Powell JJA agreed in that case. Ipp JA quoted the following passage from Mahoney JA: "In my opinion a vendor of goods does not, as such, have a duty in negligence to a purchaser. There must be something more than a mere relationship of vendor and purchaser. The problem is to define what more is necessary and when the duty arises." Ipp JA went on to say, at [61] that the "significant requirement articulated by his Honour is that there must be 'something more than a mere relationship of vendor and purchaser' before a duty of care arises." Actual knowledge of some defect in the product will amount to a condition which would fulfil the requirement of something more. 66. In McPherson's case, the primary judge had found that the defendant ought to have known of the danger in that particular case. Ipp JA examined the criterion of a vendor being liable because it "ought to know" of a danger. His Honour at 203 ([93]) expressed the opinion that the phrase ought to know "means the knowledge that a person, acting reasonably in all the circumstances of the case, should know." 67. That means in this case that the second defendant, acting reasonably in all the circumstances, as a vendor or importer, ought to have known about the defect in the tyre. I should add that I am proceeding to determine this issue - despite the finding of manufacturer - for completeness and because it was addressed by the parties in some detail. 68. Mr Sharpe referred to the judgment of the Full Court of the Supreme Court of Victoria in Thompson v Johnson & Johnson Pty Limited [1991] 2 VR 449. That is not in my opinion a case about the existence of the duty so much as a case about the breach of the duty. The existence of the duty in that case was not disputed. Also, it was a case where the defendant was a distributor as well as a manufacturer. 69. In my opinion the law, at least in New South Wales, has been considerably refined since the decision in Thompson. An important distinction has emerged between the liability of a manufacturer and the liability of a retailer or distributor. In McPherson's case at 193 ([27]), Hodgson JA expresses the opinion that there is "a world of difference between originating and putting into circulation something which otherwise would not exist, and merely being one of a number of persons involved in the distribution of something originated by someone else". I therefore regard the duty of care as that set down in McPherson's case. 70. I turn to consider - related to the question of a duty of care owed by a distributor or importer - the question whether the plaintiff has satisfied me that the second defendant in this case owed it a duty of care as a distributor and importer. Mr Vincent argues that there is no evidence that the second defendant knew or had reason to know in the capacity as a distributor or importer, of something which would amount to a condition which would be the basis for my finding a duty of care. 71. The evidence from Dr Casey when he was cross-examined by Mr Vincent was to the effect that he would expect that testing of a tyre "must be done somewhere along the line. And, so, if testing isn't being done in the factory itself, testing needs to be done somewhere else, or people need to arrange for testing to be done somewhere else." That was in the context of Mr Vincent cross-examining Dr Casey about the expectations of a distributor or importer of tyres. 72. There is, in my opinion, no evidence in this case that the second defendant, in the capacity of a distributor or importer, knew that testing was not being done in the factory itself. And therefore, I do not find that the plaintiff has satisfied me that the second defendant, as a distributor or importer but not a manufacturer, owed it a duty of care. 73. I turn now to the question of whether the plaintiff has satisfied me, on the balance of probabilities, that the second defendant breached the duty of care which it owed to the plaintiff as the manufacturer of the tyre. The defects found in the tyre, Dr Casey said, "would generally be controlled through quality control measures". He said that in one of his reports which became exhibit Q. He described those measures in para 25 of exhibit Q in the following terms: "(a) regular verification of pressure levels, pressure gauge calibration, mixing ratios, mixing volumes and purity. This coupled to an appropriate inspection regime at the end of the production process. (e) end of line x-ray inspection at appropriate sampling rates, coupled to sectioning of an appropriate sampling rate of specimens. Additionally, close monitoring of customer complaint feedback." He expressed the opinion that the steps which I have just described "would be included in all good tyre production facilities". There was no challenge to that evidence in cross-examination. What was explored were the measures which a supplier or distributor would be expected to undertake. 74. I accept in substance a submission, advanced by Mr Sharpe on behalf of the plaintiff, that the second defendant could have materially reduced the risk of the defective tyre in this case reaching the plaintiff by "steps of monitoring the production of the tyres, having competent mechanics supervising the production of the tyres, having competent persons overseeing the tyres being manufactured and, in the event of there being any concerns about the content of the tyre, ensuring that x-raying took place." There is no evidence before me of any such steps taken by the second defendant. The evidentiary onus in my opinion shifts to the second defendant, which has not discharged this onus. In my opinion, the second defendant has breached the duty of care which it owed to the plaintiff as the manufacturer of the tyre. 75. I turn now to the question whether the defective tyre was the cause of the accident. The common law on causation was recently reviewed by the Court of Appeal in this State in Nguyen v Cosmopolitan Homes [2008] NSWCA 246. McDougall J, delivering a judgment in which McColl and Bell JJA (as her Honour then was) agreed as said at [58]: "The common law concept of causation requires only a finding that event A was a cause, not necessarily the cause or the sole cause, of result B. Causation is a question of fact. It is to be decided by the application of common sense to the facts of the case". His Honour said at [59] that a court's "finding as to causation is not an end in itself. It is a step along the way to reaching a determination on the question of liability for loss." McDougall J quoted from the judgment of McHugh J in March v E & MH Stramare Pty Limited (1991) 171 CLR 506, where McHugh J said at 529 about the common law doctrine of causation, that the "rationale of that doctrine is the allocation of legal responsibility, rather than the determination of what has happened". 76. Dr Casey expressed the opinion that the "presence of defects in the tyre were the incipient cause of the accident" and went on to say that "more likely than not, the state of the tyre at the time of the accident contributed to the accident". The second defendant's challenge to causation is based upon the submissions that the court should reject Mr Weatherburn's evidence about how the accident happened and that there were no defects in the tyre. I have rejected both these submissions. 77. I am satisfied that the plaintiff has discharged its onus of satisfying me on the balance of probabilities that the defective tyre caused, in the common law sense which I have described - and bearing in mind the rationale of the doctrine - the accident in this case. In so far as there was a further challenge to causation based upon the likelihood of further defects being in the tyre than the ones found, I have already concluded that in my opinion there were likely to be more defects than the ones found. 78. The second defendant argues, in the event of an unfavourable finding on liability against it, that the driver contributed to the plaintiff's damage by his negligent driving. That would amount to contributory negligence on the part of the plaintiff, given Mr Weatherburn's position in the plaintiff. The only asserted basis of negligence on the part of Mr Weatherburn is a claim that he was using cruise control at the maximum available speed of 100 kilometres an hour on a wet road at night when there were storms present. This was described as not prudent driving. 79. Mr Weatherburn, as I said, was cross-examined on this issue. He accepted that he had the cruise control set at one hundred kilometres per hour at the time of the accident. It is, he said, part of his normal driving to use cruise control. He said that he uses it "all the time" in order to ensure that he stays within the speed limit. He has done, he said, probably five or six million kilometres using his cruise control. His conclusion, his opinion was that he does not have "a problem with it and it doesn't cause accidents". 80. Mr Vincent squarely put to Mr Weatherburn his client's position that Mr Weatherburn had contributed to or brought about the accident by his own negligence. Mr Weatherburn denied that he skidded on the wet road because he was going too fast in the conditions, because he was not controlling the speed himself. It was put to him that as he went up an incline the truck slowed a little then the cruise control activated, putting too much power into the wheels and thereby losing traction. He responded with a rhetorical question "so why did it go straight ahead", which I took to mean, as he explained, not proceeding around the bend to the right. Mr Weatherburn asserted that it was prudent to drive with cruise control at the maximum setting on a wet night "given the number of kilometres I've done with cruise control and with no incidents". 81. As I said, I have accepted Mr Weatherburn's reliability as a witness. In addition, I regard him as a very experienced driver. In my opinion, given the evidence which I accept of the vast number of kilometres which he has driven using cruise control with no incidents, I do not regard him as being guilty of any contributory negligence. 82. Turning to the question of the damages claimed by the plaintiff in these proceedings, it claims an amount of $66,876.92 for the repair of the trailer and $26,342.08 for loss of income. The second defendant does not raise any issue about the damage to the prime mover and trailer. Mr Weatherburn gave evidence about the calculation of the damage to the prime mover and trailer, which I accept. 83. The second defendant did take issue with the plaintiff's claim about loss of income. The second defendant argued that the plaintiff cannot claim a loss of profit because the uncontradicted evidence was that the plaintiff ran its business at a loss. But Mr Vincent acknowledged the force of the observation that the plaintiff was not claiming in this case for loss of profit, but for loss of income. Had the accident not occurred, the loss incurred by the plaintiff in conducting its business would have been less than otherwise. It was entitled, in my opinion, to look to the defendant to make up that increased loss. 84. Mr Vincent's alternative argument on the loss of income claim was that if I made an adverse finding regarding Mr Weatherburn's credit, then that would have an impact upon any acceptance of his evidence of the calculation of his loss. That observation is accurate, but of course I have not made any adverse finding regarding Mr Weatherburn's credit. I have found his evidence to be truthful and reliable and I therefore accept what Mr Weatherburn says on the topic of the calculation of the loss of income, as well as his evidence on the damage to the trailer. 85. As part of its claim, the plaintiff relies upon provisions of the Trade Practices Act. The plaintiff claims that the tyre was manufactured by the second defendant and that it was not fit for the purpose for which the plaintiff acquired it. In addition, the plaintiff claims that the tyre manufactured by the second defendant was not of merchantable quality. These circumstances give rise, the plaintiff argues, to liability on the second defendant's part to compensate it for the loss and damage. 86. Such liability arises under s 74B of the Trade Practices Act for the fitness claim and 74D for the merchantable quality claim. In order to succeed on either claim, the plaintiff must satisfy me that the tyre comprised "goods manufactured by" the second defendant. The plaintiff argues that the second defendant was the "deemed manufacturer" of the tyre "by reason of s 74A(3) and or s 74A(4) of the Trade Practices Act". 87. The second defendant does not admit that it was the manufacturer of the tyre. As I have said, I have found that the second defendant was the manufacturer of the tyre. In acknowledgement of the arguments put on the question of the second defendant being the deemed manufacturer of the tyre, I do not regard exhibit C - being the letter which I referred to previously - as the second defendant holding itself out "to the public" as the manufacturer, therefore activating the s 74A(3) deeming provision, because the letter was a private communication, not a public one. 88. On the other hand, I regard exhibit H, which was a brochure, as a document by which the second defendant "holds itself out to the public as the manufacturer" of the tyre. It is a brochure promoting the model of tyre which this case is about. An inference clearly available in my opinion from exhibit H is that the second defendant "produced" or "assembled" such a tyre, which "manufactured" is defined to include, by s 74A(1). Therefore in my opinion, s 75A(3)(a) operates to deem the second defendant as a manufacturer of the tyre. 89. In my opinion, there is no room for the s 74A(4) deeming provision to operate in this case. I am not convinced that I can find that the second defendant "was not the manufacturer" of the tyre, nor do I have evidence that any manufacturer other than the second defendant "does not have a place of business in Australia". 90. Nor is there room in my opinion for the operation of s 75A(3)(b). Although it would surprise me if the name "Michelin" was not on the tyre in question, I cannot see it in any of the photographs. I cannot find in Mr Veen's oral evidence any reference to him seeing the brand name on the tyre. It might be argued that it is an inference from his report of 12 March 2002, identifying the tyre as a "Michelin" tyre, but I am not satisfied on balance that I can draw that inference. Mr Veen may have had some other means of identifying the tyre than a brand name on the tyre. 91. In my opinion the plaintiff is a consumer in accordance with the definition of consumer in s 4B because the price of the tyre exceeded the prescribed amount. 92. The second defendant argues that the plaintiff's reliance on s 74B and s 74D lacks foundation, because the tyre does not constitute "goods" for the purposes of those sections. The term "goods", according to s 74A(2)(a), is "to be read as a reference to goods of a kind ordinarily acquired for personal, common, domestic or household use or consumption." A truck tyre cannot fall into such a description argues the second defendant. 93. The plaintiff on the other hand argues that anyone can own a truck with a steer tyre, hence the tyre will fall within the definition. 94. Mr Vincent relies on Rothman J's judgment in Laws v GWS Machinery Pty Limited (2007) 209 FLR 53. His Honour had to consider whether a rear tractor tyre fell within s 74A(2)(a) of the Trade Practices Act. His Honour reasoned at 85 ([160]) that it is "conceivable that a rear tractor tyre may be purchased for personal, common, domestic or household use, but I am of the view (although there is little evidence in these proceedings on the issue) that such is not the purpose for which an article is 'ordinarily' acquired." His Honour went on to say that it is "the purpose for which such a rear tyre is ordinarily purchased that must be ascertained if such a purpose satisfies the description" in the Act. His Honour concluded at [161] that he was "unable to conclude that the rear tractor tyre is ordinarily acquired for personal, domestic or household use or consumption." 95. The goods in question in the Victorian case of Minchillo v Ford Motor Company of Australia Limited [1995] 2 VR 594, a decision of the Appeal Division of the Supreme Court of Victoria, were described by Ormiston JA, with whom Fullagar JA agreed, has a "large Ford Louisville Prime Mover". His Honour said that there was "not the slightest doubt in my mind that these goods were not of a kind ordinarily acquired for personal, domestic or household use." His Honour said that the intention of the definition "was to govern goods which were and are not in the ordinary course of affairs acquired for commercial or business purposes." It is important, his Honour emphasised, to give "proper account of the use of the words 'ordinarily acquired'." As his Honour said, in the "case of a prime mover it is hard to see that it would, in the ordinary understanding of these words, be 'ordinarily acquired for personal… use'." 96. Mr Sharpe argues on behalf of the plaintiff that Minchillo's case is distinguishable. But in my opinion it is distinguishable only on the facts, which are different. What the court said on the statutory interpretation - on the interpretation of the Trade Practices Act - in my opinion is directly applicable to guide me in this case. 97. In my opinion a steer tyre for a prime mover is in almost the same category as a prime mover or tractor tyre. Such a tyre is not an item ordinarily acquired for personal, domestic or household use and therefore in my opinion the tyre did not amount to goods. Therefore the plaintiff's claim and reliance upon s 74B and s 74D of the Trade Practices Act must fail. 98. Alternatively, and in deference to the argument presented, the second defendant says that in any event s 74B and s 74D do not apply because the action was not commenced within the three years since the cause of action accrued. Mr Vincent makes reference to s 74J(1) and s 74J(2)(a)(i) and (iii). 99. What I am going to do is break for lunch. I have left to do the one that I am on now, the time limits, then the s 52 claim and then the Part 5A claim. It is clear that there will be a verdict for the plaintiff, so I do not know whether there will be any argument on costs or not. I am sorry I have an appointment, I will need to resume at 2.30 I apologise for that, but it should take about another twenty minutes or so. LUNCHEON ADJOURNMENT 100. The evidence of Mr Weatherburn - relevant to the question of when the plaintiff first became aware or ought reasonably to have become aware that the goods were either not reasonably fit for their purpose or not of merchantable quality - was that from the time of the accident he had been questioning himself about what could possibly have caused the accident. He said that if it had been his fault he would have, "put my hand up." But he was not convinced that he had caused the accident or that he felt that there was something wrong. He asked the tyre repairer to have the tyre inspected and he was wondering why it had come apart the way it did. He was interested in finding out what had brought about the accident. In re-examination he acknowledged that he had some contact with the insurer after seeing the tyre and that he was aware that certain investigations were undertaken, during which he became aware of Mr Veen, whom he met not long after putting in his claim. He saw Mr Veen in the context of inspecting the tyre as well as the other tyre. Mr Veen provided a report about the tyre. 101. It is clear in my opinion that Mr Weatherburn became aware, or ought reasonably to have become aware, that the tyre was not fit and or not of merchantable quality, soon after the accident and longer than three years before the commencement of the proceedings. In my opinion the action was not commenced in time for the plaintiff to rely upon s 74B and 74D of the Trade Practices Act. 102. For the purposes of s 75AO, he became aware of his loss immediately and aware of the defect when he saw the tyre. In my opinion the action under Part 5A was not commenced in time as well. 103. The plaintiff, in addition, claims under s 52 of Trade Practices Act that the second defendant engaged in misleading and deceptive conduct. It is said that that conduct was in breach of s 52 of the Trade Practices Act. The conduct was that the second defendant imported, distributed and supplied the tyre and "represented that such tyre was fit for safe use and that it did not contain a defect that could lead to the failure of the tyre during use" (para 24 of the second further amended statement of claim). 104. The plaintiff relied on s 51A of the Trade Practices Act to argue the representation being that the "tyre would be reasonably safe for use and reasonably fit for its intended purpose into the future." The plaintiff claims that it relied upon the representation. 105. Mr Sharpe argued on behalf of his client in his written submissions that the representations were to be implied from the advertising brochures and forms used by the second defendant and the use of the name on the tyre. 106. Mr Weatherburn was cross-examined about the extent of his, and therefore the plaintiff's, reliance upon any representations. He said that the particular tyre which he bought, which is the subject of these proceedings, were the newest around at the time and supposedly better. He picked up that information from around the trucking industry - from people who recommended this particular tyre. He did not look at any brochure and he confirmed that it was just from general knowledge and talking to other truck operators that he knew that this particular tyre was the one that he wanted to buy. He frankly acknowledged that the second defendant's advertisements did not have anything to do with his acquisition of the tyres. He has always believed - and indeed still does - that Michelin were the best tyres, at least for the steering function of the truck. Another factor which affected him was that they were on special at the retailer where he bought them. He bought them not because he needed them at the time, but because of the price and he used them later on when the need for them arose. 107. It is clear in my opinion that Mr Weatherburn relied upon his own inquiries for the purchase of the tyres. Although he believed Michelin tyres were the best, he did not rely upon Michelin advertisements or brochures. What prompted this purchase was the price offered by the retailer. 108. The plaintiff also argues that the representations of the second defendant can be implied from the fact that the tyres were Michelin tyres. A similar argument was rejected in the Supreme Court of Victoria in Minchillo, at 617 in the judgment of Ormiston JA. His Honour said that certain "representations were said to be implied from the circumstances that Ford was a manufacturer of prime movers and that it had agreed to sell and supply the vehicle to Lanes for resupply to consumers such as the appellants." His Honour went on to say that it was "sufficient to say that the mere fact that goods are sold, whether for resupply or not, cannot give rise to any implied representation of the kinds alleged by the plaintiffs." 109. I do not regard this case, which I am deciding, as containing any evidence sufficient to prove the representations pleaded by the plaintiff in paras 23 and 24 of its second further amended statement of claim. If there were any representations, in my opinion the plaintiff did not rely upon them. The plaintiff's claim in reliance upon s 52 of the Trade Practices Act must fail. 110. Finally I should make reference to a claim made by the plaintiff relying upon Part 5A of the Trade Practices Act. I have already indicated that in my opinion that part cannot be relied upon because the action was brought out of time. But for completeness I note that the plaintiff claims that the second defendant was liable to compensate it under s 75A(f) of the Act for defective goods manufactured and supplied by the defendant. 111 But the plaintiff once again must prove in accordance with s 75A(f) that the goods were "of a kind ordinarily acquired for personal, domestic or household use." The damaged goods in this case, the plaintiff argues, were the prime mover and the trailer. For reasons already given and in reliance on Minchillo's case, a prime mover and a trailer are not in my opinion, goods of a kind ordinarily acquired for personal, domestic or household use. The plaintiff's claim and reliance on Part 5A of the Trade Practices Act must therefore fail. Now gentlemen that is the conclusion of my reasons for judgment and I think, but I am subject to any submissions that you make, that I now enter a judgment and verdict for the plaintiff in an amount. SHARPE: Your Honour we've calculated-- HIS HONOUR: Have you, thanks. SHARPE: I've got a calculation which we've - is agreed between the parties as representing how it's made up your Honour HIS HONOUR: Thank you. VINCENT: Well - sorry, it is-- HIS HONOUR: All right-- SHARPE: Well-- HIS HONOUR: Let's look at the document. VINCENT: Yes. HIS HONOUR: And then see what - let me read it first, thank you. All right, yes Mr Vincent. VINCENT: Yes your Honour it's my submission that judgment's not entered for the 155,000, rather judgment is entered for the damages which is $93,219 and then interest calculated at and then there was an interest award. There's a distinct difference between the two points. One is a damages award ..(not transcribable).. for the plaintiff in the sum of $93,219. HIS HONOUR: What do you say to that Mr Sharpe? VINCENT: --with interest. SHARPE: That's the first time I've ever heard anyone make that submission. HIS HONOUR: Mr Vincent's what's this? VINCENT: Well your Honour because there's a damages claim. HIS HONOUR: Yes. VINCENT: And then interest follows pursuant to Section 100 but there's not a verdict for the interest unless interest is not claimed as a separate head of damage your Honour. HIS HONOUR: Section 100 of? VINCENT: The Civil Procedure Act. HIS HONOUR: Civil Procedure Act. VINCENT: Because of course your Honour this has certain consequences in relation to costs. HIS HONOUR: Section 100: "In proceedings for recovery of money including any death or damages or value of any goods the court may include interests in the amount for which judgment is given, the interest to be calculated at such rate as the court thinks on the whole or any part of the money" et cetera. That seems to suggest that the judgment amount includes the interest. VINCENT: Well your Honour it does because there is a judgment for damages and there's a judgment for interest but it's not a ..(not transcribable).. theory calculation because of course then if judgment is given for $155,000 well then interest post judgment runs on that full amount as opposed to the interest which has been calculated purely on the damages award to get to the sum of $155,000. Ten percent of 90,000 has been the rate upon which interest has been calculated to date. But then of course if judgment is given for 155,000 as opposed to the 90,000 well then you're going to be paying 10% on 155,000 for instance. HIS HONOUR: From here on. VINCENT: Indeed. So it is actually judgment is for the amount of damages and then there is interest. In the normal order in my respectful submission is that interest on that amount as calculated by the parties and the registry and the party hasn't done that calculation. But it's certainly not judgment or verdict in judgment for that amount because there must be the distinguishing factor on how interest going forward is to be calculated. HIS HONOUR: But how do you reconcile that with Section 100? I can see your point, I can see your point that if I enter judgment for 155,000 now then between now and any payment of the claim then your point is the interest will be calculated on the principal sum of 155,000. That is your point isn't it? VINCENT: Yes. HIS HONOUR: How do you reconcile that though with Section 100? It seems to say plainly "in proceedings for the recovery of money including damages the court may include interest in the amount for which judgment is given." VINCENT: Yes your Honour with interest to be calculated at such rate as the court deems fit. HIS HONOUR: Now hang on, this subs (3) does not authorise the giving of interest on any interest awarded under the section. So the plaintiff wouldn't be able to say from today onwards I want interest on 155,000. Wouldn't I find damages in the sum of X and Y. I don't know whether I enter a verdict for the plaintiff for the damages and then calculate interest and then give judgment for 155,000. VINCENT: Yes your Honour I think my contention is that I guess - and I appreciate that says that interest is not to be calculated going forward on interest, and obviously when an order is made for interest to be payable that is part of the judgment per se. But it's my submission that there has to be a distinction made between what the actual damages award is and then what an interest component is pursuant to the Section 100. HIS HONOUR: Well how is the distinction made? VINCENT: Well your Honour much like it appears on the face of a Statement of Claim. The amount claimed is X with interest and then that's another component and then there's a total. So it's just a matter of compartmentalising. Anyway if I can take the court to the commentary at Section 100.65. HIS HONOUR: Yes I've read that. VINCENT: Your Honour perhaps it could be done this way, I would seek to perhaps elaborate on my reasons in submissions. HIS HONOUR: Well do you want to bring in short Minutes? VINCENT: That's what I would-- HIS HONOUR: Either agreed or submissions? VINCENT: Because as I understand it it's to be an application for indemnity costs as well by the plaintiff and I would certainly want to be heard on that application or both parties may want to be heard and that may take more than the time we have this afternoon. Plus I don't know which particular offer the plaintiff's relying upon at this stage. SHARPE: The first one. VINCENT: Which one's the first? SHARPE: The 94,000. VINCENT: Yes well this is particularly why this is a pertinent issue because an offer for 94,000 in circumstances where there was only a claim on certain stages to $66,000 plus a nominal transfer. HIS HONOUR: This is the first time I'm hearing all this. VINCENT: Yes and granted but this is exactly why your Honour on one view the manner in which the judgment is entered is relevant. HIS HONOUR: Yes all right. So it sounds as though we need to fix a date for the verdict and judgment. I've given my reasons for judgment. The form of order needs to be the subject of submissions or agreement and ordered by me and by the sounds of it there's an argument on costs. I mean you're claiming indemnity costs. SHARPE: Yes your Honour. I mean what we seek is the 155,897.17 as a judgment and then we seek an order for costs and in that regard there was on 18 January 2007 an offer of compromise of 94,000 plus costs. So I'd be seeking indemnity costs from that date 18 January 2007. DISCUSSION AS TO SUITABLE DATES HIS HONOUR: I direct that a transcript of my reasons for judgment be taken out, that will be made available to me first to revise. SHARPE: Your Honour I may cause my solicitor to put into affidavit form the material concerning the settlement offers and so on and if I can get that delivered down to your Honour beforehand and I will tender it on that day. VINCENT: Perhaps your Honour if we have some directions for that evidence and any evidence in reply. SHARPE: I don't mind, they can put on whatever they want. HIS HONOUR: I can give you directions if you like, but it's probably best if you - I think it would be sensible that if you've got evidence you want to put before me about settlement offers or anything else relevant to costs, and any submissions about the form of orders and whether it includes interest or not, then if they could be concluded a week before, by Friday 3 July or if you like Monday 6 July. SHARPE: Perhaps the Friday your Honour just in case if there's anything arising from-- HIS HONOUR: Friday the 3rd is fine, Friday 3 July, any evidence and submissions. ADJOURNED TO 10 JULY 2009 ********** 06/07/2009 - typographical error in case title - Paragraph(s) case title DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.