Allegro Pty Ltd v AIF Pty Ltd - [2009] WASC 184

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: ALLEGRO PTY LTD -v- AIF PTY LTD [2009] WASC 184

CORAM: MASTER SANDERSON

HEARD: 23 JUNE 2009

DELIVERED : 23 JUNE 2009

PUBLISHED : 1 JULY 2009

FILE NO/S: CIV 1080 of 2009

BETWEEN: ALLEGRO PTY LTD (ACN 008 833 494)
Plaintiff
AND
AIF PTY LTD (ACN 100 751 577)
Defendant

Catchwords:

Assessment of damages - Turns on own facts

Legislation:

Nil

Result:

Damages assessed at $2,337,847.59 plus interest

Category: B

Representation:

Counsel:

Plaintiff: Mr D J Pratt
Defendant: No appearance

Solicitors:

Plaintiff: Jackson McDonald
Defendant: No appearance

Case(s) referred to in judgment(s):

International Minerals & Chemical Corporation v Karl O Helm AG [1986] 1 Lloyd's Rep 81
Standard Commodities Australia Pty Ltd v Tandou Ltd (Unreported, NSWSC, 9 November 1993)
Unilan (Australia) Pty Ltd v Ming Shan (Holdings) Ltd (Unreported, NSWSC, 18 March 1994)

MASTER SANDERSON: On 23 June I assessed damages in this matter in the sum of $2,337,847.59 plus interest. I indicated that I was publish reasons for that decision. These are those reasons.
These proceedings were commenced by a writ of summons dated 14 January 2009. On 4 February 2009 the defendant entered an appearance by its then solicitors Deacons. An initial status conference was held on 9 March 2009. Registrar Rimmer ordered relevantly that:
1.The plaintiff file and serve a statement of claim by 13 March 2009;
2.The plaintiff provide informal discovery by 13 March 2009; and
3.The defendant file and serve a defence or any application to strikeout the statement of claim by 3 April 2009.
On 13 March 2009 the plaintiff served a statement of claim and an informal list of documents on the defendant's solicitors. On 19 March 2009 the plaintiff served particulars of loss and damage on the defendant's solicitors.
During the period between 27 March 2009 and 16 April 2009 the plaintiff's and the defendant's solicitors conferred in relation to various matters relating to the plaintiff's statement of claim and particulars of loss and damage. On 8 May 2009 Deacons wrote to the plaintiff's solicitors advising that the defendant had withdrawn its instructions for Deacons to act in relation to the matter and did not intend to defend the proceedings. On 11 May 2009 the plaintiff obtained default judgment with damages to be assessed.
This history of the matter is taken from the court file and from an affidavit of Daniel John Sawyer sworn 11 May 2009 and filed in support of the interlocutory judgment.
By the defendant's failure to serve a defence it is taken to have admitted the allegations of fact contained in the statement of claim. The effect of a judgment for a plaintiff against the defendant for damages to be assessed is unambiguous. It determines the liability of the defendant to pay damages to the plaintiff leaving only the quantum of those damages to be assessed.
At the hearing of an application for an assessment of damages, the plaintiff may adduce evidence as to the quantum of its damages. What it may not do is rely on further facts which are additional to those alleged in the statement of claim. In this case the plaintiff relied at the assessment of damages on an affidavit of Geoffrey John Bull sworn 17 June 2009. That affidavit was consistent with the principles that I have outlined above. The evidence dealt with the quantum of damages but did not set out any facts which were additional to those alleged in the statement of claim.
By its failure to lodge a defence, the defendant in this matter has admitted that:
1.In or about the period 26 June 2008 to 5 August 2008 the plaintiff agreed to sell and the defendant agreed to buy 49 sea containers of frozen boneless beef and beef products.
2.In or about the period 1 September 2008 to 23 September 2008 the defendant evinced an intention to no longer be bound by each of the agreements and thereby repudiated each of them.
3.On 23 September 2008 the plaintiff accepted the defendant's repudiation of the agreements and terminated each of them.
4.By reason of the defendant's breach of contract the plaintiff has suffered loss and damage.
5.The relevant loss and damage suffered by the plaintiff is:
(a)the loss of profit the plaintiff would have made in the event the agreements had been fully performed by the defendant; and
(b)additional loss and damage arising from the loss of use of the purchase price to repay or reduce the plaintiff's forward exchange contract liability.
As loss of profit the plaintiff claimed $347,650. The way in which the loss of profit is calculated is dealt with in pars 38 ‑ 40 of Mr Bull's affidavit and in annexure GB5 to the affidavit. It is unnecessary for me to go through this evidence in any detail. The way in which the profit is calculated is set out clearly and the arithmetic is correct. I was satisfied this aspect of the plaintiff's claim for damages was made out.
There then remained the additional loss and damage claimed which was said to arise from loss of use of the purchase price. By its failure to serve a defence the defendant admitted that at the time of entry into each of the agreements it was a direct and foreseeable consequence of any breach of the defendant's obligation to pay the purchase price that in addition to any loss of profits the plaintiff would suffer loss or damage as a result of:
(a)the loss of use by the plaintiff of the purchase price;
(b)the loss of use by the plaintiff of the currency in which the plaintiff was entitled to be paid, being United States dollars, to repay or reduce liabilities to the plaintiff in that currency; and/or
(c)forward exchange contracts entered into by the plaintiff to mitigate the effect of any change in the exchange rate of United States dollars to Australian dollars.
All of that was pleaded. Further, as was submitted on behalf of the plaintiff, it was reasonably foreseeable that a commodities exporter contracting in a foreign currency will seek to protect themselves against currency exchange rate movements by entering into foreign currency hedging contracts. There have been at least two cases where a court has reached such a conclusion: Standard Commodities Australia Pty Ltd v Tandou Ltd (Unreported, NSWSC, 9 November 1993) 10 ‑ 11 (Cole J); and Unilan (Australia) Pty Ltd v Ming Shan (Holdings) Ltd (Unreported, NSWSC, 18 March 1994) 43 ‑ 44 (Cole J).
It is also reasonably foreseeable that a party who is kept out of foreign currency will suffer a loss due to their liability to convert that currency into another currency. This is particularly so where the currency of the transaction is not the currency of the place where the transaction is entered into and the nationality and business residence of the plaintiff is known. This point was made by Hophouse J in International Minerals & Chemical Corporation v Karl O Helm AG [1986] 1 Lloyd's Rep 81 at 101, 102 and 104.
In the present case the plaintiff suffered an additional loss due to the loss of the use of the purchase price in the sum of $1,961,202.05. This was the additional cost to the plaintiff in Australian dollars of having to meet its forward exchange contract liabilities. These losses are explained in detail at pars 41 ‑ 48 of Mr Bull's affidavit. Once again, without going through the paragraphs of the affidavit or the relevant annexure GB6, it is sufficient if I say I am satisfied the calculations made by Mr Bull are fair, reasonable and accurate.
Accordingly, I entered judgment for the plaintiff. The plaintiff also sought prejudgment interest on the judgment sum from 1 November 2008 to 23 June 2009 at the rate of 6%. This amounted to $89,927.07. I made that order. I also awarded costs in the plaintiff's favour.
This matter first came on for mention in chambers on 2 June 2009. At that hearing I ordered that a copy of the affidavit in support of the assessment of damages be served on the defendant. That was done. At the hearing a solicitor for the defendant appeared but only to advise that the defendant would not be taking any part in the assessment of damages.