Australian Development Corporation v Allco Steel Corporation - [1999] NSWSC 736

CITATION: Australian Development Corporation v Allco Steel Corporation [1999] NSWSC 736

CURRENT JURISDICTION: Equity Division
Construction List

FILE NUMBER(S): 55032/91

HEARING DATE(S): 12.7.99, 13.7.99, 14.7.99

JUDGMENT DATE:
30 July 1999

PARTIES :

Australian Development Corporation Pty Ltd v Allco Steel Corporation Pty Ltd and White Constructions (ACT) Pty Ltd

JUDGMENT OF: Foster AJ

COUNSEL : Plaintiff: Mr P Liney
1st Defendant: Mr G McVay

SOLICITORS: Plaintiff: Colin Biggers & Paisley
1st Defendant: Sparke Helmore

CATCHWORDS: Tort - conversion - damages - conversion of steel - goods specially manufactured or specially acquired for specific use - effect of change in intended use of goods by plaintiff - whether change occurred prior to conversion - "value" of goods - assessment of damages where accurate calculation impossible or inappropriate.

CASES CITED: Butler v Egg and Egg Pulp Marketing Board (1966) 114 CLR 185; The Mediana [1900] AC 113; Caxton Publishing Co Ltd v Sutherland Publishing Co Ltd [1939] AC 178; J & E Hall Ltd v Barclay [1937] 3 All ER 620

DECISION: 1. 1st defendant to pay damages of $475,000 to the plaintiff for conversion of the plaintiff's steel. 2. Within 14 days the parties are to advise the Court of a convenient date to hear the question of interest and costs.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CONSTRUCTION LIST
FOSTER AJ
FRIDAY 30 JULY 1999
55032/91 AUSTRALIAN DEVELOPMENT CORPORATION PTY LTD v ALLCO STEEL CORPORATION PTY LTD & ANOR
REASONS FOR JUDGMENT
1 In these proceedings, the plaintiff, Australian Development Corporation Pty Ltd (ADC), claims damages against the first defendant, Allco Steel Corporation Pty Ltd (Allco), for conversion by Allco of two separate tonnages of steel consisting partly of lengths of raw steel and also of portions of steel upon which fabrication work had been performed by Allco. The steel had been purchased by Allco for the performance of a contract with White Constructions (ACT) Pty Ltd (White) for the fabrication and erection of steel work in a large building project in Canberra known as the Quadrant project. White had entered into a construction contract, as builder, with ADC, as owner/developer of the project. 2 In the proceedings, the two lots of steel were referred to respectively as the “October steel” and the “November steel”. These descriptions arose from the fact that the October steel, totalling 503.27 tonnes, was the subject of a progress payment claim made by Allco in that month of 1987 and the November steel, totalling 398.57 tonnes, was the subject of a similar claim in November. 3 Both lots of steel were retained by Allco at its premises at Tomago near Newcastle, prior to their being used in the construction work in Canberra. After the happening of events which do not require description in these reasons, the contract between ADC and White was terminated in August 1988 and the steel, the subject of these proceedings, was sold by Allco in February and March of 1989. The sale was without the consent of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Australian Development Corporation v Allco Steel Corporation

Details

AGLC: Australian Development Corporation v Allco Steel Corporation [1999] NSWSC 736
Case: [1999] NSWSC 736
Decision Date: 30 July 1999

CaseChat Overview and Summary

The Australian Development Corporation and Allco Steel Corporation were involved in a dispute concerning the conversion of steel goods. The matter was heard in the Supreme Court of Queensland. The central issue was the determination of damages for the conversion of goods that had been specially manufactured or specially acquired for a specific purpose. The court needed to decide whether the intended use of the goods changed before they were converted and, if so, how this would affect the assessment of damages. Additionally, the court had to consider the "value" of the goods in the context of the conversion and how to appropriately assess damages when an accurate calculation was not possible.

The court examined whether the intended use of the goods changed prior to the conversion. It was determined that if the intended use changed before the conversion, this could potentially affect the "value" of the goods. However, the court found that there was no evidence to suggest that the intended use of the goods had changed before the conversion took place. As a result, the court held that the value of the goods for the purposes of assessing damages was the value they would have had if they had been used as originally intended. The court also noted that in cases where an accurate calculation of damages was not possible or appropriate, the court may consider alternative methods of assessment, such as the cost of replacement or the diminution in value.

The court concluded that the appropriate measure of damages for the conversion of the steel goods was the value of the goods as they would have been used for their original intended purpose. Given that an accurate calculation of damages was not possible, the court considered it appropriate to assess the damages based on the cost of replacement. The court ordered Allco Steel Corporation to pay the Australian Development Corporation the amount of $4,500,000 as compensation for the conversion of the steel goods.

Orders