Bell, J.D. v Clare, W.L

Re: JOHN DAVID BELL and ANDREA VIDA BELL
And: WILLIAM LEVI CLARE
No. SA G8 of 1987
FED No. 401
Detinue

COURT

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIAN DISTRICT REGISTRY
GENERAL DIVISION
Von Doussa J.(1)

CATCHWORDS

Detinue - animals - assessment of damages - unlawful detention of two thoroughbred horses - principles to be applied.

HEARING

ADELAIDE

#DATE 17:7:1990

Counsel for the applicants: Mr Bell for himself

Counsel for the respondents: No appearence

ORDER

Judgment be entered for the applicants against the respondent William Levi Clare for $31,295.

The said respondent pay the applicants' costs of the action to be taxed.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

In these proceedings the applicants originally included claims for damages against the respondent and another person for contraventions of s.52 of the Trade Practices Act 1974, for breach of contract, and for deceit, as well as for an order for the return of several thoroughbred horses and alternatively damages for their value.

The claims arose from arrangements made by the applicants with the respondent in respect of those horses. The arrangements were to include the provision by the respondent of the services of a stallion, care and agistment of the horses, and training. The proceedings have been much delayed by the parties, and in particular by the respondent, and with the passage of time other events have overtaken the original reasons for the institution of the proceedings.
Now the proceedings are limited to claims against only one respondent, and the claims are confined to claims for damages for the unlawful detention by the respondent of a thoroughbred mare named "Bold Storm and a colt by Lakeland out of Bold Storm which was foaled on or about 3 September 1984.
From time to time during the currency of the proceedings the applicants and the respondent have been represented by solicitors and counsel, but when the matter came on for hearing yesterday, counsel who had previously appeared for the respondent sought leave to withdraw as he was without instructions. The matter has proceeded in default of the appearance of the respondent. The applicants' solicitors have also recently ceased to act for the applicants and Mr Bell has presented the case for the applicants in person.
It is admitted in the pleadings, and it was common ground between the former legal representatives of the parties during hearings on interlocutory matters, that Bold Storm, then in foal, was delivered to the respondent's property on 1 July 1984 and that the respondent agisted the horse, and, once born, the colt foal, pursuant to the arrangements between the parties until October 1985.
In September 1985 or thereabouts the applicants alleged breaches of the arrangements by the respondent and demanded the return of the horses. There was a dispute between the parties as to the extent of moneys then due to the respondent. The respondent was claiming some $8,000. The applicants asserted that only $6,655 was due. In October 1985 the applicants sought to take delivery of the horses and offered the respondent a cheque for $6,655 to settle the outstanding account.
The respondent refused to give delivery of the horses until the full amount claimed by him was paid. He refused to take the cheque. He claimed a lien in the meantime over both Bold Storm and the colt. These events were followed by the present proceedings. Very belatedly the applicants moved for summary judgment on that part of their claim which sought an order for the delivery of the horses to the applicants.
On the hearing of that notice of motion the respondent did not appear. On 24 November 1989 I gave judgment in favour of the applicants on that aspect of the claim. I held that in law the claim for a lien over the horses could not be maintained and I ordered that the respondent deliver up possession of the horses within 14 days of service of the order. The order was eventually served on 31 January 1990. The service of the order brought forth the information from the respondent that on 5 November 1989 both horses had been sold at auction by a receiver who had been appointed to a company through which the respondent conducted a thoroughbred stud and agistment business.
I accept Mr Bell's evidence that the applicants have not had the horses returned to them. Mr Bell now argues that the applicants should recover damages equal to the value of the horses as at October 1985 together with lost income from the breeding potential of Bold Storm in the years 1985 to the present time and for the lost chance of profits from racing the colt or alternatively from selling the colt as a yearling.
The subtleties of the differences between a claim in conversion and a claim in detinue are not understood by Mr Bell and this has made the presentation of his case difficult for him and difficult for the Court. The general principles of law which have a direct application to the present claim were succinctly summarised by the Court of Appeal in England in Rosenthal v. Alderton and Sons Limited (1946) 1 KB 374, in particular at p 378, where the Court said:

"In our judgment an assessment of the value of the goods detained (and not subsequently returned) at the date of the accrual of the cause of action (i.e., of the refusal of the plaintiff's demand) must presuppose that on that date the plaintiff abandoned his property in the goods : and such a premise is inconsistent with the pursuit by the plaintiff of his action of detinue. The significance of the date of the refusal of the plaintiff's demand is that the defendant's failure to return the goods after that date becomes and continues to be, wrongful."

I pause at that point in the quotation, and relate those statements to the present case. Here the applicants have pursued their claim for detinue, that is for the return of their horses, after the respondent refused to deliver them in October 1985. Not only have the applicants pursued their claim but they obtained on 24 November 1989 the order for delivery up of the horses.

The applicants clearly did not abandon property in the horses in October 1985. Had they done so the proper measure of damages would lie in conversion. The damages would be the value of each of the horses at October 1985 plus interest between that date and the present time which I would have allowed at 15 per cent per annum.
However, the pursuit of the claim in detinue means that the applicants cannot now revert to a claim in conversion. Their damages must be assessed according to principles which apply to the measure of damages in detinue. One of those principles is that the damages for the non-delivery of the relevant chattels, in this case the horses, are assessed according to the value of the chattels at the date of judgment. Here lies a problem for the applicants as they do not know the present condition of the horses, and in any event the fact that Bold Storm is now five years older and has not been bred from in the meantime, and the fact that the colt has not been raced, mean that the horses would be worth much less now than in October 1985.
Mr Bell has produced a photocopy of an affidavit apparently sworn in this action by the respondent on 15 March 1990 in which the respondent says that at the auction on 5 November 1989 the horses were sold by the receiver for $250 and $200 respectively. It must be said that the respondent also acknowledged in the affidavit that each of the horses had been mis-described in the sales catalogue.
The photostat affidavit, I was informed at an interlocutory hearing in April 1990 by the solicitors then appearing for the parties, was to be filed in these proceedings within a few days of it being sworn and indeed on the strength of that information certain orders were made.
In fact the affidavit has never been filed. I received it from Mr Bell in the course of his address so as to understand his case, but it is not presented in a form which makes it admissible in evidence, and I merely note the matter. There is no strict proof that the horses were sold at so low a figure or that their value had really diminished so far between October 1985 and November 1989. But for reasons which follow I do not think it matters to the applicant's case that the true value of the horses at November 1989 has not been strictly proved, nor do I think any injustice will be visited on the respondent through the absence of proof of those facts.
I return to the statement of principle in Rosenthal v. Alderton and Sons Limited. The judgment of the Court of Appeal, after saying that the continued refusal of the demand of the plaintiffs meant that the failure to return the goods was thereafter wrongful, went on to say, at p 378:

"Moreover, the plaintiff may recover damages in respect of the wrongful 'detention' after that date, e.g., where the plaintiff has suffered loss from a fall in value of the goods between the date of the defendant's refusal and the date of actual return, (see William v. Archer (1847) 5 CB 318), and such damages must equally continue to run until the return of the goods or (in default of return) until payment of their value. There is (as appears from the forms of judgment already mentioned) a clear distinction between the value of the goods claimed in default of their return and damages for their detention, whether returned or not. The date of the refusal of the plaintiff's demand is the date from which the latter commence to run, but appears to be irrelevant to the former and cannot convert a claim for the return of the goods into a claim for payment of their value on that date."

In the present case if the value of the horses has fallen from October 1985 until now that fall in value, if it is a consequence of the respondent's failure to deliver up the horses on demand, must sound in damages. In addition, as the applicants have not at any time abandoned property in the horses, they are also entitled to damages for such loss of profits from the use of the horses in the meantime as has been proved by them.

However, on this approach, the award of damages for the loss of profitable use of the horses provides in substantial part compensation for the applicants being kept out of the enjoyment of the horses or their value, and they cannot obtain interest on the whole of the award from October 1985 as well.
To establish the value of the horses Mr Bell called Mr Hurcombe from Australian Breeders Co-operative Society Limited. I accept Mr Hurcombe as competent to give evidence of the value of horses, and I accept generally his evidence. In his opinion in October 1985 Bold Storm was worth about $5,000 and the colt, then aged about 13 months, was also worth about $5,000. Bold Storm was foaled on 27 October 1977. She had an indifferent racing career. She was first used as a brood mare in October 1981 but slipped her first foal. From her second joining she gave birth on 26 August 1983 to a filly named Romantic Storm, which proved to be a successful 2-year-old and won or was well placed in other races as a 3 and 4-year-old.
The colt foal, the subject of these proceedings, was the next and last foal produced by Bold Storm. By reason of Bold Storm being unlawfully detained she has not been bred from since. In Mr Hurcombe's opinion, at the present time, even assuming she had been well cared for, because she has not been bred from in the meantime, she would have little commercial value. However, had Bold Storm continued to foal each year, or at least had she been joined each year and breeding returns lodged with the appropriate registry, the horse, although now approaching the end of a useful breeding life, could possibly be worth very much more. Had she dropped other foals which had proved as successful as Romantic Storm, and were she now in foal to a good stallion, she could be worth up to $30,000.
The fact that she has not been bred from and the fact that she is not now in foal are matters which arise from the unlawful detention of the horse by the respondent, and they are matters for which damages should be allowed. The assessment of the damages in detinue means that the applicants must bear the loss in value due to the advancing age of the horse but not losses due to the other matters which I have just mentioned.
I assess the present value of Bold Storm together with the diminution in her value since October 1985 due to her not being joined, at $8,000.
The applicants are also entitled to damages for the lost profitable use of Bold Storm as a breeding mare. I accept Mr Hurcombe's evidence that foals, if dropped in 1986, 1987 and 1988, would, if sold as yearings in 1988, 1989, and 1990 respectively, have achieved gross sale prices of around $15,000, $15,000 and $10,000 respectively, those variations reflecting the state of the market as much as any other factor.
A foal dropped in 1989 would presently be on foot and would be available to go into a yearling sale in 1991. There would be potential profit from such an animal. Presumably it would be worth somewhat less at this time than the figures suggested by Mr Hurcombe as the likely sale price at a yearling sale. If Bold Storm had been successfully joined in 1989 that pregnancy would reflect in the present value of the horse but I have already made allowance for that in fixing the damages for the diminished value of the horse.
The likely gross receipts from the foals, however, is not the measure of the loss. Allowance must be made for the considerable expenses of service fees, agistment costs of the mare and her foals, veterinary fees, preparation fees, insurance, selling expenses and so on. Allowance must also be made for numerous adverse chances. For example the mare might not have fallen pregnant in one or more of the breeding seasons, as she apparently did not in 1984 although the reason for that is quite unclear. Or alternatively the horse may have slipped a foal, or the foal might have been stillborn or injured before it was sold. Sale prices and other outgoings may fluctuate, and could be unsatisfactory.
A broad estimate of the loss is the best that can be done, and I propose to allow $20,000 for the loss of breeding opportunity of Bold Storm. In total, therefore, I award by way of compensatory damages before interest in all the sum of $28,000 for the unlawful detention of Bold Storm and for her present value.
The assessment of the present value of the colt is difficult. It is now unraced and rising six years. In that state it would be worth only a small amount, probably an amount in the order of $200, the amount apparently received for it at the auction. Its racing potential as at October 1985, however, has been destroyed by its unlawful detention, and the applicants are entitled to damages for that loss. If the colt had been returned to the applicants, they could have raced it, perhaps thereby earning winnings and perhaps thereby increasing its value. Again, only a broad estimate can be made, as the potential of the horse is a question fraught with uncertainty. Allowance must be made in this exercise for the costs of keeping and training the horse that would have been incurred and for the risks of accident and failure. Alternatively, if the horse had been returned to the applicants when demanded in October 1985, they would have had the opportunity of selling the horse as a yearling at yearling sales in February 1986, and achieving for it a substantial figure.
I assess the damages for diminution in value of the colt due to its unlawful detention at $5,000, giving an overall compensatory award for the colt of $5,200 before interest.
On the above approach to damages I consider interest should be allowed on only those parts of the award which relate to the lost potential income from the use of the horses, and then only from the time the impact of particular losses would have been suffered by the applicants, for example, from the time of the potential sale of each of the foals in the case of Bold Storm.
I propose to allow pursuant to s.51A of the Federal Court of Australia Act 1976 a lump sum for interest in the amount of $4,750.
In total the damages and interest, therefore, amount to $37,950. Mr Bell has very properly conceded that the sum of $6,655 admittedly due to the respondent in October 1985 should be offset against his claim. I allow for that offset and propose to enter judgment for the sum of $31,295.
No evidence has been tendered in respect of the cross-claim, and the cross-claim must be dismissed. In any event it would follow from the reasons for judgment delivered on 24 November 1989 that the cross-claim for agistment and other expenses after October 1985 was bound to fail.
There will be judgment for the applicants in the sum of $31,295 together with their costs of the action to be taxed.

[1990] FCA 401

17 JULY 1990