A Class Piling and Drilling Pty Ltd v Seventy Eight Promotions Pty Ltd (No 4)

[2024] NSWDC 306

District Court

New South Wales

Medium Neutral Citation:

A Class Piling and Drilling Pty Ltd v Seventy Eight Promotions Pty Ltd (No 4) [2024] NSWDC 306

Hearing dates:

21-23, 27-29 February, 24 July 2024

Date of orders:

24 July 2024

Decision date:

24 July 2024

Jurisdiction:

Civil

Before:

Neilson DCJ

Decision:

I give judgment for the plaintiff against the defendant for $35,611.68.

Catchwords:

BAILMENT for reward – Plaintiff’s drilling rig damaged whilst being carried by Defendant, a haulier – Liability admitted – QUANTUM OF DAMAGE – Whether loss of value of rig or cost of repair and loss of profit – Claim by Plaintiff for wages paid to its employees – Whether recoverable – Other heads of damage including loss of profits.

Legislation Cited:

Nil.

Cases Cited:

A Class Piling and Drilling Pty Ltd v Seventy Eight Promotions Pty Ltd (No 3).

Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435, 466.

Blackadder v Ramsey Butchering Services Pty Ltd (2005) 221 CLR 539, [80].

Collier v Sunday Referee Publishing Co. Ltd [1940] 2 KB 647; [1940] 4 All ER 234, 236.

Darbishire v Warran [1963] 1 WLR 1067; [1963] EWCA Civ 2; [1963] 3 All ER 310.

East Ham Corp v Bernard Sunley & Sons Ltd [1966] AC 406.

JQE Hall Ltd v Barclay [1937] 3 All ER 620.

Ruxley Electronics Ltd v Forsyth [1996] 1 AC 344.

Zogiannis v Stevens [2012] VSC 264, [6]-[7].

Texts Cited:

Palmer on Bailment, 3rd Ed., 2009 [16-046].

Category:

Principal judgment

Parties:

Plaintiff – A Class Piling & Drilling Pty Limited
Defendant – Seventy Eight Promotions Pty Limited

Representation:

Counsel:
Plaintiff – Young, J.
Defendant – Street, C.

Solicitors:
Plaintiff – Moray & Agnew
Defendant – HWL Ebsworth Lawyers

File Number(s):

2023/00103136

Publication restriction:

Nil.

Judgment

Introduction

1. HIS HONOUR: The plaintiff was the owner of a pile drilling rig. On 16 January 2018 it bailed that rig to the defendant for the defendant to transport the rig from the defendant’s depot at Redhead, about 16 kilometres south of Newcastle CBD, to a work site near Hexham, to do work on a job site described as “John Renshaw Drive, Beresfield” for a company known as “CivHix” (Court Book page 194). The rig was loaded into a tri-axial trailer, registration number TB95LJ which was towed by a Volvo 400 rigid truck registration number CB37GF both supplied by the defendant. An incident Report Form completed on behalf of the defendant (Court Book page 125) provides this narrative:

“[Driver] commenced work at 5:30pm driving truck…to pick up a trailer…and Drill rig from Redhead to deliver it to Hexham. [Driver] completed all pre-checks on the truck including checking the hitch for cracks as part of our pre-risk assessment. [Driver] collected the trailer…and drill rig from Redhead. [Driver] attached the trailer…[on] the back of the truck…onto the hitch and loaded the drill rig. The rig was correctly tied down with chains. [Driver] then began to drive to Hexham, via City Road, Merewether. Once on City Road, [Driver] was on the inside lane of a two-lane roadway. [Driver] was on the straight when the connection of the hitch snapped causing the left hand side of the truck to dip and the trailer leaning toward the left. This in turn caused the trailer and drill rig to roll onto the road.

The direct cause of this accident is described in the same document as “the connection (hitch) holding the trailer snapped”. That snapped hitch is clearly shown on an attached photograph.

2. This bailment was for reward. There is no dispute that the defendant “operates a transport business that provides float services for heavy machinery, including drilling rig equipment in the NSW construction industry” according to paragraph 36 of Exhibit A. There is thus no issue as to the liability of the defendant to the plaintiff for damage done to the rig or for any other damage that the defendant may have incurred for which the defendant is in law liable. What is in question is the quantum of damage. The plaintiff claims damages of $216,344.96 in the Statement of Claim but, somewhat surprisingly, not interest. The defendant says that the plaintiff is not entitled to anything other than the payout it has already received from its property insurer, namely $160,000. The plaintiff only seeks its “non-subrogated losses”.

The Plaintiff

3. The plaintiff was originally known as MSB United Pty Ltd. On 17 January 2017 that company changed its name into its current form after it had purchased a business owned by another company that used that name until 17 January 2017. The directors and shareholders of the defendant are Mr Shannon Lee Baker and Mr Morrad Muadin. Mr Baker is a qualified mechanical fitter having worked as such in the construction industry in NSW, Western Australia and Queensland. About April 2013 he became licensed to operate heavy machinery including excavators, skid steer loaders and front end loaders. The former owner of the plaintiffs’ business, Mr David Randell, wrote the following about Mr Baker on 1 October 2016:

“I, DAVID LESLIE RANDELL, of AClass [sic] Piling and Drilling Pty Ltd, a heavy machinery operator of 50 years experience being in business for myself for the previous 30+ years in similar fields. I am a competent operator of heavy equipment.

After working with SHANNON LEE BAKER for 12 months I have observed Shannon to be a proficient operator of all the equipment owned by AClass [sic] Piling and Drilling which includes CFA Drill Rig, Kelly Bar Drill Rig, Concrete Line Pump and Excavator.

I find Shannon to be an upstanding citizen at all times. He is a proficient, responsible, capable, safe operator with good communication skills, patience and common sense. He makes safe decisions and carries them out. Shannon has been extremely coachable and also has managerial skills suited to his position.”

Like Mr Baker, Mr Muadin, in about April 2013, became licensed to operate heavy machinery including excavators, skid steer loaders and front end loaders. He has worked in the drilling and piling industry for approximately 8 years and, before that, in civil earthworks for 10 years. In cross-examination Mr Muadin admitted that he was “not that mechanical” (T129.12 and T130.38).

4. On 19 December 2016, the plaintiff exchanged contracts for the sale of a business with the company then known as A Class Piling and Drilling Pty Ltd for the purchase of that company’s business for $370,000. Completion date for the purchase was 9 January 2017. The purchase price was apportioned as follows:

Goodwill:   $180,000

Equipment:   $190,000

Clause 40 of the contract was this:

“It is acknowledged by the Vendor that the Purchaser has already paid $165,000 made up as follows:

(a) $37,000 as the Deposit; and

(b) $128,000 as part payment of the Price.”

Clause 43 of the contract was this:

“The Vendor has agreed to assist the Purchaser in completion of this sale by lending to the Purchaser at and from the Completion date, any shortfall in the balance of the Price payable at the Completion date, to be repaid by the Purchaser on or before 9 April 2017.”

These provisions speak of a relaxed or trusting relationship between the effective vendors, Mr David Randell and his wife Mrs Julie Randell who stayed on with the new owners of the business as “Admin”.

5. Annexure A to the Contract for the Sale of Business, which I have transposed into a table for ease of reading, is this:

Name	Serial number	Model	Hours
KELLY BAR DRILL RIG Komatsu PC 120-6	58795	2004	4,642
CONTINUOUS FLIGHT AUGER DRILL RIG Komatsu PC 120-6	49327	2003	1,920
CONCRETE PUMP Transcrete Alpha P35	OL0341	2003	2,603
EXCAVATOR Kubota Asseado ASRX 592	L0767	-	3,581

• Associated augers and drilling tools”

The rig damaged in the accident of 16 January 2018 was the first of those pieces of equipment, usually referred to as “the Kelly Bar Rig” and to which I shall refer as “the KBR”.

The KBR

6. Mr Baker in his affidavit of 29 July 2023 (Exhibit A) said this about the KBR:

“15. A Class currently owns plant and equipment which it uses for drilling purposes. As noted in the Contract for Sale of Business, one of the Business’s [sic] main pieces of plant and equipment is a Komatsu PC120-6 converted drilling rig, serial number 58795, which is referred to as a ‘Kelly Bar Rig’ (the Kelly Bar Rig).

16. Exhibited at SB1:38-45 is a copy of the Komatsu PC-120-6 data sheet, including detailed specifications, information and technical data.

17. The Kelly Bar Rig predominantly consists of two main components: the ‘base’ and the ‘mast’. The ‘base’ of the Kelly Bar Rig is the Komatsu PC120-6, and the ‘mast’ is the Clo Zironi, which is imported from Brazil. The Kelly Bar Rig owned by A Class was designed and assembled at Monster Rigs Pty Ltd (Monster Rigs), a business on the Central Coast.

18. A Kelly bar is a drilling tool that attaches to the Komatsu PC120-6 and consists of several hollow steel tubes of different diameters that are nested inside each other. The tubes are connected at the bottom by a square or hexagonal cross section, and at the top by a pin connection. The Kelly bar is a component of a rotary drilling rig which is used when the rig is being used in Kelly drilling configuration. The Kelly bar’s main purpose is to transfer the torque of the rotary drive and crowd pressure of the crown system to the drilling tool. The Kelly is typically about 10 ft (3 m) longer than the drill pipe segments, thus leaving a portion of newly drilled hole open below the bit after a new length of pipe has been added and the drill strong has been lowered until the Kell bushing engages again in the rotary table.

…..

20. The Kelly Bar Rig is the only machine owned by A Class that has been purpose built to operate on hard rocky ground and has the capacity to drill deeper holes with larger diameters than the other equipment owned by A Class. It is not a standard hire machine that can be hired from consumer hire places such as, for example. Kennards Hire or Coates Hire.”

7. The other drilling rig purchased by the plaintiff from the vendor was the Continuous Flight Auger Drill Rig – Komatsu PC 120-6 which can be described shortly as the CFA rig. It obviously has the same base as the KBR. In October 2017 the plaintiff purchased a second CFA rig. Of this second CFA rig, Mr Baker said this in his affidavit:

“21. In October 2017. The Business purchased a Komatsu Continuous Flight Auger (CFA) drill (Spare Komatsu CFA), which was stripped and used for spare parts.

22. The Business never used this Spare Komatsu CFA machine for diling and drilling revenue purposes. The Spare Komatsu CFA was extremely cheap and was being sold because another piling and drilling business had gone into liquidation. Exhibited at SB1:56 is Tax Invoice 201710565 for the purchase of the Kelly Bar Rig from NASCO Auctioneers for the amount of $27,500.00 (incl. GST).”

8. Sometime in January 2018, whether before or after 16 January the evidence does not disclose, the plaintiff purchased another rig, known as the Kobelco rig. Of that Mr Baker said this:

“23. In January 2018 the Business purchased a Continuous Flight Auger Drill Rig, serial number 58795 (Kobelco Rig). These rigs are rarely sold, so I considered it was a good opportunity to purchase a newer piece of machiner.

24. The Kelly Bar Rig and the Kobelco Rig have differing capabilities. The Kelly Bar Rig offers greater drill depth and auger sizes (diameter of drilling holes), whilst weighing less and being smaller in height.

25. There are some jobs that can only be done by the Kelly Bar Rig, and not the Kobelco Rig. There are jobs where there are certain height and/or weigh limits as well as differing requirements for drilling depth and diameter that can only be completed by the Kelly Bar Rig. The type of soil (rocky, clay, sandy etc.) may also impact which drill rig has the capabilities to perform the necessary drilling.

26. Continuous Flight Auger Piles (CFA Piles) are cast-in-place piles, using a single continuous hollow stemmed auger. Vibration free and low noise, this piling system is ideally suited to installation in sandy water charged ground or unstable soil conditions and connected to a concrete pump. CFA Piles are built by drilling a hollow-stem auger into the ground to form the pile’s diameter and a concrete pump is utilised to deliver concrete through the hollow auger stem to the pile. Pile diameters range from 300mm to 1.2 m. Piling Lengths range to 36 m.”

In the following paragraph of his affidavit, Mr Baker annexed information from a website which clearly distinguishes and explains the difference between CFA and rotary based piling which the KBR could do.

9. On the evidence available I have no hesitation in concluding that the KBR was an unique piece of equipment for the plaintiff, that it had no relevant piece of plant to do what the KBR could do, if the KBR were not available for use because it was damaged. During submissions I thought that the CFA Rig referred to in [7] above could do the work of the KBR, but on re-reading the evidence contained in Mr Baker’s affidavit, that belief was erroneous.

Post-Accident Fate of the KBR

10. The KBR was “built” by P.K. Goodman Pty Ltd, in the sense that it fitted to the Komatsu PC120-6 base the Clo Zironi (Brazilian) mast. That company appears to be part of the “Goodman Group”, the principal of which is Mr David Charles Goodman. Another member of the Goodman Group is Monster Rigs Pty Ltd whose premises are at 12 Ketch Close, Fountaindale which is south of Wyong. On 17 January 2018 the defendant arranged for the KBR to be transported to the Monster Rigs premises. Mr Baker did not object to that: he thought Mr Goodman was the optimal repairer as he would know “all the specific details of its design and manufacture” (Exhibit A at [42]).

11. On 21 January 2018, Mr Goodman provided this assessment of the damage and quotations for replacement or repairs:

“Damage Report:

This machine has been extensively damaged and with 30 years of purpose built experience, I am certain that only minimal parts can be salvaged. Also, liability for parts that aren’t visible could be a problem if damaged and failed.

To complete repairs up to engineer acceptability a new base carrier would be required, due to the extensive damage to the machine chassis undercarriage, along with 90% damage of facia and structural components.

Option 1: New Replacement Rig

Estimated Cost = $475,000

Duration = 6 months

Option 2: Replacement (Second hand base and new mast assembly)

Cost

Components and Fitting

$120,000 Approx.

Base carrier replacement

Second hand Komatsu PC120 w/ Approx. 2000hrs and 4yrs old

$148,000

Mast Assembly

$68,000

Mast Fitting and Testing

Option 3: Repairs

Cost

Components and Fitting

$120,000 Approx.

Base carrier replacement

Second hand Komatsu PC120 w/ Approx. 2000hrs and 4yrs old

$86,000

Mast Assembly Repair (some parts salvageable however minimal)

Includes:

- New mast tube

-Crack test and repair where required

- Gear box; dismount, check, reassemble and remount.

- Hydraulic Rams; disassembled, crack tested, resealed, reassembled and tested.

- Main Mast Articulation; crack tested.

- Main Winch; Stripped cleaned, reassembled and tested.

- Kelly Bar; Stripped, inspected and tested.

- Flexible Steel Wire Ropes; replaced

- Hydraulic Hoses: replaced

- Electrical Wiring: replace

$28,000

Adapt mast to second hand machine

Testing and Certificates of Conformance

Conclusion:

Based on the current damage, prior condition and age of the drill rig, the recommended option is as follows;

Option 3: Repairs

Cost

Components and Fitting

$120,000 Approx.

Base carrier replacement

Second hand Komatsu PC120 w/ Approx. 2000hrs and 4yrs old

$86,000

Mast Assembly Repair

$28,000

Adapt mast to second hand machine

$234,000 + GST

Rebuild time:

8 Weeks from acceptance[.]”

The totals of these options were:

Option 1:   $475,000

Option 2:   $336,000

Option 3:   $234,000

A decision was made to choose Option 3.

12. The affidavit of Mr Baker continues thus:

“45. ….Monster Rigs carried out repairs to the Kelly Bar Rig after which it issued a Tax Invoice to A Class dated 17 April 2018 in the amount of $174,000.00 (excl. GST) for repair of the Kelly Bar Rig, inclusive of $60,000 (excl. GST) for strip down inspect start and deposit, and $66,000 (excl. GST) for strip down inspect and start, which is exhibited at SB1:106[.]

46. In later conversations I had with Mr Goodman in January and February 2018, although I cannot now recall the exact words, he advised me that there was more significant damage and greater costs would likely be involved than in his Damage Report and Repair Quotation, because the table drive gearbox also sustained damage from the Incident. To the best of my recollection, he described to me that the drives were cracked, and others were broken, along with the main ring gear which was badly damaged beyond repair. The time it would have taken to source and import one of these drives or getting one made up was going to be far more expensive and cause more downtime in the rebuild than he originally estimated.”

In addition to the Tax Invoice referred to by Mr Baker in that affidavit, a second affidavit sworn by Mr Baker on 26 January 2024 (Exhibit C) annexes a Tax Invoice from Monster Rigs dated 31 March 2018 for a “progress payment” of $60,000 plus GST. In that Affidavit Mr Baker said this:

“7. Exhibited at SB2:2 is a copy of a printout of the A Class cheque account with payments made to Monster Rigs for repairs carried out to the Kelly Bar Rig. I note that the total of the payments made to Monster Rigs in the period 1 April 2018 to 21 August 2018 for the repair to the Kelly Bar Rig was $135,960.00. I believe this amount was for payment of $123,000.00 for the work done by Monster Rigs, plus GST of $12,300.00.”

The printout of the plaintiff’s cheque account can only be read with a magnifying glass. The total paid to Monster Rigs was indeed $135,960 but Mr Baker’s mathematical breakdown is obviously incorrect. If the sum included GST, the base payment was $123,600 and GST was $12,360. Accordingly, Monster Rigs charged the plaintiff $234,000 plus GST but was paid $123,000 plus GST by the plaintiff. Monster Rigs returned the KBR to the plaintiff’s depot at Redhead on 24 April 2018.

13. The plaintiff asks me to accept that from 24 April 2018, Messrs Baker and Muadin worked on the KBR (and, indeed, prior to 24 April 2018). Mr Baker’s affidavit contains this averment:

“54. Due to the extensive nature of the damage, repairs to the Kelly Bar Rig were only completed so that it was available again for hire on or around 28 June 2018. In total, the Kelly Bar Rig was not able to be hired at all and during that time between 17 January 2018 and 28 June 2018, no income was able to be generated by the Kelly Bar Rig at all.”

The KBR’s (Book) Value

14. As stated in [4] above, the contract for the sale of the business valued the company’s equipment at $190,000. The plaintiff’s Depreciation Schedule for the year ended 30 June 2018 assigned these values to that equipment on purchase:

KBR	$90,211
CFA	$99,702
Excavator and Pump	$82
190,000

As at 30 June 2017 the KBR was valued down to $85,529. As at 30 June 2018 i.e. after it became available on about 28 June 2018, its opening value was said to be $77,384 and it was then depreciated by $23,215 to have a “Closing Value” of $54,169. As at 30 June 2019 it was further depreciated by $16,251 to have a “Closing Value" of $37,918.

15. Nevertheless, the plaintiff sold the KBR on 9 July 2021 for $170,000 inclusive of GST, a base of $154,545. What the depreciated value of the KBR was at 30 June 2020 and 30 June 2021, the evidence does not disclose. However, in light of the sale price as at 9 July 2021, the value of the KBR in the plaintiff’s books could not possibly be true considering that it was theoretically purchased on 9 January 2017 for $90,211 but on 9 July 2021, 4.5 years later, was sold for $170,000.

The Defendant’s First Contention

16. The defendant’s first contention is that the Court would only allow to the plaintiff the value of the KBR before it was damaged, less any value it had after it was damaged (if any) rather than the cost of its being repaired. The defendant’s written submissions contain this:

“32. First, applying the usual measure of damages, the plaintiff would be entitled to the arrived sound market value of the Kelly Bar Rig, less the damaged value, not the costs of repairs. The only reliable evidence of the arrived sound market value of the Kelly Bar Rig is the purchase price of $90,211. Assuming that the arrived damaged value was $0.00, then the most the plaintiff could obtain would be $90,211.

33. Secondly, there is no good reason to depart from the usual measure of damages in preference for the costs of repairs. This is especially where the costs of repairs are said to exceed the arrived sound market value. In that setting, it would be contrary to principle and common sense for the plaintiff to be awarded the costs of repairs. It would not put the plaintiff back in the same position as if the contract of carriage had been performed.”

17. In Darbishire v Warran [1963] 1 WLR 1067; [1963] EWCA Civ 2; [1963] 3 All ER 310, Harman LJ said this:

“The law of damages arising out of collisions on land has been developed out of the Admiralty rule on collisions at sea and the rule of liability is the same in Admiralty and common law cases - see lord Dunedin's speech in The Susquehanna(1926 Appeal Cases, p.655, at p.661). The principle is that of restitutio in integrum, that is to say to put the plaintiff in the same position as though the damage had not happened. It has come to be settled that in general the measure of damage is the cost of repairing the damaged article; but there is an exception if it can be proved that the cost of repairs greatly exceeds the value in the market of the damaged article. This arises out of the plaintiff's duty to minimise his damages. Were it otherwise it would be more profitable to destroy the plaintiff's article than to damage it. In the latter cases the measure is the value of the article in the market and this, of course, supposes that there is a market in which the article can be bought. If there is none, then the cost of repairs may still be claimed. This appears from J. & E. Hall Ltd. v. Barclay (1937, 3 All England Reports, p.620) where it was held that the appellant was entitled to the value of the articles converted which was ordinarily the price of similar articles in the market. As there was no market in the articles concerned, the measure of damages was the cost of replacement. That was a case of conversion but the principle applies. Lord Justice Greer said this at page 623:

"In my judgment it is an undoubted fact that there are two rules with which we begin in ascertaining how the damage should be ascertained. The first is this: A plaintiff who is suffering from a wrong committed by a defendant is entitled, so far as money can do it, to be put into the same position as if he had not suffered that wrong. That is what is referred to as restitutio in integrum. The second principle which is accepted is that what he is entitled to, as damages for conversion or detention in respect of the article so detained or converted and not returned, is the value of that article. 'Then the question is, what is the meaning of 'the value of that article'? Where you are dealing with goods which can be readily bought in the market, a man whose rights have been interfered with is never entitled to more than what he would have to pay to buy a similar article in the market. That rule has been acted upon over and over again, and that, I think, means that, where there is a market, the man whose rights have been interfered with is bound to diminish the damages by going into the market and buying the goods in the market, so as to put himself in the position in which he is entitled to be put, namely, the position in which he would have been if he had not suffered any wrong at all; and, in my judgment, the case to which our attention had been called of Banco de Portugal v. Waterlow & Sons, Ltd, has really nothing to do with the question that we have to decide here, except in so far as I think it supports the view which I have been expressing".

He there decided that as the article in that particular case was one for which there was no market and which you could not buy in the market, the loser was entitled to have it replaced.

The Judge here held that the plaintiff was reasonable in having the car repaired notwithstanding that the cost was more than twice the value. It may well be that the plaintiff, so far as he himself was concerned, did act reasonably and that what he got was of more value to him than the damages represented by the value of the car. The plaintiff, however, did not show that he had any special use for which this car alone was suitable, as, for instance, in his business, or anything more than that it was a sound car very well maintained and suited to his ordinary life. In my opinion the Judge asked himself the wrong question. The true question was whether the plaintiff acted reasonably as between himself and the defendant and in view of his duty to mitigate the damages. The evidence was that a Lea Francis 1951 car might be difficult to find but that other similar estate cars were on the market and could be had for between £85 and £100 which the plaintiff himself stated to be the value of his car. The learned Judge relied on the case of O'Grady v. Westminster Scaffolding Ltd. (1962, 2 Lloyds List Reports, p.238) where the learned Judge held the plaintiff entitled to the cost of repairing his car at a cost considerably exceeding its market value. This case, of course, is not binding on us but if it be right it may be supported perhaps on the ground that the car there in question was unique and could not be replaced. It was a remarkable vehicle having been supplied by the plaintiff, the apple of whose eye it was, with no less than three new engines, a new body and other replacements. In my judgment the facts are very different from those in the present case.

Our attention was also drawn to a case in the Court of Session, Pomphrey v. James A.Cuthbertson Ltd. (1951 Session Gases, p.147). That case went off on a point of pleading and the plaintiff in fact asserted a new measure of damages in that he went into the market and bought a new car, the cost of which he claimed against the defendant together with the cost of adapting it upon the footing that this was in fact cheaper for the defendant than the cost of repairs would have been. Nevertheless the Court delivered itself of the following opinion. At the end of the headnote you will find this:

"Opinions that, on the footing that the damaged car was a constructive total loss, the true measure of damages was its market value at the date of the collision plus the cost of hiring a substitute until a new car could be procured and made ready for use, less the 'scrap value' of the damaged car",

so that the decision, such as it was, is in the defendant's favour.

To the same effect is the decision in The Minnehaha(6 Lloyds List Reports, p.12), an Admiralty case where the Master of the Rolls, Lord Sterndale, said this:

"That applies to a matter between assurer and assured, but it is a convenient way of stating the question because unless there is some circumstance to justify him the shipowner does not act reasonably in repairing the ship if the repaired value is very much less than the cost of repairing her. Prima facie that is not reasonable. It may be shown to be reasonable if there are certain special circumstances which make the ship of such great value to him that it is better for him and reasonable to spend a very much larger sum than her repaired value. But it requires some special circumstances to show that, because what lies at the bottom of taking the repair value in a case of this kind is that it is assumed that the owner can go into the market and replace his ship at that value. If he car, satisfy the tribunal that he cannot be replaced in the position in which he was before the collision by being paid the repair value of the ship, because he cannot replace the ship and cannot buy another in the market, that is another matter, but unless he can show these two points he is not acting reasonably in spending this very large sum".”

18. In Zogiannis v Stevens [2012] VSC 264, Davis J said this:

“[6]  It is trite law that when goods are damaged by the negligence of a tortfeasor, the owner of the goods suffers an immediate and direct loss in consequence of the damage sustained and a cause of action accrues to the owner to recover that loss. The basic pecuniary loss recoverable by an owner in that circumstance is the diminution in the value of the damaged goods, on the principle that the owner is entitled to be put back, so far as money can do it, into the same position as if the damage had not occurred.

[7]  In the case of negligent damage to a car, the authorities establish that if the car is wrecked completely as the result of the collision, the loss that the owner is entitled to recover from the tortfeasor will normally be measured by the cost of replacing the car with another car of comparable type and condition, with an allowance in favour of the tortfeasor for the value of the car in its damaged condition. If the car is repairable, the measure of loss will usually be the costs of repair but if the costs of repair exceed, or would exceed, the market value of the car, a question arises as to whether it is reasonable for the owner to incur the expenditure in repairing the car or whether the reasonable option is to replace the car. Ordinarily, the owner can recover the cost of repairs or the value of the car, whichever is the less. In each case, the onus is on the owner to satisfy the court on the evidence as to which of the measures of damages is reasonable in the circumstances and as to the amount of damages to which the owner is entitled by the application of that method.”

19. In Palmer on Bailment, 3^rd Ed., 2009 [16-046] is this:

“16-046 A common case is that of damage to customers’ goods. The amount of recoverable compensation is usually measured in one of two ways. The first is to take the market value of the goods in an undamaged state and to compare it with its value in a damaged state. The second is to take the cost of repair or reinstatement. The measure that:

“…is appropriate will depend on a number of factors, such as the plaintiff’s future intentions as to the use of the property and the reasonableness of those intentions”.²⁹⁵

In the case of goods or things damaged but commonly available, the appropriate measure is the first on the assumption that customers with defective goods will sell them (at less than the price of undamaged goods) and recover the difference in value as damages from the carrier. If the goods are not commonly available, however, and thus cannot be replaced on the market, compensation may be the cost of repair, unless the cost of that is so great as to be unreasonable.²⁹⁶

Another common case is loss of market. Regular carriers know (or should know) when the goods are intended for a market and that late delivery will cause the goods to miss that market, for example a Christmas market²⁹⁸ or regular but periodic livestock market.²⁹⁸ Even if the market is continuous and the customer can show that the delay caused the goods to miss a peak in the market, the carrier may be liable.²⁹⁹ Possible but rather less common is carrier liability in the superficially similar case of customers not being able to use goods at destination so that, for example, there is a loss of production at a customer’s factory there.³⁰⁰”

The authorities cited in footnote 296 are Ruxley Electronics Ltd v Forsyth [1996] 1 AC 344 and East Ham Corp v Bernard Sunley & Sons Ltd [1966] AC 406.

20. I cannot accede to this contention. To use terminology used by Harmm LJ in Darbishire v Warran (supra), relying on JQE Hall Ltd v Barclay [1937] 3 All ER 620, there was no “market” available for KBRs, or, to use terminology from Palmer on Bailment (supra), KBRs were not goods commonly available. The KBR had the base of a Japanese Komatsu PC 120-6 hydraulic excavator. A brochure regarding this piece of equipment is annexure D to Exhibit A commencing at Court Book 78. That piece of equipment was provided with a Backhoe Bucket and Arm combination but neither of those attachments were used on the KBR. Instead it was fitted with a Brazilian Clo Zironi rotary drilling rig. There is no suggestion that the like equipment was available in any market in Australia. The inference to be drawn from the Monster Rigs quotation at [11] above is that it would take 6 months to find and/or build a new replacement rig for $475,000; a replacement with a second hand base and a new mast would cost $336,000 (and would have to wait for a new mast to arrive from Brazil, and the lesser cost was repairs of $234,000. Repairing was the obvious way for the plaintiff to mitigate its loss. If the plaintiff adopted either Option 1 proposed by Monster Rigs or Option 2, it would be open to the defendant to argue that plaintiff had failed to mitigate its loss. Furthermore, the plaintiff had available to it the repaired KBR from at least 28 June 2018 until 9 July 2021, for 3 years and then sold it for $170,000. In these circumstances the defendant’s submission, that “the only reliable evidence of the … market value” of the KBR was its book purchase price of $90,211, cannot be supported.

21. In making that finding, I have not overlooked this evidence given by Mr Baker in his first affidavit:

“48. …. I estimate that the replacement value of an equivalent Kelly Bar Rig at the time of the Incident was approximately $200,000.00 and a replacement machine with the same capabilities to perform equivalent tasks I would expect to have costed approximately $550,000.00 if it was purchased brand new. The above estimates are based on my extensive knowledge of the prices of rigs based on my experience, during which I have regularly searched online for comparable pieces of equipment. For instance online advertisements showing the current prices of new and second-hand drilling rigs similar to the Kelly Bar Rig that I have been able to obtain are:

(d) “constructionsales.com.au”, which is exhibited at SB1:110.

(e) “machines4u.com.au”, which is exhibited at SB1:111-114.

(f) “gumtree.com.au”, which is exhibited at SB1:115.

If the machine were to be purchased and manufactured in Australia, the lead time involved in purchasing a replacement Kelly Bar Rig would at that time have been no less than 6 months. If a replacement machine were to be manufactured overseas and imported, the lead time would have been a minimum of approximately 12 months. A Class did not have the time or capital to acquire a new or replacement machine after the Incident and that is why Morrad and I made the decision to try and rectify it as quickly as possible.”

I have not relied on Mr Baker’s measurements of value as he has not really qualified himself as an expert and, for example, his estimate of the cost of a new replacement ($550,000) was much greater than that of Mr Goodman of Monster Rigs ($475,000).

22. Of greater interest/informative value is the material downloaded by Mr Baker. He does not say when but the downloads from the second and third sites refer to equipment manufactured in 2023. That leads me to assume that the downloads were made shortly before Mr Baker prepared his affidavit which was sworn on 29 July 2023. The download from the first site “constructionsales.com.au” shows two drilling rigs but does not state whether they are rotary drilling rigs or CFA Rigs: the first is described as a 2011 MAIT HR120 on sale for $450,000 plus government charges. The second is described as a 2015 MAIT HR 100 Low Head on sale for $325,000 plus government charges. The download from the second site “machines4u.com.au” describes 4 machines but the second of them is a CFA drilling rig, which I shall overlook. The remaining machines are:

(i) 2023 UHI XR240E 70M Multi-Function Rotary Drilling Rig, priced at $1,100,000 plus GST.

(ii) 2023 UHI XR80E 24M Rotary Drilling Rig priced at $450,000 plus GST.

(iv) 2023 UHI XR 240E 70M Multi-Function Rotary Drilling Rig, priced, against at $1,100,000 plus GST.

The download from “gumtree.com.au” describes two rotary drilling rigs. The first is a 2023 UHI XR 240E 70M Multi Function Drilling Rig priced at $1,210,000 i.e. the same as machines described at (i) and (iv) above. The second is a 2023 UHI XR 80E 24M Rotary Drilling Rig priced at “$495,000 Negotiable” i.e. the same as the machine described at (iii) above. It appears to me that only the download from the first site might be relevant but, again, I do not know if these are rotary drilling rigs.

Work said to have been done by Messrs Baker and Muadin

(a) Can plaintiff claim for wages paid?

23. After providing his estimate of the value of the KBR, Mr Baker said this in his first affidavit:

“49. To save downtime and further costs, Morrad and I attempted to rebuild part of the written off Kelly Bar Rig ourselves to assist Monster Rigs, who could not source a suitable replacement base. We sourced, built and repaired replacement parts for the body structure, track frame, rams and tower as the damage was extensive. Morrad and I attended to making telephone calls to sellers or by searching online at the websites referred to above both in Australia and overseas to source replacement parts for the damaged Kelly Bar Rig. From 17 January 2018 to approximately 30 June 2018, Morrad and I put in 11-hour days for 68 non-consecutive days, working around our other CFA jobs, to assist with the rebuild of the Kelly Bar Rig. No other labourers were used to assist with the rebuild.

50. Exhibited at SB1:116 is a copy of an image I had taken from the 2018 Whiteboard Diary that A Class used to schedule its appointments. The 2018 Whiteboard Diary was also used to record the following dates that Morrad and I were involved in rebuilding the Kelly Bar Rig and whether that was done at Monster Rigs, or after the Kelly Bar Rig was delivered back to our workshop in Redhead, as follows:

Day 1	17 January 2018	Kelly Bar (Goodmans)
Day 2	19 January 2018	Kelly Bar
Day 3	22 January 2018	Kelly Bar (Goodman)
Day 4	29 January 2018	Kelly Bar (Goodman)
Day 5	30 January 2018	Kelly Bar (Goodman)
Day 6	31 January 2018	Kelly Bar (Goodman)
Day 7	1 February 2018	Kelly Bar (Goodman)
Day 8	2 February 2018	Kelly Bar (Goodman)
Day 9	15 February 2018	Kelly Bar
Day 10	19 February 2018	Kelly Bar (Goodman)
Day 11	20 February 2018	Kelly Bar (Goodman)
Day 12	21 February 2018	Kelly Bar (Goodman)
Day 13	26 February 2018	Kelly Bar (Goodman)
Day 14	27 February 2018	Kelly Bar (Goodman)
Day 15	28 February 2018	Kelly Bar
Day 16	1 March 2018	Kelly Bar (Goodman)
Day 17	6 March 2018	Kelly Bar (Goodman)
Day 18	7 March 2018	Kelly Bar
Day 19	8 March 2018	Kelly Bar
Day 20	12 March 2018	Kelly Bar
Day 21	13 March 2018	Kelly Bar
Day 22	15 March 2018	Kelly Bar
Day 23	16 March 2018	Kelly Bar
Day 24	21 March 2018	Kelly Bar
Day 25	22 March 2018	Kelly Bar
Day 26	23 March 2018	Kelly Bar
Day 27	27 March 2018	Kelly Bar (Goodman)
Day 28	28 March 2018	Kelly Bar
Day 29	29 March 2018	Kelly Bar
Day 30	30 March 2018	Kelly Bar
Day 31	3 January 2018	Kelly Bar (Goodman)
Day 32	4 April 2018	Kelly Bar
Day 33	5 April 2018	Kelly Bar
Day 34	6 April 2018	Kelly Bar
Day 35	7 April 2018	Kelly Bar
Day 36	9 April 2018	Kelly Bar
Day 37	12 April 2018	Kelly Bar
Day 38	13 April 2018	Kelly Bar
Day 39	14 April 2018	Kelly Bar
Day 40	17 April 2018	Kelly Bar
Day 41	18 April 2018	Kelly Bar
Day 42	19 April 2018	Kelly Bar
Day 43	20 April 2018	Kelly Bar
Day 44	21 April 2018	Kelly Bar
Day 45	23 April 2018	Kelly Bar
Day 46	24 April 2018	Kelly Bar (Back to Redhead)
Day 47	25 April 2018	Kelly Bar
Day 48	26 April 2018	Kelly Bar
Day 49	27 April 2018	Kelly Bar
Day 50	28 April 2018	Kelly Bar (Redhead)
Day 51	30 April 2018	Kelly Bar (Redhead)
Day 52	1 May 2018	Kelly Bar
Day 53	2 May 2018	Kelly Bar
Day 54	3 May 2018	Kelly Bar (Redhead)
Day 55	4 May 2018	Kelly Bar
Day 56	5 May 2018	Kelly Bar (Redhead)
Day 57	7 May 2018	Kelly Bar
Day 58	9 May 2018	Kelly Bar
Day 59	12 May 2015	Kelly Bar (Redhead)
Day 60	13 May 2018	Kelly Bar
Day 61	19 May 2018	Kelly Bar
Day 62	20 May 2018	Kelly Bar
Day 63	21 May 2018	Kelly Bar (Redhead)
Day 64	22 May 2018	Kelly Bar (Redhead)
Day 65	25 May 2018	Kelly Bar (Redhead)
Day 66	26 May 2018	Kelly Bar (Redhead)
Day 67	27 May 2018	Kelly Bar (Redhead)
Day 68	2 June 2018	Kelly Bar (Redhead)

51. From the above dates, I estimate that Morrad and I were involved in no less than approximately 1,496 hours in assisting with rebuilding the Kelly Bar Rig. During this time, we were not able to work on jobs in the business and draw the usual wage of $35.04 per hour whilst we were completing repairs. Accordingly, I estimate that a total of 1,496 labour hours at a rate of $35.04 per hour was a direct cost to our business, which equates to a total cost of $52,419.00 in our labour time to rebuild the Kelly Bar Rig.”

This evidence has been vigorously contested.

24. To understand this claim it is necessary to understand aspects of the plaintiff’s usual business practice and the status of Messrs Baker and Muadin as far as the actual work they do for the plaintiff. On this first aspect Mr Baker said this in his first affidavit:

“Usual Business Practice

29. A Class’s usual business practice has at all material times been as follows. It has 2 rigs for hire to customers, which each require one operator and one offsider (Hiring Services). Morrad and I are the only operator and offsider for each job. Therefore, when one rig is being used for a job, the other rig would not be able to be used simultaneously as they would both require the labour of the two people.

30. The duration of Hiring Services involving the Kelly Bar Rig varies depending on the material and size of each job.

31. A Class charges for the use of the Kelly Bar Rig based on the nature of the job that it is required for. When we are working on a large site where delays are expected, the Kelly Bar Rig (or any other machine that is required for that job) will be charged out as daily hire. For example, if the specific Geotech report is inconclusive in that the ground is only tested to two metres deep when the client requires drilling up to 6 metres deep, we would charge this out as daily hire as we do not know what is beyond two metres deep. If the Geotech report shows that the job can be done efficiently, we will charge this out as a lineal metre rate of drilling.

……

33. For each job, A Class is required to provide a quote and submit details that are required for the job, such as the diameter of the pile to be drilled and the depth of that pile, for tender documents. We then have an initial site inspection to discuss any issues and we advise our suggested course of action to the client. It may be necessary to have a secondary site inspection to cover off before we start drilling. We then prepare the machinery for the specific site we are attending, which includes swapping augers and completing pre-site maintenance. This usually takes one to two days. Depending on the sire, it willtake us one to three days to transport the machinery and another full day to setup.

34. Once the piling and drilling work is complete, it will usually take us between one to three days to pack down and transport the rig back to our depot. We then complete post drill maintenance and wash down the rig, which usually takes one to three days depending on the maintenance that needs to be completed.

35. However, A Class prepares its invoices to its clients to include only the physical dates that we actually perform drilling on site, which we then label as ‘DRILLING’ on the invoice. If we drill for three days, the job timeframe may in fact take up to two weeks. Hence, there are many days where the piling and drilling is not being undertaken, but preparatory or finishing work for the particular project is still required. However, the only time that is recorded and generally appears on our invoices is the piling and drilling days.”

25. The inference to be drawn from [51] of that affidavit quoted in [23] above is that not only were Messrs Baker & Muadin directors and shareholders of the plaintiff but also its employees. The evidence only speaks of three people working for the plaintiff: Mr Baker, Mr Muadin and Mrs Julie Randell (“Admin”). The plaintiff’s Business Activity Statements annexed to Mr Baker’s first affidavit show this:

Year	Quarter	Total Salary/Wages	PAYG Tax withheld
2017	1	$33,280	$7,280
2	73,280	$17,280
3	$33,280	$7,280
4	$33,280	$7,280
2018	1	$30,720	$6,720
2	$77,280	$21,976
3	$43,492	$10,790
4	$46,838	$11,620
2019	1	$36,132	$8,574
2	$26,095	$4,784
3	$28,102	$5,152

BAS's after 30 June 2019 are monthly and only extend to 30 September 2019, but I have collated the 3 last BASs to compile this table. If these sums be correct, the annual wages bill for 2017 was $173,120, for 2018 was $198,330 and, if one allows the average of the first three quarters of 2019 for the last quarter of that year, the annual wages bill for 2019 was $120,439. Mrs Randell was living with her husband in Laurieton and was not a fulltime employee and may have only done a small amount of “Admin”. These figures confirm, in my opinion, that the company was paying wages to both Mr Baker and Mr Muadin.

26. When piling or drilling work was available for the plaintiff during the period from 17 January to 28 June 2018 it was attended to by Messrs Baker and Muadin. When no such work was available, rather than be idle, they worked, they say, on the KBR for much of that time. The plaintiff now claims the cost of their labour. This raises, firstly, an “industrial” issue.

27. At common law, the primary obligation of an employer is to pay to his employee the remuneration agreed between them provided it is not lower than any stipulated by or under Statute law. However, at common law there is no generally implied term obliging the employer to provide work to his employee. In Collier v Sunday Referee Publishing Co. Ltd [1940] 2 KB 647; [1940] 4 All ER 234, Asquith J said (at All ER 236):

“It is true that a contract of employment does not necessarily, or perhaps normally, oblige the master to provide the servant with work. Provided that I pay my cook her wages, regularly, she cannot complain if I choose to take any or all of my meals out. In some exceptional cases there is an obligation to provide work – where, for instance, the servant is remunerated by commission, or where (as in the case of an actor or singer) the servant bargains, among other things, for publicity: see Marbe v George Edwardes (Daly’s Theatre) Ltd [1928] 1 KB 269. Such cases are, however, anomalous, and the normal role is illustrated by such cases as Lagerwall v Wilkinson, Henderson & Clarke Ltd (1899) 80 LT 55 and Turner v Sawdon & Co [1901] 2 KB 653, where the plaintiffs – commercial traveller and a salesman respectively, retained for a fixed period and remunerated by salary – were held to have no legal complaint so long as the salary continued to be paid, notwithstanding that, owing to the action of their respective employers, they were left with nothing to do. The employer was not bound to provide work to enable the employee to “keep his hand in,” avoid the reproach of idleness, or even make a profit out of travelling allowance. In such a case there is no breach of contract…..”

In Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 Dixon J (as he then was) said at 466:

“….wages are incident to the subsisting relationship of master and servant. A master who sends his servant upon a holiday upon full pay can be sued for wages under the contract, although not on a common money count for work and labour done. They also serve who only stand and wait.”

28. There is a dictum criticising this line of authority given by Callinan and Heydon JJ in Blackadder v Ramsey Butchering Services Pty Ltd (2005) 221 CLR 539 at [80] but I know of no authority overruling this established principle of the common law, but the issue which concerned their Honours does not directly arise in this case as Messrs Baker and Muadin claim to have worked on their employer’s damaged equipment. They were not required to stand idle. That may have occurred if the plaintiff could not find any work. Since the plaintiff was required to pay wages to its employees in any event, it is not open to it to claim those wages from the defendant. What the plaintiff can do is claim from the defendant its loss of profit, which it does. To claim both is, in my view, a form of double counting.

(b) When the KBR was in Monster Rigs’ yard

29. The KBR was in Monster Rigs’ yard from Wednesday, 17 January 2018 until it was sent back to the plaintiff’s depot on Tuesday, 24 April 2018, a total period of 97 days. This included 15 weekends, Australia Day (a Friday), Good Friday (30 March) and Easter Monday (2 April), 33 days on which industrial work is not normally done. The plaintiff claims as work days, Good Friday (30 March) and three Saturdays (7, 14 and 21 April). This raises a number of questions:

1. Was Monster Rigs’ yard open on Good Friday and on Saturdays?

2. When Monster Rigs’ yard was open – for how long was it open?

3. Do the 11 hours claimed per diem include travelling time? The distance between the plaintiff’s depot at Redhead (near which both Mr Baker and Mr Muadin lived) and the Monster Rigs yard at Ketch Close, Fountaindale is 61 kilometres with a travel time of 59 minutes. If the 11 hours does not include travel time, the plaintiff claims that its employees were engaged for 13 hours each day! (see T37).

4. Did Monster Rigs allow customers to do work on their own equipment when it had been bailed to Monster Rigs to repair?

None of these issues was addressed in the evidence, although there is some evidence relating to (iv).

30. It appears to me to be highly unlikely that any actual repair work was done by either Mr Baker or Mr Muadin until after the damaged KBR was assessed by Mr Goodman and his issue of the Damage Report of 21 January 2018 – see [11] above. That rules out the claims for 17 and 19 January 2018. Mr Baker said this in his first affidavit:

“43. On or about 17 January 2018, I attended Monster Rigs, which was the day it was float transported there after the accident. The Kelly Bar Rig had not been pulled apart on this day. My observations were that the Kelly Bar Rig had sustained significant damage, consisting of damage to the machine chassis undercarriage, along with significant damage of up to 90% of facia and structural components. Exhibited at SB1:103 is an image from the Monster Rigs website of when the Kelly Bar Rig as first transported to it after the incident.

44. I spoke with David Goodman, a representative of Monster Rigs, and we had a conversation with words to the following effect:

I said:      “How long do you think it will take to repair the Kelly Bar Rig?”

He said:   “There is quite a lot of damage, so at present I would estimate it may take about 8 weeks.”

45. Mr Goodman then provided a Damage Report and Repair Quotation prepared by Monster Rigs dated 21 January 2018. Which is exhibited at SB1:104-105. When I read the Damage Report and Repair Quotation, I noted that it provided for 3 options for replacement or repair, of which the recommended option was Option 3, repair.”

This passage of evidence was drawn to Mr Baker’s attention in cross-examination and also the substance of Mr Goodman’s assessment and this evidence was then given:

“Q. Now, to make that assessment, he would have had to have had a pretty good look over the machinery. Correct?

A. Yes.

Q. May I assume therefore that between when the rig arrived there at Monster Rigs on the 17th and when he provided you with this quotation, he would have had time to inspect and make some assessment of the various costs involved--

A. Yeah.

Q. --and also would have had to call the insurance advisors, right? Do you see that?

A. Yeah, that's correct. If you go back to--

Q. During all those times, we assume therefore that between 18 and 21 January, the machine was at Monster Rigs being looked at Mr Goodman?

A. Yes, that's correct.

…..

Q. You see there, the second date on page 28 is 19 January?

A. Yes, that's correct.

Q. But that's when it would have been being inspected or being looked over by Mr Goodman at Monster Rigs?

A. Would've been, yes. Yes, that's correct. So, I think if you go back to page 143, we were actually down there as the rig was getting lifted off by the crane and you can tell that it's how you mention before about it would take a fair bit to inspect but as you can tell by that photo which isn't the best photo either, it's pretty bent and buckled. So, it, it didn't take a great--

Q. When you look at, for example, option 3, repairs and he lists what he thought was necessary, new mask tube, crack test and repair where required, gearbox dismount checked, reassemble, remount. You see all that?

A. Yes, that's - yeah.

Q. He had a good look over it?

A. Well, yeah. Like I said, it was that bent and buckled that you could tell just from looking at it that it was - needed extensive - a lot of repairs and the thing that - like, the whole way through this, we've always taken a cheaper - cheapest and quickest exercises to get it back up and running, and yeah.”

31. I have no hesitation in rejecting the claim that Mr Baker did 11 hours work on the KBR on Good Friday, 30 March 2018. Exhibit 1 is a copy of an Instagram post made by Mr Baker on that day. It appears to have been taken at sunset. It is of an offroad motorcycle, “dirt bike”, of an installation at the side of a road announcing “Lightning Ridge – Black Opal Country.” There are two announcements made by Mr Baker:

“Lightning Ridge, New South Wales

Australia Easter on the west side.”

The next comment is made by Mr Morrad Muadin:

“Luv me 4 strokes”,

which is likely to be a comment on the size of the engine of the dirt bike. The next comment was made by one of Mr Baker’s “best mates”:

“Nice ride baz [one of Mr Baker’s nicknames]! KTM for life…”

KTM was the brand of the dirt bike. When cross-examined about this, one answer given by Mr Baker was this:

“Q:   But all of this points to your being up at Lightning Ridge on 30 March 2018, doesn’t it?

A:   Yeah, well that’s how it appears, yes.”

The distance between Redhead and Lightning Ridge is 650 kilometres and the travel time is 7 hours and 30minutes. No claim is made for 31 March, 1 April (Easter Day) or 2 April (Easter Monday). It seems highly likely that Mr Baker spent his Easter holiday period at Lightning Ridge, driving up there on Good Friday.

32. Claims are also made for Friday 13 April and Saturday 14 April 2018. Between Friday, 13 April and Sunday. 15 April 2018 the Diesel, Dirt and Turf Expo was held at Penrith. On Friday, 13 April Mr Baker posted on Instagram photographs of the plaintiff’s Kobelco CFA Drill, purchased in January 2018, on display at this Expo. The Instagram post came with this caption:

“Stoked to have our Kobelco Drill Rig front row this weekend at the Sydney Diesel Dirt and Turf Expo #AClassPilingandDrilling #monsterigs Thanks #KobelcoAustralia”

According to Mr Baker, Kobelco, a drill manufacturer, approached Monster Rigs to obtain one of its own machines and exhibit such a machine at the Expo and that was arranged. The plaintiff’s drill was Kobelco’s exhibit – but it also gave some free publicity to the plaintiff. Mr Baker admitted that he and Mr Muadin had attended the Expo but “we just walked around for probably an hour or so” and “it wasn’t too long”. A little later he said in further cross-examination:

“we were lucky enough to get the promotion out of it really, but as for us being there, and we’re not ones to be there and try and talk to people about it, or anything like that. We just went down to kind of see it on the ground and that was it, yes.”

33. However, the trip to the Expo was two hours each way. This visit to Penrith would have absorbed at least half a day on Friday, 13 April, so I can not accept that 11 hours of that day, if any, were spent on repairing the KBR at Monster Rigs.

34. The last topic I discussed does point to a very well established relationship between Messrs Baker and Muadin and Mr Goodman of Monster Rigs. It is possible that he permitted them to do some work on the KBR when it was in his yard to allow the plaintiff to save some money. Paragraph 52 of Mr Baker’s first affidavit lists copies of tax invoices for “interim repair works” carried out on the KBR and replacement parts. There are 32 tax invoices (identified by letters) between 22 January and 27 June 2022. The first 21 of those invoices are dated between 22 January and 9 April 2018. The next invoice is dated 24 April 2018, the day on which the KBR was returned to the plaintiff’s depot. There was no challenge about any of the first 21 tax invoices. They, not having been challenged, are evidence that the plaintiff’s employees were doing some work on the KBR when it was in Monster Rigs’ premises.

(c) Between 24 April and 2 June 2018

35. During this period, wages are claimed for 22 days. These days include Anzac Day (25 April), 5 Saturdays and 3 Sundays. The evidence persuades me that Mr Baker did not work on at least 2 of those days, a weekend which is likely to have been Saturday 19 May and Sunday, 20 May. Mr Baker was cross-examined about an Instagram post made on 21 May 2018. It became Exhibit 3, Mr Baker labelled it “fishing”. It depicts him from behind aiming a rifle towards a creek or canal in bushland. He admitted that he was attending a “Buck’s show”, an event the same as a “Buck’s night’ held over a weekend in an area behind the Watagan Mountains which are west of Lake Macquarie:

“….he’s got a property, we went out there camping over the weekend and a fair few mates and had rally cars and all sorts of fun stuff.”

He went on to admit that his claim to have worked on that weekend, “might have been wrong.” If Mr Baker did not work on this weekend, then neither did Mr Maudin because only Mr Baker was a qualified mechanic. At T129.12 Mr Maudin admitted, “I’m not that mechanical” and also at T130.38, “I’m not that mechanical, no.”

(d) After 2 June 2018

36. During cross-examination, Mr Baker said that the first job on which the KBR was used after it was completed repaired was the “Whitebridge” job which commenced on 30 July 2018 but then added this (at T87.05):

“I don’t know if that was its first one back or there was one similar in Sydney I thought we took it to. But yeah, that was one of its first jobs back after the accident.”

This issue was addressed in re-examination (commencing at T109.17):

“Q. When you said about potentially another job earlier in Sydney, can you tell his Honour what job that was?

A. It was a job down in, in Sydney on a - I just remembered, it was a job in Sydney on a very busy road, sloping block. We took the Kelly bar there and, yeah, that obviously was the first one back.

HIS HONOUR

Q. Sydney, on a very busy road did you say?

A. Yeah. I just, I just forget whereabouts exactly. It was like Western Sydney somewhere.

Q. On a sloping block?

A. Yeah.

YOUNG

Q. Just orientate yourself by remembering that the last - I’ve told you about the 2 August - you’ve seen that 2 August entry.

A. Mm.

Q. You’ve seen that the last entry of work done on that schedule was 2 June.

A. Yep.

Q. Can you tell his Honour where over between those two dates roughly this job occurred?

A. Yeah, well - yeah, it’s so - like, it’s a long time ago obviously. But yeah, now with the - there was a job that we went to, that’s being the one I was trying - starting to explain, and we tried to utilise the drill rig and it ended up having a few little issues that prevented us from being able to complete the job, and after one day of trying to utilise the machine, we had to pull out of the machine and get another - Lance from up Port Macquarie and on the job to complete the job.

Q. Did you get paid anything for that job?

STREET: I object.

WITNESS: I - we virtually--

STREET: I object. Leading question, your Honour.

HIS HONOUR: No, I’ll allow it. You don’t do this sort of work for charity.

WITNESS: I just forget, but I’m pretty sure that we ended up--

HIS HONOUR

Q. You pulled out of the job after a day--

A. Yes, that's correct.

Q. --and you got what, another--

A. LTS Civil, Lance from Port Macquarie, he, he had a bigger soil neck that, yeah, obviously - like, we organised for him to come in so we didn’t stuff the client around, and he completed the project for us.

Q. You sort of sublet the contract?

A. Yes, we couldn’t complete it ourselves, so, yes, we got Lance in.

Q. Did you have to pay Lance?

A. Well, that was a pretty decent job, so Lance was obviously happy to come, in a way, take it over and we, we got nothing. We just virtually handed it to Lance and made nothing off it.

Q. Please answer my question. Did you pay Lance?

A. No.

Q. Who paid Lance?

A. Well, the, the builder.

Q. You say you were paid nothing for a day’s work?

A. Well, it’s a bit hard to make the, the builder - like if we’ve gone to the job and can't complete it on our fault, it’s a bit hard to charge. We had establishment fee to go there, but we had to wear that because of - we couldn’t complete the job, so, yeah. It’s not very nice to pass that on to the builder.”

37. Eventually, an invoice relating to this job was tendered and became Exhibit H. The job was not in the western suburbs of Sydney, but was on President Avenue, Miranda, a suburb in the Sutherland Shire. The invoice was for the cost of “Mobilisation” of the KBR on 6 June 2018 from the plaintiff’s depot to the site for $5,500 plus GST. The invoice is dated 3 June 2018 and was due to be paid by 5 June 2018. After the exhibit was introduced, the following occurred:

“HIS HONOUR

Q. Is this the job that you told me was in western Sydney?

A. Yeah, yes, that's the one.

Q. Well I can assure you that President Avenue, Miranda is in the Sutherland Shire; it's south of Sydney?

YOUNG: I think he said "May have been in western Sydney"--

WITNESS: Yeah, I'm not--

YOUNG: --it was on a slope and there are parts of Miranda on a slope, your Honour.

WITNESS: I'm not really up with Sydney.

HIS HONOUR: Growing up, I lived in a street which is parallel to President Avenue and directly north of it, so I'm very familiar with President Avenue, Miranda. And I know the slopes he's talking about. It goes down a big slope from Kiora Road down to Ewey Creek then up the hill again to Miranda Road then down the hill towards the Camellia Gardens. So it's slopey everywhere.

Q. But anyway, you said you didn't get paid for this but you rendered an invoice--

A. Yeah--

Q. --and got paid for it?

A. --well that's correct. So at - this would have been, like, we didn't get paid for the actual work that took place because there was no real work, but this is for the float and the machine which, yeah, I didn't realise that we got covered for the machine to go there, but - because this invoice is normally paid prior to getting us there, so before we rock up and then, yeah, obviously we rock up and then, yeah. Couldn't do the job.”

38. I accept Mr Baker’s evidence about his job at Miranda. President Avenue is a very busy road, one of the three major east-west arteries of the Sutherland Shire. Clearly the KBR still needed more work to be done on it, work to fix the “few little issues” that remained. Yet neither the affidavit of Mr Baker nor that of Mr Muadin, nor the “Perpetual Year Planner” or “whiteboard” on which Mr Muadin is said to have recorded when work was done on the KBR record this job.

Reliability of Evidence of work alleged to have been done by Messrs Baker and Muadin

39. From the matters I have canvassed between [29] and [38] above I have concluded that the list of days which Messrs Baker and Muadin set out in paragraph 50 of Mr Baker’s first Affidavit (Exhibit A) and the Perpetual Year Planner/2018 Whiteboard found at Court Book page 116 are quite unreliable. I suspect that work was said to have ceased on 2 June because Exhibit H is dated 3 June, and merely looking at Exhibit H, the KBR was “operational” on 6 June 2018, and the plaintiff had other work on 4 and 5 of June. That unreliability in this allegedly contemporaneous record is clearly seen in the other matters upon which Mr Baker was cross-examined. Its mere form as shown on Court Book page 116 obviously suggests it was written up at one time, and, from its failure to mention work after 6 June 2018, it is likely to have been written up a long time thereafter.

Material Supplied by Plaintiff to Repair KBR

40. At [52] of Exhibit A, Mr Baker sets out a table of 32 items, each an invoice, for what Mr Baker called “internal repair works” on the KBR. The total of those invoices is $4,330.96 (incl. GST). I have referred to this earlier at [34] above. The defendant’s expert Mr Richard Victor Ivey of Tremain Ivey Advisory, Forensic Accountants raised only 3 objections to this table. They are:

“1.   Two invoices from Bunnings each dated 27 June 2018 are after the period that the owners allegedly undertook repair work. Both invoices are for $250 of Bunnings gift cards and are annotated by hand with “giftcard 4 old mans help.”

2.   An invoice from Supercharge Auto for $99.45 (excluding GST) dated 19 June 2018, is after the period that the owners allegedly undertook repair work.

3.   Inclusion of a 600mL Pepsi ($3.26 excluding GST) on an invoice from Supercheap Auto dated 19 June 2018.”

As to 1 in this short list each set of $250 gift cards was a present for the fathers of Messrs Baker and Muadin for their assistance. Mr Young withdrew these claims. As to 3, the entire invoice from Supercheap Auto is in the Court Book (at page146) but does not contain an entry for the purchase of a 600mL bottle of Pepsi but a Supercheap invoice dated 9 February 2018 does. As to 2, I allow the claim bearing in mind my finding at [38] above. Accordingly, the sum claimed should be reduced by $503.95, being $500 charged by Bunnings for the gift cards and $3.95 for the Pepsi (incl. GST). That sum is $3,817.01 incl. GST or $3,479.10 (excl. GST).

41. The remaining item of material supplied by the plaintiff to repair the KBR is a table drive gearbox, provided by the plaintiff to Monster Rigs to use in the repairs carried out by Monster Rigs. In a letter addressed “To Whom it May Concern” dated 2 September 2018, on the plaintiff’s stationary, Mrs Julie Randell said this:

“The table drive gearbox that was given to Monster Rigs to assist with the rebuild was originally purchased when Morrad and Shannon bought the business 9 January 2017.

This table drive gearbox was part of the associated equipment that they purchased from A Class Piling and Drilling Pty Ltd ABN 33 083 034 628. This table drive gear box is valued at $31,500.”

This valuation of the gearbox is maintained by Mr Baker in [53] of Exhibit A. In his second affidavit sworn on 26 January 2024 (Exhibit C), Mr Baker sought to support this valuation with this evidence:

“17. In about August 2022, I made enquiries with a supplier in Birmingham, Alabama USA for the supply of 4 Char-Lynn Hydraulic Geroler Disc Valve Motors, which are a key component of the table drive gearbox: for the drive head set up to work you require 4 disc drive motors to make it operational.

18. Exhibited at SB2:5 is a copy of a Quote for a 112-1062 Motor | Char-Lynn Hydraulic Geroler Disc Valve Motor – 6000 from Motion in Birmingham, Alabama. I note the quote provides for a Unit price of $2,527.84 USD per motor and a total price for 4 motors of $10,111.36 USD. I also note the lead time for the delivery to Australia was “40 weeks”, which was approximately the same as the lead time estimates we received when making enquiries in 2018. I do not currently have a copy of those enquiries from 2018.

19. On 8 September 2022, Morrad sent an email enquiry to CZM, a company in Brazil, who I knew supplied parts for a table drive gearbox, specifically the rotary head, which is another key component of the table drive gearbox. To the best of my recollection, we made similar enquiries with CZM in about 2018, although I do not have a copy of those emails now.

20. Exhibited at SB2:6-15 is a copy of the email exchange Morrad had with representatives of CZM from 8 to 14 September 2022,. Seeking a quote to replace the drive motor on a Clo Zoroni CA35 drive motor for a 75mm square Kelly bar, which was the same fitted to the Kelly Bar Rig.

21. Exhibited at SB2:16-20 is a copy of the email exchange Morrad had with representatives of CZM from 20 to 26 October 2022, which included the quote for the rotary head EM240. I note that the quote from CZM to supply the rotary head EM240 was $45,000.00 USD.

22. Exhibited at SB2:21 is a copy of the email exchange Morrad received from CZM in about October 2022, which included the quote for the sea freight to Sydney from Brazil for $1,175.00 USD.”

42. The contract for the sale of the business to the plaintiff allowed $190,000 for equipment. The list of equipment referred to in the contract I have set out at [5] above. The plaintiff’s depreciation schedule for the year ending 30 June 2017 shows this:

Equipment at Cost
1	Continuous Flight Auger Drill Rig	99,707
2	Desktop Computer	2,899
3	Excavator and Pump on purchase	82
4	Kelly Bar Drill Rig	90,211
5	Shannon’s Toolbox Tray	5,455
198,354

Only items which I have numbered as 1,3 and 4 were then depreciated. As far as I can discern there was never any valuation of “Associated augers and drilling tools” referred to in the equipment which the plaintiff obtained from the vendor of the business, and certainly no valuation at any time of spare parts. In the depreciation schedule the plaintiff listed a desktop computer and a toolbox tray but not a spare gearbox which it now says was worth $31,500! One must assume that relevant evidence about the gearbox could have been given by Mr David Randell, who would have acquired the gearbox when he was conducting the business, as to when it was acquired, in what circumstances, how much he may have had to pay for it, or, for instance, if it were recovered from another piece or plant that was “written off.” However, he was not called, he swore no affidavit, and his absence is unexplained. Evidence about the gearbox could also have been given by Mr David Goodman of Monster Rigs to whom it was given by the plaintiff to use in the repair of the KBR: how rare was the gearbox, could he have found another in Australia, what was his view of its value, how old was it, what was its life expectancy and similar questions. However, he did not swear an affidavit, was not called to give evidence, and his absence is unexplained.

43. Mr Baker’s attempt to try to value the gearbox in Exhibit C is extremely belated: the gearbox was given to Monster Rigs to be used in the rebuilding of the KBR which was then returned to the plaintiff on 24 April 2018, yet enquiries seeking to justify the opinion that it was worth $31,500 were only recorded in the second half of 2022, over 4 years later. In cross-examination, Mr Baker gave hearsay evidence as to how the figure of $31,500 was arrived at, after stating his personal view that it was worth more than that sum:

“Q. The table drive gear box is not listed in your 2017 depreciation schedule, is it?

A. No, that's right.

Q. It's not listed as part of the valuable equipment that you bought with the business.

A. No, either is either - like, all the augers and we got a lot of associated equipment.

Q. It's not worth $31,500, is it?

A. Yes, it's worth a lot more actually.

Q. If it was then, it would have - sorry, it's worth more than that, do you say?

A. Yes, that's correct, if you look at the quotes that we got from Brazil.

Q. Don't worry about the quotes, just go to your page 32 of your affidavit.

A. Yep.

Q. You say there that it was valued at approximately $31,500?

A. Yes that's correct.

Q. You've acknowledged you don't have any valuation expertise?

A. Yes.

Q. You've now just said in the witness box that it's in fact worth more than what you put in your affidavit?

A. Yes, well that was - that figure come up with Dave Randell, the previous owner, that - and Dave Goodman in negotiations.

Q. I suggest to you that your evidence--

HIS HONOUR

Q. Sorry and is what you just said that that figure of $31,500 was provided by Mr Randell?

A. And Mr Goodman, yes, in conversation.

Q. And Mr Goodman. All right.

STREET: I object to that, it's hearsay your Honour. But--

HIS HONOUR: I know it's hearsay, I'll ignore it, I often do but if that's the source of the valuation that you're relying upon, you'll need to call them.

STREET: No I just wanted to record that, I'm grateful to your Honour. I'll just move past that.

Q. I'll just suggest to you that that estimation is inflated in any event, isn't it?

A. No, that's not correct.

Q. It's all part of your scam.

A. Incorrect.”

My comment that “if that’s the source of the valuation that you’re relying upon, you’ll need to call them”, was directed to Mr Young, but he ignored the admonition. The hearsay was properly objected to by Mr Street, and I must ignore it.

44. The real question is not what was its value but how much did it cost the plaintiff? It was a spare part which it acquired with the business. I do not know whether it could fulfill any function other than as the replacement part of the KBR. In the Depreciation Schedule which I last quoted it can be seen that 2 pieces of equipment specifically sold with the business, the concrete pump and excavator were jointly valued at $82, yet there is not mention of the gearbox now alleged to have been worth $31,500 in April 2018. I am unable to accept that the purchase of the business, the plaintiff, paid anything like $31,500 to acquire the spare table drive gearbox. I accept that it was purchased by the plaintiff when it bought the business but I could not allow anything more than $5,000 for the purchase price. Its increased value only became evident when it was providentially available because of a piece of astute hoarding by Mr Randell.

Loss of Profit

45. The plaintiff’s solicitors qualified Mr Nicholas Robert Gaudion of Cutcher and Neale, Forensic Accountants, “to prepare a report setting out [his] opinion on the amount of any loss suffered by A Class during the approximate six month period when the damaged [KBR] was not available for use (i.e. from 16 January 2018 to 28 June 2018).” Notwithstanding the Whiteboard, Mr Baker gave evidence that the KBR became available for use “on or around 28 June 2018”, which, in light of the “Miranda job” and the invoice from Supercheap Auto dated 19 June 2018 I am happy to accept. In his report of 12 April 2021, Mr Gaudion expressed his opinion that the loss of profit for the period was $155,975.

46. As I noted in [40] above, the defendant’s expert is Mr Ivey. His first report is dated 19 November 2021. In that report he assessed the loss of profit on two alternative bases:

“Alternative 1:

Based on the actual revenue from 16 January 2017 to 28 June 2017 ($76,414).

Alternative 2:

Based on the actual revenue between 16 January 2017 and 28 June 2017 less a 51% reduction due to the apparent decline in income during this period ($37,142).”

On the first alternative he assesses the loss as $45,568 and on the second alternative he assesses the loss as $17,546. These losses were before tax.

47. There is a Joint Experts’ Report which is Exhibit J. The second section of this report is this:

“2. Summary of Experts’ opinions

2.1 The Experts agree that as a result of the damage caused to the Kelly Bar Rig, A Class suffered a loss of profits.

2.2 The Experts have both been instructed that the Kelly Bar Rig was unavailable during the period from 16 Jnuary 2018 to 28 June 2018 due to repairs being conducted (“the Loss Period”).

2.3 The Experts agree that the most reliable basis on which to form an opinion on the loss of sales is the sales that A Class achieved during the same period in the prior year to the Loss Period, i.e. the sales during the period 16 January 2017 to 28 June 2017 (“the Base Period”.

2.4 The Experts agree that the “Loss of Sales” should be calculated as being the sales during the Base Period (“the Base Period Sales”) less the sales during the Loss Period (“the Loss Period Sales”).

2.5 The Experts agree that the variable expenses that would have been incurred on the Loss of Sales can be calculated as 28.1% of sales.

2.6 The Experts agree that the method of calculating the Loss of Profits should be calculated as the Loss of Sales less the variable expenses of 28.1%.

2.7 The Experts do not agree on [the] amount of the loss of Sales.

2.8 In Gaudion’s opinion, the Loss of Sales should be calculated as the difference between the total sales of the business during the Base Period less the total sales of the business during the Loss Period.

2.9 In Ivey’s opinion, the Loss of Sales should be calculated as either:

(a) The Kelly Bar Rig sales during the Base Period less the Kelly Bar Rig sales during the Loss Period; or,

(b) The Kelly Bar Rig sales during the Base Period reduced by the percentage that other sales declined between the Base and Loss Periods, less the Kelly Bar Rig sales during the Loss Period.

2.10 The table below sets out a summary of the Expert’s opinions.

Gaudion’s opinion	Ivey’s Alternative 1	Ivey’s Alternative 2
Base Period Sales	366,691	76,414	37,443
Loss Period Sales	149,758	13,040	13,040
Loss of Sales (difference of above)	216,933	63,374	24,403
Less Variable Costs (calculated at 28.1%)	(60,958)	(17,808)	(6,857)
Loss of Profits	155,975	45,566	17,546

…”

48. Referrable to the dispute between the experts is what has been referred to as “reputational damage”. The primary evidence relied upon by the plaintiff is contained in the affidavit of Mr Muadin of 9 November 2023, Exhibit B:

“31. From my experience as Director and Secretary of A Class and my review of A Class’s books and records, I am aware that A Class experienced a downturn in its business immediately following the Incident.

32. Very soon after the Incident, I became aware that photographs of the Kelly Bar Rig overturned on City Road, Merewether NSW had been uploaded to social media by an Instagram profile named ‘drilljunkies’ (Instagram Post). The Instagram Post has 242 ‘likes’ and the caption reads:

‘#failfriday [emoji] a very unfortunate loss for @aclasspiling when their brand new rig was totaled (sic) because of the pin on the trailer coupling on the back of the tipper snapped off…’

33. Exhibited at MM1:25-35 are screenshots of the Instagram Post including the ‘comments’ posted on the Instagram Post by other Instagram profiles.

34. Although I cannot now recall with who, in the few months following the Incident, I recall having at least half a dozen conversations with personnel from freight companies such as Troy’s Heavy Haulage to the effect that A Class was thought to be:

(a) “rough” because its equipment had “come off the back of a truck”;

(b) “cheap”;

(c) “running a dodgy operation”; and

(d) “using “shit contractors”[“].

35. Based on these conversations, it became apparent to me that A Class’s reputation was tarnished by the Incident and customers may have been choosing to engage other drilling and piling contractors whose equipment had not been significantly damaged like the Kelly Bar Rig.”

For reasons I gave in A Class Piling and Drilling Pty Ltd v Seventy Eight Promotions Pty Ltd (No 3) I rejected the tender of paragraph 34 of that affidavit. It logically follows that paragraph 35 was also inadmissible: see T120.42 to T122.06. Mr Gaudion, in the Joint Expert Report, at 3.3 to 3.5 sets out other material to the same effect, but there is not any evidence to that effect. Even if the evidence were admissible, in my view, it has no probative value: why would one accept the opinions of employees of hauliers as to the quality of the equipment of, and work done, by a piling and drilling company, when that company’s equipment had been damaged because of an act, neglect and default of a haulier? A company such as the plaintiff is usually retained by a builder, developer or property owner i.e. by businesspeople who are generally astute, conscious of the value of money and of the quality of work performed by them. That is to be contrasted with the type of work done by employees of a haulier. In my view, a businessperson considering the plaintiff’s position, after the damage to the KBR would be more likely to feel sympathetic to the plaintiff; damage to its equipment was not due to any act, neglect or default of the plaintiff. If anyone were to be criticised, it ought to have been the defendant. I therefore reject Mr Gaudion’s contention that because of “reputational damage”, the total sale of the plaintiff’s business must be considered in calculating the plaintiff’s loss of profits.

49. In the Joint Expert Report, Mr Ivey enumerates a number of other consideration which speak against the proposition that the plaintiff’s income was affected by “reputational damage”. Those points are:

“Contrary factors which suggest that there was no reputational related income reduction due to damage to the rig include:

(a) The damage was caused by a third party. It would have been obvious to any interested party that the problems were unrelated to any actions of A Class.

(b) At paragraph 36 of his affidavit dated 9 November 2023, Mr Muadin advises that Mr Goodman, a preeminent figure in the drilling and pilling [sic] industry, supported A Class to obtain further work immediately after the incident. That a “preeminent” figure in the industry supported A Class and enabled them to obtain further work immediately after the incident should have reduced or eliminated any reputational loss, in Mr Ivey’s opinion.

(c) If reputational damage had resulted in loss of income immediately after the incident, Mr Ivey expects that A Class would have provided evidence of some specific cancellations of contract work utilising other items of equipment which were due to start soon after 16 January 2018, but which were subsequently cancelled. These have not been provided.

(d) A Class profit and Loss statements show trading income has increased substantially in the years following the incident. Trading income more than doubled from $604,763 to $1,380,739 between the 2019 and 2022 financial years. Although there were many factors contributing to this increase, it does not per se demonstrate any reputational related loss of income over these years.”

50. In the Joint Expert Report, Mr Gaudion says this about Mr Ivey’s Alternative 1:

“5.9 Under My [sic] Ivey’s Alternative 1, he assessed the Loss of Sales based on the assumption that in the absence of the incident, the loss of sales was confined to the revenue of the Kelly Bar rig. He assessed the Loss of Sales based only on the revenue of the Kelly Bar rig and the difference between the Kelly Bar rig revenue during the Base Period and Loss Period.

5.10 Mr Ivey states at lines 1 and 2 of page 11 of his report that:

I conclude that most of the reduced revenue in 2018 appears to have been caused by a reduction in available work arising from factors other than the impact of the incident.

5.11 However, Mr Ivey does not provide any support for this statement. Nor does he specifically mention or identify any of the “factors other than the impact of the incident” to which he asserts caused the reduction in total sales of A Class during the Loss Period. Therefore, Mr Ivey does not appear to have a valid basis on which to form his opinion that the loss of sales only related to the Kelly Bar rig and Mr Ivey’s assessment of the Loss of Profits under his Alternative 1 should not be accepted.”

With respect, the onus of proving the loss of profit falls upon the plaintiff, not upon the defendant. Mr Gaudion states that Mr Ivey does not state what the other factors might be. One can speculate: were there unfavourable weather conditions? Were there unfavourable economic conditions in this period? Was there merely a lack of work? Was there a competitor undercharging, who soon left the market? Does the plaintiff’s expert, Mr Gaudion himself, rule out any such considerations? The answer to that question is “no”.

51. In his reply to Mr Gaudion’s contention Mr Ivey said, inter alia:

“6.6 Under Mr Ivey’s Alternatives 1 and 2, only losses arising from the reduced sales for the Kelly Bar rig are considered. No loss from the reduced sales from other, undamaged, items of equipment are accounted for. This is because in Mr Ivey’s opinion, no valid objective evidence has been presented or is available which supports the contention that sales from other equipment were adversely affected by the damage to the Kelly Bar rig. In fact, the opposite may have been expected. Mr Ivey understands that only one rig could be operated at a time – there was insufficient labour and expertise within the business to operate more than one rig at the same time. Under these conditions it might be expected that sales from other rigs would have increased above the level expected from these other items, had the Kelly Bar rig not been damaged.”

52. Quite frankly, I found Mr Ivey’s evidence and arguments much more convincing than Mr Gaudion’s evidence and arguments, the latter being heavily influenced by the alleged “reputational damage” and its implicit deviation from item 2.3 of the Joint Expert Report which I cited above at [47]. I prefer Mr Ivey’s Alternative 1 to Mr Gaudion’s assessment.

53. The remaining issue is whether I should accept Mr Ivey’s Alternative 2 to his Alternative 1. The difference between the alternatives is succinctly stated by Mr Gaudion, in the Joint Expert Report, thus:

“5.2 Under My [sic] Ivey’s Alternative 2, he assessed the Loss of Sales based on the assumption that in the absence of the incident, the loss of sales was confined to the revenue of the Kelly Bar rig and that the revenue from the Kelly Bar rig would have declined by the same proportion as did the revenue from the CFA rig. Mr Ivey asserts that the revenue from the CFA Rig declined by 51% and therefore the expected sales for the Kelly Bar rig would have also declined by 51%.”

In my view, Mr Ivey’s argument to that effect is fallacious. As Mr Ivey himself argued at 6.6, quoted in [51] above, “….it might be expected that sales from other rigs would have increased above the level expected from these other items, had the KBR not been damaged.” Again, what conditions were during the period is not disclosed in any detail at all. Furthermore, at 5.3 of the Joint Expert Report, Mr Gaudion presents sound evidence that there was no correlation between income generated by rigs of different types and the report includes a graph, which relevantly shows this:

Period 2017	Proportions of Relevant Income
CFA Rig	KBR
April – June	3	1
July – Sept.	7	1
Oct - Dec	1	3

Furthermore, during the period when the KBR was not available for use, the plaintiff had two CFA Rigs, the original purchased with the business in January 2017 and the new Kobelco CFA. Furthermore, a CFA Rig was used to complete a job the KBR had been doing at Merewether before the incident, on 7 and 8 February 2018; (see Joint Expert Report, Exhibit J, page 7 paragraph 5.5(b)) so that it was possible, but not preferable for a CFA Rig to do part of the job of the KBR. In these circumstances I do not accept Mr Ivey’s Alternative 2.

54. Accordingly, I allow for loss of profit Mr Ivey’s Alternative 1, $45,566.

Other Matters

55. At [1] above, I described the job to which the KBR was being carried, when it was damaged. In his primary report of 19 November 2021, Exhibit FD) Mr Ivey said this:

“5.3 CivHix Losses

An amount of $9,625 (excluding GST) was allegedly paid by A Class to its customer CivHix for losses sustained as a consequence of Kelly bar rig being unable to the contracted work because the incident.

An invoice for the above amount has been provided which appears to indicate that the losses relate to extra labour and contractor costs allegedly incurred by CivHix due to the incident. The invoice is undated.

It is not clear whether the amount claimed arose out of the terms of a contract agreement between CivHix and A Class. No agreement has been provided to me.

A schedule of payments to Hix Group Pty Ltd between 23 August 2018 and 23 November 2019, claimed to have been extracted from A Class’ Xero accounting program has been provided. The payments in this schedule total $9,625 (excluding GST).

No primary documentation of payments such as banked statements or receipts have been provided.”

The Receipt for CivHix for this payment may be found as an annexure to Mr Baker’s primary affidavit (Exhibit A) at page 154 of the Exhibit, page 194 of the Court Book. The receipt bears this title: “Cost of works due to Piling rig not attending night works due to float drive having accident time of commencement of job.” I therefore allow to the plaintiff the sum of $9,625.00.

56. At Exhibit A page 150 (Court Book page 190) commences a formal quotation given by the plaintiff to CivHix dated 1 December 2017. It purports to be a 3 page document but there are two pages numbered “Page 3 of 3”. The only sum certain on the quotation is the cost of “Mobilisation for Drilling Rig only” for $1,850. The first page 3 of 3 has not been completed by the offeree (Civ Hix). The last line of this page 3 is: “This quote is valid for 90 days from 1 December 2017.” The second page 3 of 3 was executed by the offeree on 6 December 2017.

57. The last mentioned quotation throws into focus another aspect of the claim for loss of profit. There is no quotation for other work planned to be done with the KBR after 16 January 2018. There is no estimate or opinion as to how much the plaintiff may have earned for the CivHix job if the KBR could have been engaged, whether it be 1 hour, 6 hours or 60 hours, or what a job of such magnitude would have paid. I do know from the quantum that the minimum hire was for 6 hours for $2,200 and $400 for each additional hour. The income forgone therefor because of the inability to do this job has not been the subject of any evidence.

58. Similarly, there was no evidence called to state that enquiries were made by customers as to their ability to hire the KBR, and that such customers had to be rebuffed because of its unavailability. No customer was called to say that he or she had a job for a KBR that would have been offered to the plaintiff if its machine were available.

59. Similar to the matter raised in [57] above, no evidence was given about the “Miranda job” (see [36] to [38]), as to how long it may have taken, if the KBR were operable, as to the income for the plaintiff that that job might have generated. Prior to this job being identified as being at Miranda, Mr Baker said in re-examination:

“Q. When you said about potentially another job earlier in Sydney, can you tell his Honour what job that was?

A. It was a job down in, in Sydney on a - I just remembered, it was a job in Sydney on a very busy road, sloping block. We took the Kelly bar there and, yeah, that obviously was the first one back.

HIS HONOUR

Q. Sydney, on a very busy road did you say?

A. Yeah. I just, I just forget whereabouts exactly. It was like Western Sydney somewhere.

Q. On a sloping block?

A. Yeah.

YOUNG

Q. Just orientate yourself by remembering that the last - I’ve told you about the 2 August - you’ve seen that 2 August entry.

A. Mm.

Q. You’ve seen that the last entry of work done on that schedule was 2 June.

A. Yep.

Q. Can you tell his Honour where over between those two dates roughly this job occurred?

A. Yeah, well - yeah, it’s so - like, it’s a long time ago obviously. But yeah, now with the - there was a job that we went to, that’s being the one I was trying - starting to explain, and we tried to utilise the drill rig and it ended up having a few little issues that prevented us from being able to complete the job, and after one day of trying to utilise the machine, we had to pull out of the machine and get another - Lance from up Port Macquarie and on the job to complete the job.”

The job was actually done by Lance (obviously the given name of someone known to Mr Baker) from Port Macquarie. The records of that gentleman’s business would show the length of the job and the revenue earned, but they were not tendered. Nor was their absence explained.

60. In cross-examination Mr Baker gave this evidence:

“Q. ….. you didn't cancel any particular jobs after the incident referrable to the Kelly bar rig, did you?

A. Well we had to cancel all the jobs because we didn't have a drill rig.

Q. No, you didn't cancel any particular jobs after the incident referable to the Kelly bar rig, did you?

A. We had to cancel all jobs and we couldn't quote Kelly bar jobs because we didn't know when the machine would be up and running.”

There is no evidence that any particular job after the CivHix job was cancelled. There is no documentary evidence that any such job existed. The excuse that the plaintiff was not able to provide quotations after the accident is repeated elsewhere, and was offered because the plaintiff did not want to be seen as unreliable. However, one of the documents annexed to Exhibit A, Mr Baker’s primary affidavit, at page 267 (Court Book page 307) is a letter in the plaintiff’s stationary, under the hand of Mrs Julie Randell (“Admin”), the second paragraph of which states this:

“Early part of the year [i.e. 2018] we quote on jobs that often happen later in the year. We have put 4 quotes in since the accident and to our knowledge haven’t won those jobs. We haven’t been quoting on many jobs not knowing when we would have a Rig available. We didn’t want to give our clients false hopes.”

This letter is dated 19 March 2018 and is addressed to Mr Matthew Laing of Procare Recovery Specialists. The plaintiff’s insurer was Sura Plant and Equipment Pty Ltd (“Sura”). As I understand the evidence, the Procare group were acting for Sura, as were “PC Legal”. The statement I which I have quoted was directed, eventually, by the plaintiff to its own property insurer. None of those quotes, some of which could have been oral only, has made its way into evidence. Mr Baker’s responses to questions based on the letter I have just quoted were not satisfactory. This want of evidence relevant to the loss of profit claim is something I have had to weigh when considering the experts’ reports.

61. Relevant to the alleged “reputational damage” is the role of Mr David Goodman. As I have pointed out, he constructed the KBR. At about the time the KBR was damaged, Mr Goodman sold the new Kobelco CFA rig to the plaintiff. When the KBR was damaged it was taken to the yard of Monster Rigs Pty Ltd, “Part of the Goodman Group”, for assessment by Mr Goodman and was left with him for repair. Mr Goodman arranged for the plaintiff’s Kobelco CFA rig to be displayed at Diesel, Dirt and Turf Expo at Penrith between 13 and 15 August 2018. Mr Goodman did that at the behest of Kobelco, but the display of the plaintiff’s new rig could only be to its advantage. In Exhibit B, Mr Muadin’s affidavit of 9 November 2023, Mr Muadin said this:

“36. Of the little work that A Class did win immediately after the Incident, some of this work was sourced by Dave Goodman (Mr Goodman), a preeminent figure in the drilling and piling industry and relation to David Randall, one of the principals of the vendor of the Existing Business as defined in paragraphs 12 and 13 of Mr Baker’s Affidavit. This was done as a favour to Shannon Baker and I [sic], and to try and help us get back on our feet after the Incident.”

The evidence strongly supports Mr Muadin’s assessment that Mr Goodman is a “pre-eminent figure in the drilling and piling industry”. Those with a job to be done might consult him about that job, and he could direct that job to the plaintiff. When the doyen in the field supports the plaintiff why would any rational person listen to the gossip of employees of hauliers to negative such support? This was not alluded to at all by the plaintiff’s expert, Mr Gaudion.

62. Lest the matter go further, I should comment on credit. Mr Young submitted that “Mr Baker and Mr Muadin were each honest and reliable witnesses” (MFI 7, [11]). Mr Street’s constant refrain when cross-examining these witnesses was that the plaintiff’s claim was a “scam” i.e. a fraud. I am unable to accept either of these positions. It must be conceded that Messrs Baker and Muadin gave their evidence a long time after the relevant events i.e. between January and June 2018. Mr Baker swore his primary affidavit on 29 July 2023 – five years later. Mr Muadin swore his affidavit on 9 November 2023, almost five and a half years later. Their oral evidence was given in February 2024, some 6 years after the KBR was damaged. Delay affects memory, which becomes more unreliable with the passage of time. During delay favourable matters are often considered and, at times, “built up”; unfavourable matters are often forgotten or minimised. I did not form a view that these gentlemen were fraudsters, but men whose expectations had increased with the passage of time. I have sought to demonstrate unreliabilities in the evidence. Often objective evidence showed that what a witness or the witnesses said was unreliable. Much of the oral evidence displayed exaggeration, a common occurrence in many cases that come before the Courts, when the plaintiffs seek damages for losses arising from accidents. I have, accordingly, approached the evidence with circumspection.

Summary

63. I allow the following:

ITEM	AMOUNT	REFERENCE
1. Paid to Monster Rigs Pty Ltd	$123,000.00	[12]
2. Wages	0	[23] to [39]
3. Materials supplied	$3,479.10	[40]
4. Table Drive Gearbox	$5,000.00	[41] to [44]
5. Loss of Profit	$45,566.00	[45] to [54]
6. Payment to CivHix	$9,625.00	[55]
TOTAL	$186,670.10

From that total sum must be deducted the sum of $160,000 paid to the plaintiff by its insurer, Sura: see Exhibit A, [78] and Deed of Release annexed to Exhibit A at page 278 (Court Book page 318). The plaintiff is entitled to a basal judgment in its favour of $26,670.10 which I round off at $26,670.

64. The plaintiff is entitled to pre-judgment interest on the sum of $26,670. The question then arises as to the date on which interest should commence. Item 1 in [63] was paid between 1 April 2018 and 21 August 2018. The last materials in item 3 were purchased on 27 June 2018. The last payment to CivHix for item 6 was made on 23 November 2019. It appeared to me that a logical date to commence interest was when the KBR returned to service on 26 June 2018. I trust I shall be forgiven for commencing interest on 1 July 2018, for ease of calculation. At [36.7.10] Ritchies Uniform Civil Procedure NSW sets out the interest rates to be used for calculation of pre-judgment interest in the NSW District Court according to the UCPR 36.7:

Judgment and pre-judgment interest rate table

Period	RBA publication	RBA rate %	Pre-judgement interest rate (RBA + 4%) %	Post judgment interest rate (RBA + 6%) %
1 Jul — 31 Dec 2014	7 Aug 2013	2.50	6.50	8.50
1 Jan — 30 Jun 2015	7 Aug 2013	2.50	6.50	8.50
1 Jul — 31 Dec 2015	6 May 2015	2.00	6.00	8.00
1 Jan — 30 Jun 2016	6 May 2015	2.00	6.00	8.00
1 Jul — 31 Dec 2016	4 May 2016	1.75	5.75	7.75
1 Jan — 30 Jun 2017	3 Aug 2016	1.50	5.50	7.50
1 July — 31 Dec 2017	3 Aug 2016	1.50	5.50	7.50
1 Jan — 30 Jun 2018	3 Aug 2016	1.50	5.50	7.50
1 July — 31 Dec 2018	3 Aug 2016	1.50	5.50	7.50
1 Jan — 30 Jun 2019	3 Aug 2016	1.50	5.50	7.50
1 July — 31 Dec 2019	5 Jun 2019	1.25	5.25	7.25
1 Jan — 30 Jun 2020	2 Oct 2019	0.75	4.75	6.75
1 July — 31 Dec 2020	20 Mar 2020	0.25	4.25	6.25
1 Jan — 30 Jun 2021	4 Nov 2020	0.10	4.10	6.10
1 July — 31 Dec 2021	4 Nov 2020	0.10	4.10	6.10
1 Jan — 30 Jun 2022	4 Nov 2020	0.10	4.10	6.10
1 July — 31 Dec 2022	8 Jun 2022	0.85	4.85	6.85
1 Jan — 30 June 2023	7 Dec 2022	3.10	7.10	9.10
1 July — 31 Dec 2023	7 Jun 2023	4.10	8.10	10.10
1 Jan — 30 June 2024	6 Dec 2023	4.35	8.35	10.35

Pre-judgment interest, therefore, amounts to $8,941.68 per calculations set out below:

Start Date	End Date	Days	Rate	Amount Per Day	Total
01/Jul/2018	31/Dec/2018	184	5.5%	$4.0188	$739.45
01/Jan/2019	30/Jun/2019	181	5.5%	$4.0188	$727.40
01/Jul/2019	31/Dec/2019	184	5.25%	$3.8361	$705.84
01/Jan/2020	30/Jun/2020	182	4.75%	$3.4613	$629.95
01/Jul/2020	31/Dec/2020	184	4.25%	$3.0969	$569.83
01/Jan/2021	30/Jun/2021	181	4.1%	$2.9958	$542.24
01/Jul/2021	31/Dec/2021	184	4.1%	$2.9958	$551.23
01/Jan/2022	30/Jun/2022	181	4.1%	$2.9958	$542.24
01/Jul/2022	31/Dec/2022	184	4.85%	$3.5438	$652.06
01/Jan/2023	30/Jun/2023	181	7.1%	$5.1879	$939.00
01/Jul/2023	31/Dec/2023	184	8.1%	$5.9185	$1089.01
01/Jan/2024	30/Jun/2024	182	8.35%	$6.0845	$1107.39
01/Jul/2024	24/Jul/2024	24	8.35%	$6.0845	$146.03
Total	2216	$8941.68

Order

65. I give judgment for the plaintiff against the defendant for $35,611.68.

Costs

66. I shall hear the parties on the question of costs. However, I must draw attention to UCPR 42.35.

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Decision last updated: 24 July 2024