Waratah Smash Repairs Pty Limited v Sonenco (No.92) Pty Limited & 3 Ors [2005] NSWSC 1283

New South Wales Supreme Court

CITATION : Waratah Smash Repairs Pty Limited v Sonenco (No.92) Pty Limited & 3 Ors [2005] NSWSC 1283

HEARING DATE(S) : 25, 26, 27 July 2005; 21, 22, 23 September 2005; 25 November 2005

JUDGMENT DATE : 12 December 2005

JUDGMENT OF : Newman AJ

DECISION : See Para 86

CATCHWORDS : Negligence - damages - remoteness of damage - foreseeable loss - loss of profits - loss of goodwill

Benward Pty Ltd & Ors v Metal Deck Roofing Pty Ltd & Ors [2001] NSWSC 1053 Lagden v O'Connor [2004] 1 AC 1067 CASES CITED : Owners of the Liesbosch Dredger v Owners of Steamship Edison [1933] AC 449 Tyco Australia Pty Ltd v Optus Networks Pty Ltd & Ors [2004] NSWCA 333 Wyong Shire Council v Shirt (1980) 146 CLR 40

Waratah Smash Repairs Pty Limited PARTIES : Sonenco (No 92.) Pty Limited & 3 Ors

FILE NUMBER(S) : SC 20343/03

Mr B Toomey QC & Mr D Pritchard (plaintiff) COUNSEL : Mr D Fagan SC & Mr P Bolster (defendants')

Ebsworth & Ebsworth Solicitors (plaintiff) SOLICITORS : Colin Biggers & Paisley Solicitors (defendants')

LOWER COURT JURISDICTION :

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION NEWMAN AJ

12 December 2005

20343/03 Waratah Smash Repairs Pty Limited v Sonenco (No 92) Pty Limited & Ors

JUDGMENT 1 NEWMAN AJ: On 6 November 2001 a crane collapsed onto the plaintiff company's premises from adjoining premises. The impact of the crane upon the plaintiff company's building caused extensive damage. The plaintiff company commenced action against a number of defendants' who had responsibility for the operation of the subject crane. However, agreement was reached between the defendants' as to liability and liability for the damage caused by the collapse of the crane has been admitted. Thus the only issue for determination by the court is the amount of damage suffered by the plaintiff company. 2 Overshadowing the plaintiff company's claim for damages is the fact that, at the time when the subject incident occurred, the plaintiff company was under-insured. While a certain amount of restoration was made to the damaged building, that restoration is by no means complete. The reason why the building restoration was not fully completed was that the funds for restoration available through the plaintiff company's property insurer were exhausted. There was no issue in the case that the works which had been completed by way of restoration were anything but proper. Accordingly, the defendants' concede that the amount of $324,053 spent on restoring the building is properly claimable in this action. 3 Once the available insurance funds were exhausted the plaintiff company was not in a financial position to complete the restoration. 4 Fortunately for the plaintiff company the decision of the House of Lords in the Owners Of The Liesbosch Dredger v Owners of Steamship Edison [1933] AC 449 has now been overruled by the House of Lords in Lagden v O'Connor [2004] 1AC 1067. In the Liesbosch Dredger the House of Lords, principally in the speech of Lord Wright, held that losses which had been aggravated or contributed to by a plaintiff's impecuniosity could not be recovered on the basis that such damage was too remote. In Lagden v O'Connor (supra) Lord Hope emphatically overruled the decision in the Liesbosch Dredger, receiving sufficient support from a number of other members of the House to change the law. In Tyco Australia Pty Ltd v Optus Networks Pty Ltd & Ors [2004] NSWCA 333 at 192 the Court of Appeal accepted the overruling of the Liesbosch Dredger in Lagden v O'Connor. Referring to the Liesbosch Dredger Handley JA at 192 observed as follows:- "That much distinguished decision was effectively overruled in Lagden v O'Connor [2004] 1 AC 1067. As a result it is now clear that an injured party that can afford to take steps to mitigate its damage because it has business interruption insurance will recover less than an insured party in the same position who cannot afford to take such steps. Insurance has now become indirectly relevant where it facilitates mitigation." 5 While, as I have said, the defendants' concede material damage representing the monies expended in the works carried out to partially restore the plaintiff company's premises there are a number of issues which were the subject of dispute in these proceedings. 6 The items in dispute include further items of material damage, damage to stock and customer's vehicles and economic loss. 7 The further items of material damage claimed by the plaintiff company are as follows:-