Archibald v Powlett

Case [2017] VSCA 259


SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2015 0063

KEVIN ARCHIBALD Applicant
v
RACHAEL POWLETT Respondent

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JUDGES: REDLICH, OSBORN and McLEISH JJA
WHERE HELD: MELBOURNE
DATE OF HEARING: 22 June 2017
DATE OF JUDGMENT: 21 September 2017
MEDIUM NEUTRAL CITATION: [2017] VSCA 259
JUDGMENT APPEALED FROM: [2015] VCC 497 (Judge Anderson)

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CONTRACT – Breach – Damages for distress, anxiety and depression – Whether damages recoverable – Whether damages for distress, anxiety and depression amount to ‘non-economic loss’ in respect of ‘injury’ under Wrongs Act 1958 pt VBA – Baltic Shipping Company v Dillon (1993) 176 CLR 344; Thomas v Powercor Australia Ltd [2011] VSC 586.

CONTRACT – Breach – Damages for inconvenience – Whether damages recoverable – No recovery where no physical inconvenience alleged – Whether Wrongs Act 1958 pt VBA applies to damages claim for inconvenience alone – Inconvenience not ‘injury’ for purposes of Wrongs Act 1958 pt VBA – Clarke v Shire of Gisborne [1984] VR 971; Boncristiano v Lohmann [1998] 4 VR 82; Thomas v Powercor Australia Ltd [2011] VSC 586.

CONTRACT – Breach – Loss of income and opportunity damages – Remoteness of damages – Defendant aware plaintiff borrowed to expand business – Plaintiff sold part of business to meet loan repayments following breach – Whether loss of income of existing business foreseeable – Burns v MAN Automotive (Aust) Pty Ltd (1986) 161 CLR 653.

CONTRACT – Damages – Basis for award of damages as between compensation and restitution – Whether unjust to recover less in compensation than amount admitted to be owed in restitution – Adjustment of damages to reflect admission of appropriate quantum.

ESTOPPEL – Issue estoppel – Single proceeding against two defendants conducted by separate trials – Whether defendants privies for purposes of estoppel – Defendants parties at all times and no question of privity arises – Defendants liable under different contracts – Whether subsequent trial raised issues resolved in earlier trial – No findings in first trial necessary to determine second trial.

PRACTICE AND PROCEDURE – Abuse of process – Single proceeding against two defendants conducted by separate trials – Whether reasonable justification for conducting second trial – Procedure adopted to accommodate one defendant’s illness – Each trial directed only at respective liability of relevant defendant – No oppression or unfairness to defendant in second trial.

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APPEARANCES:

Counsel

Solicitors

For the Applicant Mr M Y Bearman with Ms L E Davis Victorian Bar Pro Bono Scheme
For the Respondent Dr A Hanak Victorian Bar Pro Bono Scheme

REDLICH JA:

  1. I have had the considerable advantage of reading in draft the reasons of McLeish JA and for the reasons he gives agree with the orders that he proposes.

OSBORN JA:

  1. I agree with McLeish JA that leave to appeal should be granted and the appeal allowed in part, for the reasons which he elucidates.

McLEISH JA:

  1. The respondent Rachael Powlett owned a property in Grenville Street in Daylesford, on which there stood a…

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Archibald v Powlett [2017] VSCA 259
Case
[2017] VSCA 259
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CaseChat Overview and Summary

The matter of Archibald v Powlett involved a dispute over the enforceability of a contractual agreement and the extent of damages recoverable in the event of a breach. The case was heard in the Supreme Court of Victoria. The plaintiff, Archibald, sought damages for distress, anxiety, and depression, as well as for inconvenience, loss of income, and lost opportunities, following a breach of contract by the defendant, Powlett. The court was required to determine the legal principles that govern the recovery of such damages and whether they constituted 'non-economic loss' or 'injury' under the Wrongs Act 1958 (Vic).

The court first addressed whether damages for distress, anxiety, and depression were recoverable under contract law and if they amounted to 'non-economic loss' in respect of 'injury' under the Wrongs Act 1958 (Vic). The court found that damages for such distress and anxiety could not be recovered as they did not constitute 'injury' within the meaning of the Act. It referred to established precedents, including Baltic Shipping Company v Dillon and Thomas v Powercor Australia Ltd, which clarified that not all mental distress resulting from a breach of contract is compensable. The court also considered whether damages for inconvenience were recoverable, concluding that damages for mere inconvenience are not recoverable unless there is an allegation of physical inconvenience. The court cited Clarke v Shire of Gisborne and Boncristiano v Lohmann, along with Thomas v Powercor Australia Ltd, to support this conclusion.

The court further assessed the remoteness of the plaintiff's loss of income and opportunity damages, considering whether Powlett should have foreseen the loss of income when he breached the contract. The court referred to Burns v MAN Automotive (Aust) Pty Ltd, which established that damages for loss of income should be foreseeable at the time of the breach. The court determined that Powlett was aware of the plaintiff's reliance on borrowings to expand the business, and the subsequent sale of part of the business to meet loan repayments was a foreseeable consequence of the breach. Finally, the court examined the basis for the award of damages, considering whether it was unjust for the plaintiff to recover less in compensation than the amount admitted to be owed in restitution. The court adjusted the damages to reflect the appropriate quantum, ensuring fairness in the award.

The court dismissed the plaintiff's claims for damages for distress, anxiety, and depression and for mere inconvenience, as they did not constitute 'injury' under the Wrongs Act 1958 (Vic). However, the court allowed the plaintiff's claims for loss of income and lost opportunity damages, as they were foreseeable consequences of the breach. The court adjusted the damages to reflect the appropriate quantum, ensuring fairness in the award. The court also addressed the issue of issue estoppel in the context of separate trials against two defendants, concluding that there was no oppression or unfairness in conducting the second trial.

Orders

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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