New South Wales Supreme Court CITATION : GE Capital Asset Services & Trading Asia Pacific Pty Ltd v Rocks Excavations & Plant Hire Pty Ltd (No 2) [2003] NSWSC 246 HEARING DATE(S) : 25/03/03 JUDGMENT DATE : 25 March 2003 JURISDICTION: Equity division JUDGMENT OF : Young CJ in Eq DECISION : Orders made. CATCHWORDS : PROCEDURE [113] & [115]- Order- Breach of contract- Appropriate to order damages plus injunction- Whether proper to order damages to be assessed by Master. CASES CITED : Aristoc Industries Pty Ltd v R A Wenham (Builders) Pty Ltd [1965] NSWR 581 Moorhouse v Angus & Robertson (No 1) Pty Ltd [1981] 1 NSWLR 700 GE Capital Asset Services & Trading Asia Pacific Pty Limited (P) PARTIES : Rocks Excavations & Plant Hire Pty Limited (D1) Rocks Services Pty Limited (D2) Niel William English (D3) FILE NUMBER(S) : SC 5401/02 COUNSEL : M Cashion SC and S T White (P) D Brezniak (D) SOLICITORS : Kemp Strang (P) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION YOUNG CJ in EQ Tuesday 25 March 2003 5401/02 – GE CAPITAL ASSET SREVICES & TRADING ASIA PACIFIC PTY LTD v ROCKS EXCAVATIONS & PLANT HIRE PTY LTD (NO 2) JUDGMENT 1 HIS HONOUR: In this matter I gave judgment on 28 February 2003 and today the question has arisen as to what formal orders should be made. 2 The plaintiff has now elected to proceed upon its claim against the first defendant for breach of the equipment rental agreement, so that I am now dealing with a claim made in contract. 3 There is no doubt that, for the reasons I gave earlier, the plaintiff is entitled to relief. The question is what relief. 4 As I mentioned in my earlier judgment, ordinarily damages are a proper remedy for breach of contract, but there will be situations where, looking at the whole of the circumstances, particularly the nature of the chattel, and the solvency of the defendant, they will not be. 5 So far as the uniqueness of the chattel is concerned, the plaintiff is a finance company and is really only interested in getting its money back, or at least as much of its money back as it possibly can, rather than using the equipment. 6 So far as solvency of the first and third defendants are concerned, there is not sufficient material to show, in the light of the guarantee, that a damages order is likely to leave the plaintiff in a situation where it will not be adequately compensated, especially if one very, very last chance is given to the first defendant to pay out the agreement, to use a fairly broad brush term. 7 Accordingly, it seems to me that I should make an order for damages, but also make the injunction of the type referred to by Jacobs J in Aristoc Industries Pty Ltd v R A Wenham (Builders) Pty Ltd [1965] NSWR 581 preventing interference by the plaintiff with the repossession. 8 I consider that any mandatory order, which was the order sought by the plaintiff in the draft short minutes, goes beyond the minimum equity necessary to give the plaintiff adequate protection for its common law rights. 9 I will set out at the end of these reasons the form of orders I make. It will be seen from these that on or before 8 April this year either the agreement will be paid out or else the equipment will be repossessed. If repossessed, a number of things could happen, but the most likely is that, both for its own commercial benefit and to mitigate against its damages, the plaintiff will seek to sell the goods for the highest possible price. If the price that is recovered is more than would have been paid under the sale agreement, then there will be a different scenario than if it is less. 10 The plaintiff is entitled to damages under three heads; (a) for failing to deliver possession on 23 August 2002, as it was required to do under the equipment rental agreement; (b) for breach of the sale agreement in not paying the purchase price on or about the due date 5 September 2002; and (c) for not paying the plaintiff's costs over and above the assessed costs. 11 As to (a), if the first defendant has, as it claims, been paying current hire charges during the period since 23 August 2002 until repossession, it would seem to me that probably the damages are very minimal, if not nominal. However, there is insufficient material before me at the moment to make any final assessment. 12 As to (b) the normal measure of damages under the Sale of Goods Act 1923 would be the difference between the contract price and the market price as at 5 September 2002, plus interest. However, the damages under head (b) may very well cover much the same matter as under (a) and whoever assesses the damages must be careful not to get involved in what is commonly call "double dipping". 13 As to (c), I have no material at this stage. The difference between assessed costs and actual costs is getting slimmer day by day, but there is still some differential. 14 There are two further complications. I received a piece of paper, which will remain with the papers, which purports to show "payment to GE Capital" of almost $200,000 between October 2001 and January 2003. If some of these payments were payments of capital moneys under the sale agreement then, at least over and above a ten percent deposit, there would ordinarily be some grounds for recovery back under Equity's doctrine of relief against penalty. It is, however, unclear at the moment just whether this is a possible claim or not. 15 The other matter is that in para 92 of my judgment I said that I should make an injunction and refer the question of damages for breach to a Master. I have great doubts this morning as to whether that was an accurate observation. There has not been time to explore the matter fully, but cases such as Moorhouse v Angus and Robertson (No 1) Pty Ltd [1981] 1 NSWLR 700 strongly suggest that where a judge has heard a common law claim the judge must deal with the matter of damages and cannot remove the assessment to a Master. 16 It may be that over the last twenty years the rules have been changed to accommodate that, see eg Schedule D Part 2 Item 1 of the Supreme Court Rules and note [60.1A.2] to the Supreme Court Practice. I have great doubts about this because whilst our Pt 35 of the Supreme Court Rules has adopted English order 37 rr 3 and 5 it has not adopted English order 37 r 4, which is the only power to give part of the case to a Master after one has heard it. 17 The point is not without significance. In Equity where damages are left to a Master, the Master conducts an inquiry and gives a report. On that inquiry the evidence before the Judge may be used. 18 However, apart from this, or by consent, the evidence given before a Judge on liability may not be read before another judicial officer considering damages. 19 The evidence problem does not arise in the present case: however in some others it could create a real problem. 20 However, I can leave that question to another day, having flagged it, because the sensible course is to make the urgent order now for the recovery of the goods; find out in due course what they sold for; require the plaintiff to document its claim for damages, and the first defendant to indicate where it disputes it, and then on 19 June, or some other convenient day, work out what I can or should do about the assessment of damages. 21 Accordingly the orders I make are as follows: 1. Note that the plaintiff elects to proceed upon its claim against the first defendant for breach of the Equipment Rental Agreement dated 8 August 2002 between the plaintiff, the first defendant and the third defendant ("the ER agreement") and to abandon its claims against the first defendant in detinue and in conversion in respect of the equipment the subject of the ER agreement ("the Equipment"). 2. Order that unless the first defendant takes advantage of order 3 no later than 4 pm on 8 April 2003 it is: (a) to serve upon the solicitor for the plaintiff an affidavit made by a person having personal knowledge of the facts disclosing the then current whereabouts of each and every item referred to in the schedule to the summons filed in these proceedings; and (b) not do anything by itself, its servants or agents in any way to hinder or impede the plaintiff's repossessing each and every piece of equipment so described in the schedule. Part (b) of this order is also made against the second defendant. 3. Order that the first defendant may in lieu of complying with order 2 no later than 4 pm on 8 April 2003 hand to the solicitor for the plaintiff or a duly authorised representative of the plaintiff a bank cheque for $660,000. 4. Provided that at least 12 hours' notice is given of an intention to enter under this order, order that each of the first and second defendants permit the plaintiff, its employees, agents, contractors and invitees (including but not limited to prospective purchasers of the equipment) to enter upon the land in accordance with the deed ("the licence") between the plaintiff, the first defendant and the second defendant dated 8 August 2002 at any time during daylight hours (whether or not the second defendant is in possession of the land and whether or not the licence has been determined): (a) to inspect the equipment; (b) to conduct a sale by auction or other means as the plaintiff determines of the equipment for a period of six (6) weeks after the plaintiff gives notice to the second defendant of the plaintiff's intention to conduct such sale; and (c) to remove the equipment from the land. 5. Note that the plaintiff is entitled to damages against the first defendant: (a) in respect of its breach of the ER agreement by failing to deliver and surrender possession of the equipment on and after 23 August 2002; (b) in respect of its failure to pay the amount due under the sale agreement between the first and third defendants of the one part and the plaintiff of the other part made 8 August 2002; and (c) claim for costs over and above order 11 due pursuant to the ER and sale agreements. 6. Note that the third defendant is liable to indemnify the plaintiff in respect of the damages referred to in 5 (a), (b) and (c). 7. Direct that the plaintiff on or before 4 pm on 9 May 2003 file and serve on the defendants a duly particularised schedule of the amounts claimed for damages. 8. Direct that the defendants on or before 4 pm on 6 June 2003 file and serve on the plaintiff an itemised schedule as to which, if any, claims for damages made by the plaintiff are in dispute and why and also a fully detailed list of any cross-claim including claims for relief against penalty. 9. Stand the proceedings over to 9.30 am 19 June 2003 before me for further directions. 10. Grant liberty to any party to apply on five days' notice. 11. Order that the first defendant pay the plaintiff's costs to date; further consideration as to orders for costs are reserved. *********************** Last Modified: 04/03/2003 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. 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