Bennett v Goodwin

[2005] NSWSC 930

CITATION:	Bennett v Goodwin [2005] NSWSC 930
HEARING DATE(S):	8 September 2005
JUDGMENT DATE :	8 September 2005
JURISDICTION:	Equity
JUDGMENT OF:	Campbell J
DECISION:	Damages assessed as at date of conversion. No deduction allowed for commission or GST.

CATCHWORDS:	TORTS - conversion - measure of damages - when goods converted by sale, whether selling agent's commission to be deducted from selling price in assessing damages - whether GST payable on sale to be deducted in assessing damages - time as at which damages assessed - DAMAGES - measure and remoteness of damages in actions for tort - conversion - measure of damages - when goods converted by sale, whether selling agent's commission to be deducted from selling price in assessing damages - whether GST payable on sale to be deducted in assessing damages - time as at which damages assessed
CASES CITED:	Bennett v Goodwin [2005] NSWSC 513 Butler v Egg and Egg Pulp Marketing Board (1966) 114 CLR 185 Martin v London County Council [1947] KB 628 Solloway v McLaughlin [1938] AC 247; [1937] 4 All ER 328
PARTIES:	Gail Margaret Bennett - Plaintiff Clark Philip Ross Goodwin - Defendant
FILE NUMBER(S):	SC 5085/04
COUNSEL:	A Enright - Plaintiff Unrepresented - Defendant
SOLICITORS:	Kingston Swift - Plaintiff Defendant appeared in person

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EQUITY LIST

CAMPBELL J

THURSDAY 8 SEPTEMBER 2005

5085/04 GAIL MARGARET BENNETT v CLARK PHILIP ROSS GOODWIN

JUDGMENT – Ex Tempore

1 HIS HONOUR: This is the hearing of the remaining issues in the litigation in which I have earlier given judgment: Bennett v Goodwin [2005] NSWSC 513. It relates to the value of a tractor, accessories and spreader. Those accessories include an auger, but are not limited to the auger.

2 In circumstances outlined in my earlier judgment in the matter, the plaintiff and the defendant were in a relationship, which by early 2004 was in poor condition. In March 2004 the last straw came, when the plaintiff obtained an apprehended violence order against the defendant, which resulted in him never returning to her property.

3 At the time a tractor belonging to the defendant was on the plaintiff's property, together with a spreader and accessories.

4 The defendant owed money to the plaintiff at the time. On 19 March 2004 he authorised her to sell various items, including the spreader, on the basis that they would be sold after consultation with himself approving their sale. She obtained his authority to sell the spreader for $12,000. However, the sale was not ultimately effected at $12,000. Rather, she sold it for $10,000, and without obtaining his approval to that price. Of that amount, she received $9,091, after payment of GST.

5 The defendant never authorised the plaintiff to sell the tractor or augers. The tractor was removed from her property in June 2004, by a Mr Ross Jansen, a friend of the plaintiff. He kept it in his shed for some months thereafter. He made some attempt to sell it by private advertisement in the Land Newspaper, but this did not produce any satisfactory response. One response was that the defendant contacted him saying that it was his tractor and that Mr Jansen was not to sell it. The only other response was from a person who telephoned and, when told that the price was $54,000, proceeded no further.

6 After the attempt at private sale proved unsuccessful, Mr Jansen arranged for the tractor and accessories other than the auger to be submitted for sale by auction on 16 August 2004. At the auction, the tractor and accessories realised a price of $46,200. Of that amount, $2,000.00 was retained by the selling agent as commission.

7 The plaintiff did not sell the augers, and has not returned them to the defendant when asked.

8 It is common ground that the plaintiff has converted all the items to which this judgment relates. The sole issue concerns the measure of damages.

Tractor and Accessories Value – Deduction of Commission?

9 There is some discrepancy in the evidence about the condition of the tractor at the time of its sale. It is common ground that there were a lot of scratches over the paintwork, and the guard from the power take off was missing, not only at the time of sale but also at the time of its removal from the plaintiff's property. One of the cabin doors was missing, the battery box lid was missing, and the battery box was bent slightly backwards the last time the defendant saw the tractor. There is a discrepancy, which the evidence does not allow me to resolve, about whether the temperature gauge was not working, and whether some of the lights on the dashboard did not work. I find it more probable than not that as well one of the headlights was missing.

10 After obtaining possession of the tractor Mr Jansen replaced the door, at a cost of $1,350 and fitted a headlight at the cost of $230. He also replaced mirrors on the tractor, which had been missing. He carried out various other repairs, including replacing the battery cable and the battery.

11 There is evidence from Mr McMahon, a valuer who specialises in valuations of this type, that, in the condition as it was described to him - that is, with the various defects which were common ground, but also with the temperature gauge not working and some of the lights on the dashboard not working - the tractor, when sold by private sale, would realise somewhere in the range of $40,000 to $45,000. He regards an auction sale as not as advantageous a way of selling a tractor, usually, as a private sale. However, in his opinion, the price which was actually obtained at the auction was an excellent price.

12 There is no admissible evidence of the value of the tractor, apart from that which results from the fact of its sale on the open market, and Mr McMahon's valuation. I recognise that the ultimate sale price is the one which might possibly have been increased to some extent by the value of the repairs and replacements which Mr Jansen carried out. However, in my view any increase in value of the tractor deriving from that work is adequately outweighed by the fact that the tractor was converted some time between March and June 2004 but not sold until 16 August 2004, and there is some evidence that the mere passage of time diminishes the value of such an item to some extent. The time as at which an item is valued for the purposes of assessing damages for conversion of an item whose value declines with time, is the date of the conversion: Solloway v McLaughlin [1938] AC 247; [1937] 4 All ER 328.

13 Even though commission was paid from the net sale proceeds, the function of damages for conversion is to compensate the person whose property has been converted for the value of the property which has been converted: Butler v Egg and Egg Pulp Marketing Board (1966) 114 CLR 185. That value is usually taken as the market value of the goods in question, for goods of a kind which can readily be bought in a market, as the goods in question in this case are, plus any special damages which might be proved. The market value which is looked at in this way is the price which would need to be paid in the market for the goods in question. That is because the damages achieve compensation by giving the owner of the goods enough money to go into the market and buy a replacement for the converted goods. Thus, in assessing the market value for the purpose of assessing damages, it is not appropriate to deduct the amount of commission which was payable upon their sale.

14 In my view, the evidence leads to the conclusion that the value of the tractor and accessories as converted, apart from the auger, was $46,200.

15 The augers have been valued by Mr McMahon at $2,000.00. There is no evidence which enables any different conclusion to be arrived at. I accept his evidence concerning it.

Spreader Value – Deduction of GST?

16 The spreader was sold by the plaintiff for $10,000.00. There is no evidence of its value other than the price actually achieved. The sale appears to have been an arms length one, in circumstances where the plaintiff had reason to achieve as high a price as she could, so I accept it as evidence of market value.

17 From that amount, she received only $9,091, because it was necessary for GST to be paid on the sale. Again, however, because the function of damages for conversion is compensatory, it is the price to a purchaser of the goods which is the appropriate measure of damages. Thus, it is the market price, inclusive of GST, which is the measure of damages. This is consistent with the view which has been arrived at in England that purchase tax payable in connection with the sale of an item ought properly be included in the market value of an item when assessing damages for the conversion of that item: Martin v London County Council [1947] KB 628.

Special Damages?

18 The goods in question were ones which were used by Mr Goodwin in connection with some rural operations which he carried on. He tells me from the Bar table that the value to him of the goods was more than the market value. However, when there is no evidence which identifies his special use of the items, or by reference to which an amount of special damages could be arrived at, that is not something which can be taken into account in assessing damages for conversion.

19 Thus, the appropriate amount to allow as damages for the conversion is $58,200.

**********